BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES AND REGULATIONS OF THE COLORADO OIL AND GAS CONSERVATION COMMISSION BY TOP OPERATING COMPANY,  WELD COUNTY, COLORADO

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CAUSE NO. 1V

 

DOCKET NO. 151000474

 

TYPE:  ENFORCEMENT

 

ORDER NO. 1V-535

 

ADMINISTRATIVE ORDER BY CONSENT

(Pursuant to Rule 522.e.(1) of the Rules and Regulations of the

Colorado Oil and Gas Conservation Commission, 2 CCR 404-1)

               

FINDINGS

 

            1.         TOP Operating Company (“TOP”) (Operator No. 39560) is the operator of the Ewing 1 Well (API No. 05-123-09228) (“Well”) in Weld County, Colorado.

 

2.         On April 21, 2014, Commission conducted a field inspection of the Well (Doc. No. 673800779). The inspection noted that the well was temporarily abandoned and required TOP to contact engineering staff to schedule either a Mechanical Integrity Test (“MIT”) or Plugging and Abandonment by May 1, 2014. TOP failed to comply with the field inspection.

 

3.         On September 22, 2014 Engineering Staff issued TOP a warning letter (Doc No. 2477217) instructing TOP to perform a successful MIT or plug and abandon the Well and to submit the requisite forms by December 22, 2014. TOP failed to comply with the warning letter.

 

4.         On May 22, 2015, Commission Staff issued a Notice of Alleged Violation (“NOAV”) (No. 200432815) to TOP citing violations of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”):

 

a.    Rule 319.b. (Temporary Abandonment)

b.    Rule 326.c. (Mechanical Integrity Testing - Temporarily Abandoned Wells)

 

5.         On July 14, 2015, Staff approved TOP’s most recently submitted Form 6 (Doc. No. 400847190) (“Form 6”) declaring its intent to plug and abandon the Well.

 

            6.         On August 18, 2015, TOP submitted a Form 42, Field Operations Notice to notify Commission Staff that it intended to undertake plugging operations on August 20, 2015. TOP began work to plug and abandon the Well on August 20, 2015 and completed its plugging operations on August 24, 2015. Commission Staff witnessed these operations.

 

7.         Following factual investigation and legal review of the violations alleged in the NOAV, Hearing Staff now asserts TOP has committed the following violations of the Rules:

 

a.    One, ten-day violation of Rule 319.b. (as effective on April 21, 2014, when the Well was inspected) for temporarily abandoning the Well without director approval; and

 

b.    One, ten-day violation of Rule 326.b.[1] (as effective on April 21, 2014, when the Well was inspected) for failing to complete an MIT on this temporarily abandoned Well.

 

8.         Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $15,000 for this violation. The penalty calculation is based on the following:

 

Rule No.

Days of Violation

Start Date

Daily Base Penalty

Total Penalty

319.b.

10

4/21/2014

$1,000

$10,000

326.b.

10

4/21/2014

$1,000

$10,000

 

RAW TOTAL

$20,000

SETTLEMENT INDUCEMENT

-$5,000

SETTLEMENT OFFER

$15,000

 

a.            The violation started prior to the June 6, 2014 effective date of HB 14-1356;

b.            Daily starting base penalty of $1,000 per day per violation;

c.            Statutory limit of not more than 10 days of violation because there was no significant waste of oil and gas resources, damage to correlative rights, or significant adverse impact on public health, safety, or welfare, including the environment or wildlife resources;

d.            Settlement inducement of 25%;

e.            No aggravating factors;

f.             No mitigating factors;

g.            No pattern of violation.

h.            No gross negligence or knowing and willful misconduct.

 

 

AGREEMENT

 

NOW, THEREFORE, based on the Findings and pursuant to Rule 522.b.(3) and the Commission’s Enforcement and Penalty Policy, the Director proposes and TOP Operating Company agrees to settle the NOAV on the following terms and conditions:

 

      I.        TOP is found in violation of Rules 319.b. and 326.b.

 

    II.        TOP will be assessed a penalty of $15,000.

 

   III.        TOP will pay $15,000 within 30 days after this AOC is mailed by the Commission.

 

RECOMMENDED this         day of September, 2015.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By                                                                              

     David A. Beckstrom, Enforcement Officer

 

 

AGREED TO AND ACCEPTED this         day of September, 2015.

 

                                                TOP OPERATING COMPANY

 

 

By                                                                                          

Signature of Authorized Company Representative

                       

                                                                                         

Print Signatory Name

 

                                                                                         

Title

 

ORDER

HAVING CONSIDERED the Agreement between the Director and TOP Operating Company to resolve the NOAV, the COMMISSION ORDERS:

 

            1.         TOP is found in violation of Rules 319.b. and 326.b. as described above.

 

            2.         TOP is assessed a total penalty of $15,000 for violations of the Rules as described above.

 

3.         TOP will pay $15,000 within 30 days after this AOC is mailed by the Commission.

 

4.         This AOC does not relieve TOP from undertaking and completing abatement or corrective actions that may be required by the Notice of Alleged Violation described in Finding No. 200432815, above, or any amendments or modifications thereto specified by the COGCC Staff.

 

5.         Compliance dates specified in this Order may be extended only for good cause, as determined at the Director’s sole discretion. A request for extension must be made, in writing, at least 35 days prior to the pertinent compliance deadline or as soon as possible if 35 days prior notice is not feasible. Failure to receive an extension prior to the compliance deadline or the failure to meet a compliance deadline may constitute a new violation subject to additional penalties.

 

6.         Entry of this Order constitutes final agency action for purposes of judicial review as of the date this order is mailed by the Commission. For all other purposes, this Order is effective as of the date of approval by the Commission.

 

7.         The Commission expressly reserves its right after notice and hearing, to alter, amend, or repeal any and/or all of the above orders. 

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ENTERED this           day of                      , 2015 as of the 26th day of October, 2015.

                                                                                                                                                           

                                                            OIL AND GAS CONSERVATION COMMISSION

                                                            OF THE STATE OF COLORADO

 

 

By                                                                                          

Julie Murphy, Secretary


[1] While the NOAV references Rule 326.c, TOP agrees that a violation of 326.b occurred given the dates involved.  TOP agrees to this AOC without the need to amend the NOAV to reflect the correct Rule citation.