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 PICEANCE ENERGY, LLC, MESA COUNTY, COLORADO

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CAUSE NO. 1V ORDER NO. 1V-538 DOCKET NO. 151000558 TYPE:  ENFORCEMENT

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. Piceance Energy, LLC (“Piceance”) (Operator No. 10433) is the operator of record of the Gunderson #29-11E well (API No. 05-077-09768) (“Well”) in Mesa County.

2. On March 31, 2105, the Well was spud.

3. Under Colorado Oil and Gas Conservation Commission, 2 CCR 404-1 (“Rule” or “Rules”) Rule 609.f., Piceance was required to submit final laboratory analytical results of initial baseline groundwater sampling within 3 months of collecting the samples.  

4. On September 17, 2014, Piceance took initial baseline groundwater samples.

5. On July 15, 2015, Colorado Oil and Gas Conservation Commission (“COGCC” or “Commission”) Staff issued Notice of Alleged Violation (“NOAV”) No. 200435658 to Piceance for a violation of Rule 609 for failing to submit final laboratory analytical results of initial baseline groundwater sampling within 3 months of collecting the samples.

6. On September 15, 2015, Piceance submitted the final laboratory analytical results of initial baseline groundwater sampling to the COGCC. The submission was 272 days overdue.

7. Following a factual investigation and legal review of the violations alleged in the NOAVs referenced above, COGCC Staff now asserts Piceance committed the following violations:

NOAV	Well	Rule	Act	Base Penalty	Start Date	End Date	Days of Violation	Total Penalty
200435658	Gunderson #29-11E	609.f.	New	$200	12/17/2014	9/15/2015	272	$3,866
TOTAL PENALTY								$3,866

8. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $3,866 for these violations.  The penalty calculation is based on the following:

a. Violations occurred after the June 6, 2014 effective date of HB 14-1356;

b. Pursuant to his authority to reclassify discrete sub-parts of a Rule and modify daily penalty amounts, as stated in Rule 523 and the COGCC Enforcement Guidance and Penalty Policy – January 2015, the Director of the COGCC reclassified the violation of Rule 609.f. from a Class 2 to a Class 1 violation;

c. The violation for Rule 609.f. is calculated from the date the laboratory analytical results were due to the COGCC to the date they were submitted;

d. Duration matrix applied from January 2015 COGCC Enforcement Guidance and Penalty Policy;

e. No aggravating or mitigating factors; and

f. No pattern of violations or gross negligence/knowing willful misconduct.

AGREEMENT

      NOW, THEREFORE, based on the Findings and pursuant to Rule 522.e.(1) and the Commission’s Enforcement and Penalty Policy, the Director proposes and Piceance Energy, LLC agrees to settle the NOAVs on the following terms and conditions:

1. Piceance is found in violation of Rule 609.f. at the Gunderson #29-11E well, as described above.

2. Piceance will be assessed a penalty of $3,866.

III. Piceance will pay the $3,866 penalty within 30 days after the approved AOC is mailed by the Commission. 

RECOMMENDED this ____ day of September, 2015.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By

                                                             Kyle W. Davenport, Assistant Attorney General

AGREED TO AND ACCEPTED this ______day of September, 2015.

                                                                                                                                                                                                PICEANCE ENERGY, LLC

                        By

                        Signature of Authorized Company Representative

Print Signatory Name

Title              

ORDER

HAVING CONSIDERED the Agreement between the Director and Piceance Energy, LLC to resolve the NOAV, the COMMISSION ORDERS:

1. Piceance is found in violation of Rule 609.f. at the Gunderson #29-11E well, as described above.

2. Piceance is assessed a penalty of $3,866.

3. Piceance will pay the $3,866 penalty within 30 days after the approved Order is mailed by the Commission. 

4. Entry of this Order constitutes final agency action for purposes of judicial review 30 days after the date this order is mailed by the Commission.  For all other purposes, this Order is effective as of the date it is approved by the Commission.

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

===================================================================ENTERED this _____ day of October, 2015 as of the 26 day of October, 2015.

                                                            OIL AND GAS CONSERVATION COMMISSION

            OF THE STATE OF COLORADO

            By 

                                                                                     Julie Murphy, Secretary