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 D.J. SIMMONS, INC., DOLORES COUNTY, COLORADO

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CAUSE NO. 1V

DOCKET NO. 151000347

TYPE:  ENFORCEMENT

ORDER NO. 1V-554

 

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.         D.J. Simmons, Inc. (“Simmons”) (Operator No. 100178) is the operator of the Federal 33-8 Well (API No. 05-033-06066) (“Well”) in Dolores County.

 

            2.         On August 22, 2013, Commission Staff observed that the Federal 33-8 Well would not blow down, indicating a tubing leak and loss of mechanical integrity (Doc. No. 663401123).  The Report required Simmons to perform a successful mechanical integrity test (“MIT”) within six months (by February 22, 2014) or to plug and abandon the Well.

 

            3.         On October 22, 2013, Simmons submitted a Form 4 Sundry Notice of its intent to revert the Well from an injection well to a producing well and to properly plug and abandon the Well shortly thereafter (Doc. No. 400499879).  

 

4.         On February 12, 2015, Staff conducted a follow-up Field Inspection Report that determined that Simmons did not perform a successful MIT or plug and abandon the Well (Doc. No. 667700556).  

 

5.         On March 30, 2015, Commission Staff issued a Notice of Alleged Violation (“NOAV”) (No. 200427951) to Simmons citing a violation of Rule 326 (Mechanical Integrity Testing) of the COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”) for the failure to perform a successful MIT or plug and abandon the Federal 33-8 Well.

 

6.         On April 28, 2015, Simmons filed a Form 6 Notice of Intent to Abandon with the Commission (Doc. No. 400828616).  On May 5, 2015, Simmons plugged the Well and submitted a Form 6 Subsequent Report of Abandonment on May 13, 2015 (Doc. No. 400838223).

 

             

                       

7.         Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, the Director calculated a penalty of $6,000 for this violation. The penalty calculation is based on the following:

 

a.    Violation occurring prior to the effective date of HB 14-1356;

b.    Daily starting base penalty of $1,000 per day of 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.    No aggravating factors;

Mitigating factor Rule 523.c.(3)B(6);

e.    No pattern of violation or gross negligence/knowing and willful misconduct; and

f.     Settlement inducement.

 

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 D.J. Simmons, Inc. agrees to settle the NOAV on the following terms and conditions:

 

      I.        Simmons is found in violation of Rule 326.

 

    II.        Simmons will be assessed a penalty of $6,000.

 

   III.        Simmons will pay $6,000 within 30 days after this AOC is mailed by the Commission.

 

RECOMMENDED this ___ day of November, 2015.

 

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By                                                                       

Scott Schultz, Assistant Attorney General

 

 

AGREED TO AND ACCEPTED this          day of November, 2015.

                                                                                                                            

 

D.J. SIMMONS, INC.

                             

 

                        By                                                                                          

                             Signature of Authorized Company Representative

                       

                                                                                               

                       Print Signatory Name

                      

                                                                                                                                                            Title

 

ORDER

 

HAVING CONSIDERED the Agreement between the Director and D.J. Simmons, Inc. to resolve the NOAV, the COMMISSION ORDERS:

 

            1.         Simmons is found in violation of Rule 326 as described above.

 

            2.         Simmons is assessed a total penalty of $6,000 for the rule violation described above.

 

3.         Simmons will pay $6,000 within 30 days after the Commission approves this Order. Failure to pay the penalty by the deadline is an independent violation that may be subject to additional penalties.

 

4.         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.

 

5.         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             December, 2015 as of the___ day of December, 2015.

           

                                                            OIL AND GAS CONSERVATION COMMISSION

                                                            OF THE STATE OF COLORADO

 

 

                                                            By                                                                                          

                                                                        Julie Murphy, Secretary