BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES AND REGULATIONS OF THE COLORADO OIL AND GAS CONSERVATION COMMISSION BY RANCHO TRES, GARFIELD COUNTY, COLORADO |
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CAUSE NO. 1V
DOCKET NO. 160300095
TYPE: ENFORCEMENT
ORDER No. 1V-570 |
ORDER
The Colorado Oil and Gas Conservation Commission (“Commission”), having reviewed the administrative record and being fully advised on the premises, enters this Order pursuant to the Rules and Regulations of the Colorado Oil and Gas Conservation Commission, 2 CCR 404-1(“Rule” or “Rules”), and states as follows:
1. Rancho Tres is the operator of the Bert Eaton #1 well (API No. 05-045-05083) (the “Well”) in Garfield County. (Exhibit 3).
2. The Bert Eaton #1 is the only well Rancho Tres operates in Colorado. (Exhibit 4).
3. The Well is a domestic well that has never had any production reported. (Exhibits 3, 5 and 6). A mechanical integrity test (“MIT”) has never been performed on the Well. (Exhibit 7).
4. Rancho Tres posted $5,000 in financial assurance with the Commission. The bond is insured by The Hartford Accident and Indemnity Company. (Exhibit 8).
5. The only individual associated with Rancho Tres in the COGCC’s records is Dr. William Haynes. (Exhibit 9).
6. The Savage family is the owner of the surface where the well is located. They have not claimed any ownership interest in the Well and have no interest in becoming the owner or operator of the Well. (Exhibit 10).
7. Staff is not in possession of current contact information for Rancho Tres. Staff does not have a working telephone number or email address for Rancho Tres.
8. Staff is not in possession of current contact information for Dr. Haynes. Staff does not have a working telephone number or email address for Dr. Haynes.
9. Staff has repeatedly attempted to contact Dr. Haynes and Rancho Tres without success. (Exhibit 11).
10. On November 28, 2014, Staff conducted an inspection of the Well. The inspection found that the Well was a domestic well with no associated facilities. The inspection also found that all valves were in a shut position at the time of the inspection. (Exhibit 12).
11. On September 11, 2015, Staff conducted an inspection of the Well. The inspection found that there was no apparent pipeline or electric line to the Well. (Exhibit 13).
12. On February 21, 2016, Jennifer Bock, Hearing Officer in this matter, issued a prehearing order setting February 24, 2016 as the deadline for objections to the relief requested by COGCC Staff.
13. Mr. Savage and The Hartford Accident and Indemnity Company were served with the February 21, 2016 prehearing order by electronic mail. (Exhibit 14).
14. No objections to the relief requested by COGCC Staff were filed.
15. On February 26, 2016, Staff submitted a prehearing statement, exhibits and a proposed order. Staff’s prehearing statement, exhibits and proposed order were provided to Rancho Tres, Mr. Savage, and The Hartford Accident and Indemnity Company.
16. No party other than Staff submitted a proposed order, exhibits, witness lists or a prehearing statement.
17. No party objected or otherwise communicated with the Hearing Officer or Staff regarding the exhibits submitted by Staff.
18. No representative of Rancho Tres has entered an appearance in this matter or otherwise communicated with the Hearing Officer.
19. No representative of Rancho Tres appeared at the March 7-8, 2016 Commission meeting.
II. Findings
Jurisdictional Findings
1. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.
2. The Commission has jurisdiction over the subject matter embraced in this Application, and of the interested parties, and jurisdiction to promulgate the following order pursuant to the Oil and Gas Conservation Act.
Commission Authorization
3. Rule 302 requires all operators to file a Form 1, Registration for Oil and Gas Operations, prior to conducting operations in Colorado. An operator number is assigned to each operator following the submission of a Form 1. Implicit in the COGCC’s acceptance of Form 1s and assignment of operator numbers is the authority to rescind a Form 1, along with the right to conduct operations in Colorado, and revoke an operator number.
4. Rule 326.b. requires a MIT on all wells that have been shut-in for longer than two years.
5. Rule 521 provides that a Notice of Hearing must be served to the address the operator has on file with the Commission pursuant to Rule 302.
6. Rule 709 provides “Whenever an operator fails to fulfill any statutory obligation described herein, and the Commission undertakes to expend funds to remedy the situation, the Director shall make an application to the Commission for an order calling or foreclosing the operator’s financial assurance.”
7. Pursuant to Rule 519.a., the Colorado Rules of Civil Procedure apply to Commission proceedings unless they are inconsistent with Commission Rules or the Colorado Oil and Gas Conservation Act. C.R.C.P. 55 provides that “for the proper course of action in the event a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend: his default shall be entered, followed by in certain instances a hearing, and, if proper, an entry of judgment by default.” Homsher v. District Court, 602 P.2d 5 (1979). If the court has all the necessary information before it in the form of pleadings, affidavits, and other materials as required by these combined rules of procedure, and is satisfied as to the sufficiency of service and that defendant was in default, a hearing should not be necessary. Crow-Watson #8 v. Miranda, 736 P.2d 1260, 1261 (Colo. Ct. App. 1986).
8. As Rancho Tres has been properly served with notice of hearing, as no party has objected to the relief requested by Staff and no representative of Rancho Tres appeared at the hearing, as Rancho Tres has not fulfilled its statutory obligations regarding the Well, and as the Commission must expend funds to put the Well in stable condition so that it does not pose a threat to the public health, safety and welfare, or the environment, Staff is authorized to:
a. Foreclose Rancho Tres’ existing financial assurance and claim both the principal and any accrued, but undisbursed, interest that may exist;
b. Remediate conditions that threaten to cause, or that actually cause, significant environmental impacts at oil and gas locations operated by Rancho Tres;
c. Plug and abandon any wells operated by Rancho Tres;
d. Reclaim all well sites and associated facilities operated by Rancho Tres;
e. Take ownership and control of any equipment, saleable product, and appurtenances related to Rancho Tres’ operations, if any, but only as to property where ownership will facilitate COGCC Staff’s activities;
f. Dispose of any equipment, saleable product, and appurtenances related to Rancho Tres’ operations as COGCC Staff sees fit, provided that any proceeds from the disposition of the assets will be applied to any work undertaken by COGCC Staff;
g. Require Rancho Tres to repay any funds expended by the COGCC for any work undertaken by COGCC Staff. Funds resulting from the foreclosure of Rancho Tres’ existing financial assurance may be used to repay funds expended by the COGCC;
h. Revoke Rancho Tres’ Operator Number (No. 73372); and
i. Rescind Rancho Tres’ Form 1 and revoke Rancho Tres’ right to conduct oil and gas operations in the state of Colorado.
ORDER
NOW, THEREFORE, the COMMISSION ORDERS:
1. The Commission approves all Hearing Officer Orders entered in this matter.
2. Staff exhibits 1 through 14 are deemed authentic and admitted before the Commission.
3. Rancho Tres was properly served with notice of this hearing and is in default for its failure to appear or otherwise defend.
4. COGCC Staff is authorized to:
a. Foreclose Rancho Tres’ existing financial assurance and claim both the principal and any accrued, but undisbursed, interest that may exist;
b. Remediate conditions that threaten to cause, or that actually cause, significant environmental impacts at oil and gas locations operated by Rancho Tres;
c. Plug and abandon any wells operated by Rancho Tres;
d. Reclaim all well sites and associated facilities operated by Rancho Tres;
e. Take ownership and control of any equipment, saleable product, and appurtenances related to Rancho Tres’ operations, if any, but only as to property where ownership will facilitate COGCC Staff’s activities;
f. Dispose of any equipment, saleable product, and appurtenances related to Rancho Tres’ operations as COGCC Staff sees fit, provided that any proceeds from the disposition of the assets will be applied to any work undertaken by COGCC Staff;
g. Require Rancho Tres to repay any funds expended by the COGCC for any work undertaken by COGCC Staff. Funds resulting from the foreclosure of Rancho Tres’ existing financial assurance may be used to repay funds expended by the COGCC;
h. Revoke Rancho Tres’ Operator Number (No. 73372); and
i. Rescind Rancho Tres’ Form 1 and revoke Rancho Tres’ right to conduct oil and gas operations in the state of Colorado.
5. Entry of this Order constitutes final agency action for purposes of judicial review as of the date this Order is mailed by the Commission. Otherwise, it is effective upon approval.
6. 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 March, 2016 as of the 7th day of March, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary