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 MARALEX RESOURCES, INC, GARFIELD & LA PLATA COUNTIES, COLORADO

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CAUSE NO. 1V DOCKET NO. 150500158 TYPE: ENFORCEMENT ORDER NO. 1V-578

ORDER AMENDING ORDER FINDING VIOLATION NO. 1V-524

The Colorado Oil and Gas Conservation Commission (“Commission”), having reviewed the administrative record and being fully advised on the premises, enters this Order Amending Order Finding Violation No. 1V-524 (“Order No. 1V-524”) 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:

I. Procedural History

Maralex Resources, Inc. (“Maralex”) (Operator No. 53255) is the operator of the Rifle Walton 25-2 well (API No. 05-045-06290) in Garfield County (“Well”).

On July 20, 2015, the Commission issued Order No. 1V-524 which required Maralex to: a) pay a penalty of $47,600; and b) either remediate or plug and abandon the Well.

Maralex appealed Order No. 1V-524 in District Court for the City and County of Denver in Case No. 2015CV33333 (“Appeal”).

Maralex and the Director agreed to resolve the Appeal through a settlement agreement (“Settlement Agreement”).

Under the Settlement Agreement, Maralex agreed to pay a penalty of $15,000 by June 1, 2016 and agreed to plug and abandon the Well pursuant to the procedure laid out in Order 1V-524 by September 1, 2016. The $15,000 to be paid by Maralex is a reduction of the original $47,600 penalty assessed by Order No. 1V-524. Upon completion of these two conditions, the Appeal will be dismissed with prejudice.

II. The Commission’s Findings

The Commission reviewed Order No. 1V-524 and the Settlement Agreement and finds that this Settlement Agreement is a reasonable resolution of the Appeal.

As the Settlement Agreement modifies the penalty to be paid by Maralex as well as the deadline for Maralex to plug and abandon the Well, Order No. 1V-524 must be modified to be consistent with the Settlement Agreement.

Paragraph 6 of Order 1V-524 reserved the Commission’s right to amend the Order after notice and hearing. This matter was properly noticed for hearing on March 24, 2016.

ORDER

NOW, THEREFORE, the COMMISSION ORDERS:

1. Paragraph 2 of the Order section of Order No. 1V-524 is hereby removed from the Order and replaced with the following:

Maralex is assessed a penalty of $15,000 for this violation. Maralex will pay this penalty on or before June 1, 2016.

2. Paragraph 3 of the Order section of Order No. 1V-524 is hereby removed from the Order.

3. Paragraph 4 of the Order section of Order No. 1V-524 is hereby removed from the Order and replaced with the following:

On or before September 1, 2016, Maralex will plug and abandon the Rifle Walton 25-2 Well with the following plugging procedure:

a. Placing CIBP or squeeze cement below a CICR at about 7700 feet. 300 feet of cement on top required to cover squeezed (abandoned) perforations.

b. Placing casing stabilization plug across squeezed HIC’s from 5700 to 5500 feet.

c. Placing a minimum 100 feet of cement in the annulus from about 2650 to 2550 feet;

d. Placing a minimum 100 feet of cement in the annulus from about 910 to 810 feet; and

e. Placing cement in the annulus from 400 feet or deeper to surface. Placing a minimum of 100 feet of cement in casing from 50 feet below surface casing shoe to 50 feet above. Placing cement in casing from a minimum of 50 feet to surface.

4. No other alterations or amendments are made to Order No. 1V-524.

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. For all other purposes, this Order is effective as of the date of the Commission’s 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 April, 2016 as of the 18th day of April, 2016.

                                                            OIL AND GAS CONSERVATION COMMISSION

            OF THE STATE OF COLORADO

            By 

                                                                                    Julie Murphy, Secretary