BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROPOSED FORECLOSURE OF THE FINANCIAL ASSURANCE POSTED BY PINE RIDGE OIL & GAS LLC,  FREMONT, LINCOLN AND ROUTT COUNTIES, COLORADO

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CAUSE NO. 1V

DOCKET NO. 170100014

TYPE:  ENFORCEMENT

ORDER NO. 1V-622

 

ORDER FORECLOSING FINANCIAL ASSURANCE

 

FINDINGS

 

1.         Pine Ridge Oil & Gas LLC (“Pine Ridge”) (Operator No. 10276) is the operator of record for the following Locations (“Subject Locations”);

 

Location Name

ID No.

County

Hully Gully 13-54-1-13

433053

Lincoln

Frog Pond 13-54-12-1

430683

Lincoln

Busygully 13-54-12-3

430828

Lincoln

Redband-619S69W 28NENE

382573

Fremont

Croaker 11-10

419495

Fremont

Coal View Unit-66N86W 18SWSE

316792

Routt

 

            2.         The Subject Locations are the only Locations operated by Pine Ridge in Colorado. They have not passed final reclamation.

 

            3.         Pine Ridge has the following financial assurance posted with the Commission (collectively, “Pine Ridge Financial Assurance”):

 

Surety ID

Bond Type

Amount

Coverage

Instrument

Inst.#

2008-0134 

PLUGGING  

$60,000.00 

BLANKET  

INSURANCE  

RLB0012181  

2008-0135 

SURFACE  

$25,000.00 

BLANKET  

INSURANCE  

RLB0012182  

 

The financial assurance is underwritten by RLI Insurance Company (Financial Assurance Provider Number: 70613).

   

4.         Pine Ridge has conducted final reclamation of the Subject Locations over the past four years. It has removed all equipment and debris, backfilled the pits, contoured the land, returned the top soil, and reseeded and fertilized the areas multiple times. Nevertheless, the Subject Locations do not yet satisfy the 80% revegetation standard that is required to pass final reclamation.

 

5.         Pine Ridge has now ceased operating in Colorado, except for achieving final reclamation of the Subject Locations and arranging for the release or other disposition of the Pine Ridge Financial Assurance. Pine Ridge seeks to resolve these remaining matters promptly and consensually so that it can exit the state. For this purpose, Pine Ridge has requested that the Commission foreclose the Pine Ridge Financial Assurance and utilize the proceeds to complete the final reclamation of the Subject Locations.

 

AGREEMENT

 

  1. Pine Ridge agrees Rule 709 requirements for foreclosing the Pine Ridge Financial Assurance are satisfied in this case.

 

  1. Pine Ridge agrees to the foreclosure of the Pine Ridge Financial Assurance and for Staff to utilize the proceeds to complete final reclamation at the Subject Locations.

     

  1. COGCC Staff agrees to foreclose the Pine Ridge Financial Assurance and to utilize the proceeds to complete final reclamation at the Subject Locations.

 

  1. Both Pine Ridge and the Staff agree that foreclosure of the Pine Ridge Financial Assurance will fulfill the remaining obligations of Pine Ridge, including its owners, officers, and persons authorized to act on its behalf, regarding final reclamation of the Subject Locations. However, this release will only be effective if the full $85,000 is received by the Commission.

 

  1. Both Pine Ridge and the COGCC Staff agree to the terms of this Order.

 

  1. Pine Ridge agrees to the findings of this Order only for the purpose of expeditiously resolving this matter without a contested hearing. Pine Ridge reserves the right to contest these findings in any proceeding before any agency, court, or other tribunal, except for a proceeding to enforce the terms of this Order. The findings and any action undertaken by Pine Ridge pursuant to this Order shall not constitute evidence of fault or liability by Pine Ridge with respect to any third-party claim against Pine Ridge. This Order does not constitute an admission by Pine Ridge of any alleged violation, factual allegation, or penalty determination or component. 

 

RECOMMENDED this 17th   day of January, 2017.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By                                                                       

Peter J. Gowen, Enforcement Supervisor

AGREED TO AND ACCEPTED this 17th   day of January, 2017.                                                                                                                                          

PINE RIDGE OIL & GAS LLC

                          

                        By                                                                                          

                             Signature of Authorized Company Representative

 

                                                                                                                       

                            Print Signatory Name and Title

                      

                                  ORDER

 

HAVING CONSIDERED the Agreement between the Director and Pine Ridge, the COMMISSION ORDERS:

 

            1.         Staff is authorized to foreclose the Pine Ridge Financial Assurance.

 

2.         The proceeds from the Pine Ridge Financial Assurance are to be utilized to complete final reclamation at the Subject Locations.

 

3.         Pine Ridge’s Registration for Oil and Gas Operations – Form 1 and Certificate of Clearance – Form 10 will be suspended upon foreclosure of the Pine Ridge Financial Assurance pursuant to Rule 709. They may not be reinstated until Pine Ridge has filed satisfactory financial assurance under the 700 Series Rules.

 

4.         Foreclosure of the Pine Ridge Financial Assurance will fulfill the remaining obligations of Pine Ridge, including its owners, officers, and persons authorized to act on its behalf, regarding final reclamation of the Subject Locations, conditioned on Commission receipt of the full $85,000 of the Pine Ridge Financial Assurance.

 

5.         This Order is effective as of the date it is mailed by the Commission.  It constitutes final agency action for purposes of judicial review.

 

6.         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 1st  day of February, 2017 as the 30th day of January, 2017.

                                                           

OIL AND GAS CONSERVATION COMMISSION

            OF THE STATE OF COLORADO

 

 

            By                                                                                          

                                                                        Julie Murphy, Secretary

 

 

CERTIFICATE OF MAILING

 

On February 2, 2017, a true and accurate copy of Commission Order 1V-622 was mailed by first-class mail return receipt requested to the following:

 

 

Pine Ridge Oil & Gas LLC  

Attn: Andy Lydyard
1153 Bergen Parkway Suite I-185
Evergreen, CO  80439

 

 

RLI Insurance Company

Jason T. Kilpatrick

2925 Richmond Avenue, Suite 1600

Houston, Texas 77098

 

 

 

 

                                                                                                                                   

                                                                                    Margaret Humecki