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 LONGS PEAK RESOURCES, LLC, WELD COUNTY, COLORADO |
) ) ) ) ) |
CAUSE NO. 1V
ORDER NO. 1V-644
DOCKET NO. 171000020
TYPE: ENFORCEMENT |
ADMINISTRATIVE ORDER BY CONSENT
(Pursuant to Rule 522.b.(3) of the Rules and Regulations of the
Colorado Oil and Gas Conservation Commission, 2 CCR 404-1)
FINDINGS
1. Longs Peak Resources, LLC (“Longs Peak”) (Operator No. 10611) is the operator of record for the Railay 28-3-1CH Well (API No. 123-39863) in Weld County (the “Railay Well”) and the Lazy D ZN #03-15HZ Well (API No. 123-31810) in Weld County (the “Lazy D Well”) (collectively, the “Wells”).
2. Longs Peak has operated the Wells since February 12, 2016. Longs Peak acquired the Railay Well from Cirque Resources on or about February 12, 2016. At the time of acquisition, the Railay Well was shut-in. Longs Peak restarted and began to flare gas from the Railay Well on or about June 20, 2016.
3. Beginning on or about June 20, 2016 and continuing to today, Longs Peak reported on its Form 7s, Operator’s Monthly Reports of Operations, that Longs Peak was flaring natural gas produced from the Railay Well. When Longs Peak began flaring gas from the Railay Well, Longs Peak had not submitted a Form 4, Sundry Notice, requesting approval prior to flaring at the Railay Well.
4. On August 19, 2016, COGCC Staff notified Longs Peak via email that flaring requires prior annual approval, and that Staff had previously notified Longs Peak of the requirement to obtain approval prior to flaring at the Railay Well. Longs Peak failed to submit a Form 4, Sundry Notice in response to this email.
5. On November 11, 2016, Commission Staff issued a Notice of Alleged Violation (“NOAV”) (No. 401147218) to Longs Peak, citing a violation of COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”), Rule 912.b (Venting or Flaring Natural Gas) for failure to obtain Director approval to flare at the Railay Well.
6. Following receipt of NOAV No. 401147218, on November 22, 2016, Longs Peak initially submitted a Form 4, Sundry Notice, requesting approval to continue flaring the Well and indicating that flaring had been ongoing since approximately September 29, 2014 (Doc. No. 401153920). COGCC Staff approved Longs Peak’s Form 4, Sundry Notice, on March 1, 2017.
7. During a factual investigation of the violations alleged in NOAV No. 401147218, Commission Staff discovered that from December 2016 through June 2017, Longs Peak failed to submit Form 7s, Operator’s Monthly Report of Operations, for the Lazy D Well, and from February 2017 through April 2017, Longs Peak failed to submit Form 7s for the Railay Well within 45 days after the end of each month, as required by Rule 309.a.
8. On September 1, 2017, Commission Staff issued NOAV No. 401389289 to Longs Peak, citing a violation of Rule 309.a. (COGCC Form 7, Operator’s Monthly Report of Operations) for failure to timely file Form 7s for the Wells, as described above.
9. On September 11, 2017, Longs Peak submitted a Form 7 containing information Longs Peak previously failed to provide as discussed in Finding No. 7, above.
10. Following a
factual investigation and legal review of the violations alleged in the NOAVs,
the Hearings Staff now asserts Longs Peak has committed the following
violations:
|
NOAV No. |
Rule No. |
Days of Violation |
Start Date |
End Date |
Class |
Impact |
Daily Base Penalty |
Total Penalty |
|
401389289 |
309.a |
209 |
02/14/2017 |
9/11/2017 |
1 |
Minor |
$200 |
$3,677 |
|
401147218 |
912.b |
155 |
06/20/2016 |
11/22/2016 |
2 |
Minor |
$2,500 |
$50,250 |
|
|
|
|
|
|
Subtotal |
$53,927 |
||
|
|
|
|
|
|
Settlement Discount (25%) |
($13,482) |
||
|
|
|
|
|
|
Total Penalty |
$40,445 |
||
Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $40,445 for the violations listed above. The penalty calculation is based on the following:
a. Rule 309.a;
i. Longs Peak failed to submit its Form 7s beginning in December 2016. Violation therefore commenced 45 days after the last day of December 2016, February 14, 2017. Violation ended when Longs Peak submitted the required Form 7 on September 11, 2017.
ii. Class 1, minor impact; and
iii. Daily base penalty of $200.
b. Rule 912.b.;
i. Violation commenced on June 20, 2016 (the date Longs Peak began producing the Railay Well and flaring the gas), and ended on November 22, 2016, the date on which Longs Peak initially submitted Form 4, Sundry Notice, requesting Director approval to flare the Well (Doc. No. 401153920);
ii. Class 2, minor impact;
iii. Daily base penalty of $2,500;
c. Application of the Duration Matrix from the COGCC Enforcement Guidance and Penalty Policy January 2015 (corrected 4/8/2015);
d. No mitigating or aggravating factors;
e. No pattern of violation;
f. No gross negligence or knowing and willful misconduct; and
g. A 25 percent penalty discount offered by Staff in pursuit of settlement.
AGREEMENT
NOW, THEREFORE, based on the Findings and pursuant to Rule 522.b.(3) and the Commission’s Enforcement and Penalty Policy, the Director and Longs Peak request that the Commission approve the Order set forth below.
RECOMMENDED this day of , 2017.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Steven J. Kirschner, Enforcement Officer
AGREED TO AND ACCEPTED this ______day of , 2017.
LONGS PEAK RESOURCES, LLC
By
Signature
of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Longs Peak Resources to resolve the NOAV, the COMMISSION ORDERS:
1. Longs Peak is found in violation of Rules 309.a. and 912.b., as described above.
2. Longs Peak will be assessed a total penalty of $61,827. Longs Peak will pay $61,827, by certified check, within 30 days after this approved AOC is mailed by the commission.
3. This AOC does not relieve Longs Peak from undertaking and completing abatement or corrective actions that may be required by the Notice of Alleged Violation described in Finding No. 4, above, or any amendments or modifications thereto specified by the COGCC Staff.
4. Compliance dates specified in this Order may be extended only for good cause, as determined at the Director’s sole discretion. A request for extension must be made, in writing, at least 14 days prior to the pertinent compliance deadline or as soon as possible if 14 days prior notice is not feasible.
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 approval by the Commission.
6. The Commission expressly reserves its right after notice and hearing, to alter, amend, or repeal any and/or all of the above orders.
===================================================================
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Prine, Secretary
CERTIFICATE OF MAILING
On _______________, a true and accurate copy of Commission Order 1V-644 was mailed by first-class mail return receipt requested to the following:
Longs Peak Resources, LLC
Attn: Edward Geiser
2323 S. Shepherd Dr., Suite 1150
Houston, TX 77019
____________________________________
Margaret Humecki