BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF ALLEGED VIOLATIONS OF THE ) CAUSE NO. 1V
RULES AND REGULATIONS OF THE COLORADO OIL )
AND GAS CONSERVATION COMMISSION BY MAGPIE ) ORDER NO. 1V-323
OPERATING, INC., LARIMER COUNTY, COLORADO )
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. On September 8, 2007, the staff (“Staff”) of the Colorado Oil and Gas Conservation Commission (“COGCC” or “Commission”) inspected oil and gas operations of Magpie Operating, Inc. (“Magpie”) at the Dean Proctor #1 Well (API #05-069-06184, the “Well”), located in the SW¼ SW¼ of Section 28, Township 5 North, Range 68 West, 6th P.M.
2. Staff observed the accumulation of oil on a produced water pit, which is a violation of Rules 902.h., 907.a.(1), and 907.c.(1). Rule 902.d. requires the removal within 24 hours of any accumulation of oil on a produced water pit. Staff also observed lack of signage at the tank battery, Rule 210.b.(2) requiring permanent signs at the batteries.
3. On September 14, 2007, Staff issued Notice of Alleged Violation (“NOAV”) #1617964 to Magpie for violation of several Rules, including Rules 902.d., 907.a.(1), and 907.c.(1) for the accumulation of oil on a produced water pit, and Rule 210.b.(2) for lack of signage at the battery. The NOAV was sent by facsimile to Magpie on September 14, 2007 and via U.S. Postal Service on September 17, 2007.
4. The NOAV and the accompanying cover letter required Magpie to remove oil from the produced water pit within 24 hours and to keep it off. (The NOAV also required Magpie to conduct other abatement or corrective actions related to Rule violations that are not the subject of this Administrative Order by Consent (“AOC” or “order”) but may be in future AOCs or recommended Orders Finding Violation).
5. On September 27, 2007, Staff conducted a follow-up inspection at the Well and discovered that abatement had been attempted, but oil remained on the produced water pit. Staff concluded from the incomplete abatement that oil had not been removed within 24 hours, in violation of the NOAV, and that oil had accumulated and remained on the produced water pit at the Well for at least 10 days.
6. Magpie should be found in violation of the following Rules for the accumulation of oil on the produced water pit at the Well:
a. Rule 902.d., for failure to remove oil from the pit within 24 hours of discovery;
b. Rule 907.a.(1), for failure to ensure that E&P waste was properly stored and handled; and
7. Magpie should also be found in violation of the following Rule 210.b.(2) for failure to install permanent signs at the battery.
8. Rule 523.c. provides for the assessment of a base fine of $1,000 for violation of each of Rules 902.d. and 907.a.(1). Rule 523.c provides for the assessment of a base fine of $250 for violation of Rule 210.b.(2).
9. Magpie should be fined a total of $2,250 for violation of Rules 902.d., 907.a.(1) and Rule 210.b.(2) for the accumulation of oil on the produced water pit at the Well and failure to install permanent signs the battery.
10. Magpie does not admit to the alleged violations but agrees to pay the total fine set forth in Finding No. 9 to resolve this matter without the necessity of an extended contested hearing before the Commission.
11. Payment of the fine pursuant to this AOC does not relieve Magpie from its obligations to complete abatement or corrective actions set forth in the NOAV, as may be amended or modified by COGCC staff.
12. Magpie should execute this AOC no later than 14 days after the date it is executed by Staff for recommendation to the Commission for expedited approval. Fines may increase if this matter is not recommended for expedited approval.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Magpie Operating, Inc. shall be found in violation of the following Rules at the Dean Proctor #1 Well (API #05-069-06184, the “Well”), located in the SW¼ SW¼ of Section 28, Township 5 North, Range 68 West, 6th P.M. for the accumulation of oil on the produced water pit and failure to maintain signage: Rule 902.d., accumulation of oil on a pit must be removed within 24 hours of discovery, Rule 907.a.(1), E&P waste must be properly stored and handled, and Rule 210.b.(2) requiring a permanent sign at the battery.
IT IS FURTHER ORDERED, that Magpie Operating, Inc. shall be assessed a total fine of Two Thousand Two Hundred Fifty dollars ($2,250) for violation of Rule Rules 902.d, 907.a.(1), and 210.b.(2)., which shall be payable within thirty (30) days of the date this order is approved by the Commission.
IT IS FURTHER ORDERED, that this Administrative Order by Consent shall not relieve Magpie Operating, Inc. from undertaking and completing abatement or corrective actions that may be required by the Notice of Alleged Violation described in Finding No. 3 above, or any amendments or modifications thereto specified by COGCC Staff.
IT IS FURTHER ORDERED, that Magpie Operating, Inc. shall execute this Administrative Order by Consent no later than fourteen (14) days after the date it is executed by the Staff for recommendation of expedited approval by the Commission.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.
IT IS FURTHER ORDERED, that the Commission expressly reserves its right after notice and hearing, to alter, amend, or repeal any and/or all of the above orders.
RECOMMENDED this day of____________, 2008.
IN THE NAME OF THE STATE OF COLORADO
OIL AND GAS CONSERVATION COMMISSION
By ____
Carol Harmon, Enforcement Officer
Dated at Suite 801
1120 Lincoln St.
Denver, Colorado 80203
April 30, 2008
AGREED TO AND ACCEPTED this _________day of_______________, 2008.
MAGPIE OPERATING, INC.
By __________________________________________
Signature of Authorized Company Representative
____________________________________________
Print Signatory Name
____________________________________________
Title
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This cause came on for hearing before the Commission at 9:00 a.m. on June 11, 2008, in the Colorado River Room, Two Rivers Convention Center, 159 Main Street, Grand Junction, Colorado, for the approval of this Administrative Order by Consent.
ENTERED this________ day of June, 2008, as of June 11, 2008
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
June 30, 2008