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 ) ORDER NO. 1V-336
TOP OPERATING COMPANY, )
WELD 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 5, 2008, TOP Operating Company (“TOP”) had an outstanding Notice of Alleged Violation (“NOAV”) (#1448224), issued by the staff (“Staff”) of the Colorado Oil and Gas Conservation Commission (“COGCC”) on May 30, 2007 for the Counter #2 Well (API #05-123-08035) located in the NE¼ NE¼ Section 30, Township 2 North, Range 66 West, 6th P.M., Weld County. The NOAV required TOP to perform a mechanical integrity test, produce, or plug the well by August 30, 2007.
a. In addition, the Counter #2 Well failed inspection in October 2008 because of junk, trash, weeds, oil-saturated soil, a leaking pumpjack gear box, leaking valves, and gas releasing from an open thief hatch.
b. On November 10, 2008, TOP submitted evidence that the site was cleaned up and that the well was producing.
c. On November 21, 2008, Staff issued a satisfactory field inspection and confirmed that the well was producing, which abated the NOAV.
d. On or before November 28, 2008, TOP reported that it has an agreement with the surface owner or tenant to store equipment onsite.
2. TOP has an outstanding NOAV (#1448225), issued by Staff on May 30, 2007 for the Counter #3 Well (API #05-123-10297) located in the SE¼ NE¼ Section 30, Township 2 North, Range 66 West, 6th P.M., Weld County.
a. The NOAV required TOP to perform a mechanical integrity test, produce, or plug the well by August 30, 2007.
b. On January 6, 2009, TOP submitted evidence that it can comply with the NOAV by March 16, 2009.
3. TOP has an outstanding NOAV (#200193320), issued by Staff on August 5, 2008 for the Knox #1-23 Well (API #05-123-07899) located in the SW¼ NW¼ Section 23, Township 2 North, Range 67 West, 6th P.M., Weld County.
a. The NOAV required TOP to perform various clean-up activities including berm construction and repair, weed control, shed repair, trash and junk removal, sign installation, leak repair, and oil-saturated soil removal.
b. The NOAV also required TOP to perform a mechanical integrity test, produce or plug the well.
c. The abatement deadline for the NOAV was November 5, 2008.
d. On November 21, 2008, COGCC staff inspected the site and confirmed that it had been cleaned up satisfactorily.
e. TOP has not completed the requirement to perform a mechanical integrity test, produce, or plug the well; on January 6, 2009, TOP provided evidence that this requirement will be completed by March 16, 2009.
4. TOP has an outstanding NOAV (#200193321), issued by Staff on August 5, 2008 for the Knox #22-23 Well (API #05-123-08731) located in the SE¼ NW¼ Section 23, Township 2 North, Range 67 West, 6th P.M., Weld County.
a. The NOAV required TOP to perform various clean-up activities including lease road repair, weed control, shed repair, trash and junk removal, sign installation, leak repair, and oil-saturated soil removal.
b. The NOAV also required TOP to perform a mechanical integrity test, produce or plug the well.
c. The abatement deadline for the NOAV was November 5, 2008.
d. On November 21, 2008, COGCC staff inspected the site and confirmed that it had been cleaned up satisfactorily.
e. TOP has not completed the requirement to perform a mechanical integrity test, produce, or plug the well; on January 6, 2009, TOP provided evidence that this requirement will be completed by March 16, 2009.
5. Pursuant to Rule 309., TOP should resume submitting monthly production reports for the Counter #2 Well from the time it returned the well to production. TOP should also submit a copy of the agreement allowing it to use the site for storage.
6. Pursuant to Rule 326.b., TOP should conduct a mechanical integrity test, or produce or plug the Counter #3 Well by March 16, 2009.
7. Pursuant to Rule 326.b., TOP should conduct a mechanical integrity test, or produce or plug the Knox #1-23 Well by March 16, 2009.
8. Pursuant to Rule 326.b., TOP should conduct a mechanical integrity test, or produce or plug the Knox #22-23 Well by March 16, 2009.
9. The COGCC should find TOP in violation of Rule 326.b. for failing timely to conduct a mechanical integrity test or produce or plug the Counter #3 Well, the Knox #1-23 Well and the Knox #22-23 Well.
10. Rule 523. specifies a base fine of One Thousand dollars ($1,000) for each day of violation of Rule 326.
11. The COGCC should impose a total fine of $6,000 for violation of Rule 326.b. at the Counter #3 Well, the Knox #1-23 Well and the Knox #22-23 Well, which takes into consideration the mitigating factor that TOP has made a good faith effort from September 2008 to date to resolve all outstanding NOAVs and failed inspections, and to clean up other sites that have not been inspected by Staff.
12. TOP should execute this Administrative Order by Consent no later than 10 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 TOP Operating Company shall be found in violation of Rule 326.b. for failing timely to perform a mechanical integrity test or produce or plug the following wells:
Counter #3 Well (API #05-123-10297) located in the SE¼ NE¼ Section 30, Township 2 North, Range 66 West, 6th P.M.,
Knox #1-23 Well (API #05-123-07899) located in the SW¼ NW¼ Section 23, Township 2 North, Range 67 West, 6th P.M., and
Knox #22-23 Well (API #05-123-08731) located in the SE¼ NW¼ Section 23, Township 2 North, Range 67 West, 6th P.M.
IT IS FURTHER ORDERED, that TOP Operating Company shall be assessed a total fine of Six Thousand dollars ($6,000) for violation of Rule 326.b., which shall be payable within thirty (30) days of the date this order is approved by the Commission.
IT IS FURTHER ORDERED, that TOP Operating Company shall resume submitting monthly production reports for the Counter #2 Well (API #05-123-08035) located in the NE¼ NE¼ Section 30, Township 2 North, Range 66 West, 6th P.M., from the time it returned the well to production.
IT IS FURTHER ORDERED, that TOP Operating Company should promptly submit a copy of the agreement allowing it to use the site of the Counter #2 Well (API #05-123-08035) located in the NE¼ NE¼ Section 30, Township 2 North, Range 66 West, 6th P.M., for storage.
IT IS FURTHER ORDERED, that TOP Operating Company shall execute this Administrative Order by Consent no later than ten (10) 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 January, 2009.
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
January 6, 2009
AGREED TO AND ACCEPTED this _________day of_______________, 2009.
TOP OPERATING COMPANY
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 January 13, 2009, in Suite 801, The Chancery
Building, 1120 Lincoln Street, Denver, Colorado, for the approval of this Administrative Order by Consent.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert A. Willis, Acting Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203