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 STEHLE OIL COMPANY, MOFFAT COUNTY, COLORADO

 

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CAUSE NO. 1V

 

DOCKET NO. 1401-OV-02

 

ORDER NO. 1V-444

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.            Stehle Oil Company (“Stehle”) (Operator No. 82440), is the operator of record for five wells: the Iles Investment Co #1-12, Iles Dome 3, Spring Gulch 1-22, Pinnacle Unit 2, and Pinnacle Unit 10-30 (“Subject Wells”), in Moffat County.

 

2.            COGCC Enforcement Staff notified Stehle Oil Company by certified mail on November 4, 2010 that it was delinquent in both its production reporting and its conservation levy reports.

 

3.            COGCC Enforcement Staff notified Stehle by certified mail on December 16, 2010 that it was still delinquent in both its production reporting and its conservation levy reports and, additionally, had failed to provide a COGCC Form 10, Change of Operator, as required by Rule 312.

 

4.            COGCC Enforcement Staff notified Stehle on July 19, 2011 that its late-filed Form 7 submissions had errors.

 

5.            COGCC Enforcement Staff notified Stehle by certified mail on January 26, 2012, that it had 65 delinquent Form 7s, and that this letter served as a final notice requiring the submission of these reports by February 26, 2012.

 

6.            On July 12, 2013, COGCC Enforcement Staff issued Notice of Alleged Violation (“NOAV”) No. 200382924 to Stehle for its operations. The NOAV cited violations of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”):

 

a.     Rule 309 (COGCC Form 7. Operator’s Monthly Production Report).

 

 

 

 

7.            The violations of Rule 309 relate to  the following wells:

 

API

Well Name

081-05136-00

Iles Investment Co 1-23

081-06501-00

Iles Dome 3

081-06547-00

Spring Gulch 1-22

081-05906-00

Pinnacle Unit 2

081-08459-00

Pinnacle Unit 10-30

 

8.            The July 12, 2013 NOAV required Stehle to submit all delinquent monthly reports by August 12, 2013. Stehle failed to comply with this corrective action date.

           

9.         Following a factual investigation and legal review of the violations alleged in the NOAV, the Hearings Staff now asserts Stehle has committed the following violations: Five violations of Rule 309 because Stehle has failed to file the Operator’s Monthly Production Report for five different wells.

 

10.         Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings staff has calculated a penalty of $50,000 for these violations.  Staff does not recommend any adjustments based on aggravating or mitigating factors. 

 

AGREEMENT

 

NOW, THEREFORE, based on the Findings and pursuant to Rule 522.b.(3) and the Commission’s Enforcement and Penalty Policy, the Director proposes and Stehle agrees to settle the NOAV on the following terms and conditions:

 

I.              Stehle will be assessed a penalty of $50,000.00 -- $5,000 due 30 days from the date the Order and invoice is mailed by the Commission, with the remaining $45,000 suspended, provided Stehle stays in full compliance with production reporting for one year from the date Stehle signs this AOC.

 

II.            If the requirements of the AOC are satisfied, the suspended portion of the penalty will be vacated. If the requirements are not satisfied, the suspended penalty will become due upon demand by the Director without further action by the Commission.

 

III.           Stehle will submit all delinquent Form 7s to the COGCC, as well as all delinquent quarterly Mill Levy Reports, due under Commission Rule 310. Stehle will also file a current Certificate of Clearance and/or Change of Operator form, due under Commission Rule 312. In addition, Stehle agrees to make any necessary changes to its Form 5A to reflect the correct producing formations. All these submittals are due no later than 21 days from the date Stehle signs this AOC.

 

ORDER

 

NOW, THEREFORE, THE COMMISSION ORDERS:

 

1.            Stehle will be assessed a penalty of $50,000.00 -- $5,000 due 30 days from the date the Order and invoice is mailed by the Commission, with the remaining $45,000 suspended provided Stehle stays in full compliance with production reporting for one year from the date Stehle signs this AOC.

 

            2.         If these requirements are satisfied, the suspended portion of the penalty will be vacated. If the requirements are not satisfied, the suspended penalty will become due upon demand by the Director without further action by the Commission.

 

3.         Stehle will submit all delinquent Form 7s to the COGCC, as well as all delinquent quarterly Mill Levy Reports, due under Commission Rule 310. Stehle will also file a current Certificate of Clearance and/or Change of Operator form, due under Commission Rule 312. In addition, Stehle agrees to make any necessary changes to its Form 5A to reflect the correct producing formations. All these submittals are due no later than 21 days from the date Stehle signs this AOC.

 

4.         Payment of the fine pursuant to this AOC does not relieve Stehle from its ongoing obligations to complete remaining corrective actions as set forth in the NOAV, as may be amended or modified by COGCC Staff.  Failure to satisfactorily complete the corrective actions or pay all fines will result in future enforcement action and other remedies as authorized by law by the Commission.

 

5.         Stehle, or its successors or assigns, will remain responsible for complying with this AOC, in the event of any subsequent sale of the Well.

 

            6.         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.

 

7.         An application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.

 

8.         Stehle agrees to the findings of this AOC only for the purpose of expeditiously resolving the matter without a contested hearing.

 

RECOMMENDED this 21st day of January, 2014.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

By______________________________________

    Peter J. Gowen, Enforcement Officer

 

 

 

AGREED TO AND ACCEPTED this _____ day of January, 2014.

 

                                                            STEHLE OIL COMPANY

 

 

By:________________________________     

                                                            Signature of Authorized Stehle Representative

 

____________________________________  

Print Signatory Name

 

____________________________________

Title of Signatory

 

 

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ENTERED this ______ day of _______, 2014, as of the ___ day of January, 2014.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By______________________________________

                     Robert J. Frick, Secretary