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 GREAT WESTERN OPERATING COMPANY LLC, WELD COUNTY, COLORADO |
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CAUSE NO. 1V
DOCKET NO. 151200658
TYPE: ENFORCEMENT
ORDER NO. 1V-563 |
ADMINISTRATIVE ORDER BY CONSENT
(Pursuant to Rule 522.e.(1) of the Rules and Regulations of the
Colorado Oil and Gas Conservation Commission, 2 CCR 404-1)
FINDINGS
1. Great Western Operating Company LLC (“Great Western”) (Operator No. 10110) is the operator of the Spaur Brothers EH 31-222HN Well (API # 05-123-38693) located in Weld County, Colorado (the “Well”).
2. The Well was spud February 20, 2014. On April 8, 2014, Great Western released the rig. Pursuant to Rule 308A Form 5, Drilling and Completion Report, was due no later than 60 days after rig release – on or before June 7, 2014. On December 23, 2014, Great Western submitted the Form 5.
3. On May 28, 2014, Great Western completed the Well. Pursuant to Rule 308B, a Form 5A, Completed Interval Report, was due 30 days later – on or before June 27, 2014. On December 18, 2014, Great Western submitted the Form 5A.
4. Rule 309 requires Operators to file Form 7s, Operator's Monthly Report of Operations, within 45 days after the end of each month. The Colorado Oil and Gas Conservation Commission (“COGCC” or “Commission”) alleges that Great Western failed to timely file Form 7s covering March, 2015 to July, 2015. The forms were filed on September 17, 2015.
5. On August 24, 2015, COGCC Staff issued Notice of Alleged Violation (“NOAV”) No. 200436875 to Great Western for a violation of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”):
a. Rule 308A (COGCC Form 5, Drilling and Completion Report) for the failure to submit the Form 5 within 60 days following rig release;
b. Rule 308B (COGCC Form 5A, Completed Interval Report) for the failure to submit the Form 5A within 30 days following completion of a formation;
c. Rule 309.a (COGCC Form 7, Operator's Monthly Report of Operations) for the failure to file the Form 7 within 45 days after the end of the month.
6. Through the enforcement process, COGCC Staff identified Forms 5, 5A, 7 and 10 for additional wells operated by Great Western which are late or deficient.
Penalty Calculations
7. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $74,941 for these violations. The penalty calculation is based on the following:
|
NOAV No. |
Rule |
Days |
Start Date |
End Date |
Daily Penalty |
Total Penalty |
|
200436875 |
308A |
120 |
8/25/2014 |
12/23/2014 |
$2,500 |
$48,500 |
|
200436875 |
308B |
115 |
8/25/2014 |
12/18/2015 |
$2,500 |
$48,000 |
|
200436875 |
309a |
124 |
5/16/2015 |
9/17/2015 |
$200 |
$3,422 |
|
TOTAL BASE PENALTY |
$99,922 |
|||||
|
Settlement Inducement and Mitigating Factor (-25%) |
$24,981 |
|||||
|
FINAL PENALTY |
$74,941 |
|||||
a. Violations beginning after the effective date of HB 14-1356 (June 6, 2014);
b. For violations of Rules 308A and 308B, the Commission has determined that such violations constitute Class 2, Minor penalties. For violation of Rule 309, the Commission has determined that this violation constitutes a Class 1, Minor penalty;
c. Duration Matrix applied from the Enforcement Guidance and Penalty Policy;
d. Settlement inducement;
e. Mitigating factor (Rule 523.c.B.(2)) for cooperation with the Commission and prudent, effective response to the violation; and
f. No aggravating factors, pattern of violation, or gross negligence/knowing and willful misconduct.
AGREEMENT
NOW, THEREFORE, based on the Findings and pursuant to Rule 522.e.(1) and the Commission’s Enforcement and Penalty Policy, the Director proposes and Great Western agrees to settle the NOAV on the following terms and conditions:
I. The COGCC alleges Great Western is in violation of Rules 308A, 308B, and 309a, as described above.
II. Great Western has agreed to a penalty of $74,941.
III. Great Western will pay $74,941 within 30 days after this AOC is mailed by the Commission. Failure to pay the penalty by the deadline is an independent violation that may be subject to additional penalties.
IV. The term “Subject Forms” in this AOC refers to Forms 5, 5A, 7 and 10, which are late or deficient for wells operated by Great Western, due to the COGCC before January 15, 2016. “Correctly Submit” means accurate and complete at the time of submission, and includes the submittal of any missing Subject Forms.
V. Great Western will submit new Forms 5, 5A, and 10 (Form 10s shall be filed on an individual well basis, if a new filing is appropriate), covering the Postle IC 11-4HN (API # 123-37821) well, Postle IC 11-279HN (API # 12-339318) well, Postle IC 11-239HN (API # 123-39320) well, Postle IC 11-159HC (API # 123-39322) well, Postle IC 11-162HN (API # 123-39352) well, Postle IC 11-259HC (API # 123-39353) well, and the Postle IC 11-342HC (API # 123-38972) well, by January 15, 2016. Staff will review these forms and provide feedback to Great Western by January 29, 2016. Once approved by COGCC Staff, Great Western will have 28 days to submit any late or deficient Form 7s associated with these wells. Great Western will use the approved forms as templates for the corrective action described below.
VI. Great Western will make a good faith effort to Correctly Submit new Forms 5, 5A, and 10 (Form 10s shall be filed on an individual well basis, if a new filing is appropriate), covering the remaining Subject Forms, filed on a well-by-well basis, by the following deadlines: (a) 25% by February 29, 2016; (b) 25% by March 31, 2016; (c) 25% by April 30, 2016; and (d) 25% by May 31, 2016. On each deadline, Great Western will notify Staff which forms were submitted. As Staff approves the submitted forms, Staff will notify Great Western. Great Western will then have 28 days from notification to submit any late or deficient Form 7s associated with the wells. With respect to Form 7s that are Subject Forms but not otherwise associated with new Forms 5, 5A, or 10, Great Western will have until May 31, 2016, to submit those forms.
VII. If Great Western incorrectly submits a Subject Form, Great Western will have 14 days to Correctly Submit the Subject Form from the date that Great Western receives notice from COGCC of the deficiency.
VIII. COGCC will not issue NOAVs or otherwise seek or assess any monetary or other penalty for the Subject Forms if Great Western meets the corrective action requirements outlined above in Paragraphs V through VII. If Great Western does not meet the corrective action requirements outlined in Paragraphs V through VII, COGCC reserves the right to issue NOAVs and seek penalties pursuant to Rules 522 and 523. For Subject Forms that were due between August 24, 2014, and January 15, 2015, Staff shall only seek penalties pursuant to Rule 522.f. for a violation of this AOC. For Subject Forms that were due on or after January 16, 2015, Staff may seek penalties either for violations for the initial submission, or pursuant to Rule 522.f. for a violation of this AOC, but not both. Staff will not seek daily penalties from January 16, 2015 to the date that Great Western fails to perform a corrective action in Paragraphs V through VII. For any violations of this AOC pursuant to Rule 522.f., Staff shall only seek penalties for one violation of this AOC.
IX. For Subject Forms due on or after January 16, 2015, the statute of limitations, §34-60-115, C.R.S., is tolled from January 16, 2015 until May 31, 2016. For Subject Forms due before January 15, 2015, the statute of limitations is not waived, tolled, or otherwise affected by the corrective action set forth in Paragraphs V through VII.
X. Great Western agrees to the findings of this AOC only for the purpose of expeditiously resolving this matter without a contested hearing. Great Western 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 AOC. The findings and any action undertaken by Great Western pursuant to this AOC shall not constitute evidence of fault or liability by Great Western with respect to any third-party claim against Great Western. This AOC does not constitute an admission by Great Western of any alleged violation, factual allegation, or penalty determination or component.
RECOMMENDED this ___ day of January, 2016.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
Jeremy I. Ferrin
AGREED TO AND ACCEPTED this ___ day of January, 2016.
GREAT WESTERN OPERATING COMPANY LLC
By
Jeremy Conger, Senior Vice President of Operations
(Signature of Authorized Company Representative)
____________
Print Signatory Name and Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Great Western to resolve the NOAV, the COMMISSION ORDERS:
1. Great Western is found in violation of Rules 308A, 308B, and 309a, as described above.
2. Great Western will be assessed a penalty of $74,941.
3. Great Western will pay $74,941 within 30 days after this AOC is mailed by the Commission. Failure to pay the penalty by the deadline is an independent violation that may be subject to additional penalties.
4. The term “Subject Forms” in this AOC refers to Forms 5, 5A, 7 and 10, which are late or deficient for wells operated by Great Western, due to the COGCC before January 15, 2016. “Correctly Submit” means accurate and complete at the time of submission, and includes the submittal of any missing Subject Forms.
5. Great Western will submit new Forms 5, 5A, and 10 (Form 10s shall be filed on an individual well basis, if a new filing is appropriate), covering the Postle IC 11-4HN (API # 123-37821) well, Postle IC 11-279HN (API # 12-339318) well, Postle IC 11-239HN (API # 123-39320) well, Postle IC 11-159HC (API # 123-39322) well, Postle IC 11-162HN (API # 123-39352) well, Postle IC 11-259HC (API # 123-39353) well, and the Postle IC 11-342HC (API # 123-38972) well, by January 15, 2016. Staff will review these forms and provide feedback to Great Western by January 29, 2016. Once approved by COGCC Staff, Great Western will have 28 days to submit any late or deficient Form 7s associated with these wells. Great Western will use the approved forms as templates for the corrective action described below.
6. Great Western will make a good faith effort to Correctly Submit new Forms 5, 5A, and 10 (Form 10s shall be filed on an individual well basis, if a new filing is appropriate), covering the remaining Subject Forms, filed on a well-by-well basis, by the following deadlines: (a) 25% by February 29, 2016; (b) 25% by March 31, 2016; (c) 25% by April 30, 2016; and (d) 25% by May 31, 2016. On each deadline, Great Western will notify Staff which forms were submitted. As Staff approves the submitted forms, Staff will notify Great Western. Great Western will then have 28 days from notification to submit any late or deficient Form 7s associated with the wells. With respect to Form 7s that are Subject Forms but not otherwise associated with new Forms 5, 5A, or 10, Great Western will have until May 31, 2016, to submit those forms.
7. If Great Western incorrectly submits a Subject Form, Great Western will have 14 days to Correctly Submit the Subject Form from the date that Great Western receives notice from COGCC of the deficiency.
8. COGCC will not issue NOAVs or otherwise seek or assess any monetary or other penalty for the Subject Forms if Great Western meets the corrective action requirements outlined above in Paragraphs V through VII. If Great Western does not meet the corrective action requirements outlined in Paragraphs V through VII, COGCC reserves the right to issue NOAVs and seek penalties pursuant to Rules 522 and 523. For Subject Forms that were due between August 24, 2014, and January 15, 2015, Staff shall only seek penalties pursuant to Rule 522.f. for a violation of this AOC. For Subject Forms that were due on or after January 16, 2015, Staff may seek penalties either for violations for the initial submission, or pursuant to Rule 522.f. for a violation of this AOC, but not both. Staff will not seek daily penalties from January 16, 2015 to the date that Great Western fails to perform a corrective action in Paragraphs V through VII. For any violations of this AOC pursuant to Rule 522.f., Staff shall only seek penalties for one violation of this AOC.
9. For Subject Forms due on or after January 16, 2015, the statute of limitations, §34-60-115, C.R.S., is tolled from January 16, 2015 until May 31, 2016. For Subject Forms due before January 15, 2015, the statute of limitations is not waived, tolled, or otherwise affected by the corrective action set forth in Paragraphs V through VII.
10. 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.
11. 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, unless otherwise stated above.
12. The Commission expressly reserves its right after notice and hearing, to alter, amend, or repeal any and/or all of the above Order.
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ENTERED this ___ day of January, 2016, as of the 26th day of January, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary