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. IV-272
PETROLEUM DEVELOPMENT CORPORATION )
WELD
COUNTY, COLORADO )
ADMINISTRATIVE ORDER
BY CONSENT
FINDINGS
1.
On September 3, 2002, a Colorado Oil and Gas Conservation Commission (“COGCC”)
Form 2, Application for Permit-to-Drill (“APD”), was approved for Petroleum
Development Corporation (“PDC”) to drill the Wells Ranch #14-2 Well located in
the SW¼ SW¼ of Section 2, Township 5 North, Range 63 West, 6th P.M.
2. The APD
for the Wells Ranch #14-2 Well specified the objective formation as the “J”
Sand. The APD was approved by the COGCC Director for only this formation.
3.
On May 12, 2004, PDC contacted COGCC staff by telephone and reported
that the Codell Formation had been completed in the Wells Ranch #14-2 Well
without proper APD approval.
4.
For the unauthorized completion of the Codell Formation in the Wells Ranch #14-2
Well, PDC should be found in violation of Rule 303.b., failure to have an
approved Application for Permit-to-Drill or Application for Permit to Recomplete
to the Codell Formation, Rule 301., not providing written notice of intention
to do work, and Section 34-60-117.(1) of the Oil and Gas Conservation Act, failure
to protect correlative rights of all owners in every field or pool.
5. Rule 523.
specifies a base fine of One Thousand dollars ($1,000) per day for each
violation of Rules 301. and 303., and a base fine for violations of the Oil and
Gas Conservation Act shall be determined by the Commission at its discretion.
6. A monetary penalty of Five Thousand dollars ($5,000.00)
should be assessed against PDC, in
accordance with Rule 523.a. and Rule 523.d., for violation of Rules 303.b., 301.,
and Section 34-60-117.(1) of the Oil and Gas Conservation Act. An aggravating factor
in determining the fine recommendation is that under Rule 523.d.(4) the
violation had the potential to have a significant negative impact on
correlative rights of other parties. A mitigating factor in determining the
fine recommendation is that under Rule 523.d.(1) the violator self-reported the
violation.
ORDER
NOW,
THEREFORE, IT IS ORDERED, that Petroleum Development Corporation shall be found
in violation of Rule 303.b., failure to have an approved Application for Permit-to-Drill
or Application for Permit to Recomplete to the Codell Formation, Rule 301., not
providing written notice of intention to do work, and Section 34-60-117.(1) of
the Oil and Gas Conservation Act, failure to protect correlative rights of all
owners in every field or pool for the Wells Ranch #14-2 Well located in the SW¼
SW¼ of Section 2, Township 5 North, Range 63 West, 6th P.M.
IT IS
FURTHER ORDERED, that Petroleum Development Corporation shall be assessed a fine of Five Thousand dollars ($5,000.00)
payable within thirty (30) days of the date the order is approved by the
Commission for violations occurring on the Wells Ranch #14-2 Well.
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 May, 2004
OIL
AND GAS CONSERVATION COMMISSION
By
Morris J.
Bell, Hearing Officer
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
May 00, 2004
AGREED
TO AND ACCEPTED THIS _________DAY OF May, 2004.
PETROLEUM DEVELOPMENT CORPORATION
By
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Title
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