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 SAGA
PETROLEUM, L.L.C. WASHINGTON COUNTY, COLORADO
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CAUSE
NO. 1V
DOCKET
NO. 1312-OV-44
ORDER
NO. 1V-442
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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. Saga
Petroleum LLC (“Saga”) is the operator of the Jones-Dupree #9 Well (“Well”), a
secondary recovery injection well (API No. 05-121-10138) in Washington County,
Colorado. A 5-year mechanical integrity test (“MIT”) of the Well was due July
26, 2012 pursuant to Rule 326.a(4)A.
2. In August
2012, Saga became aware that the Well could not hold pressure and pass a MIT.
Saga proceeded to make repairs to the Well without submitting a Sundry Notice -
Form 4 and obtaining approval before any routine or planned casing repair
operations as required by Rule 317.d.
3. On
November 20, 2013, Commission Staff issued Saga Petroleum a Notice of Alleged
Violation (“NOAV”), No. 2618002, for the following violation of COGCC Rules of
Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”) at the Jones-Dupree #9
Well:
Rule 317.d (Casing
program to protect hydrocarbon horizons and groundwater) for failure to seek
authorization to repair casing.
4. Following
a factual investigation and legal review of the violations alleged in the NOAV,
the Hearings Staff now asserts Saga Petroleum has committed the following
violation:
a. Rule
317.d (Casing program to protect hydrocarbon horizons and groundwater) for
failure to seek authorization to repair the Well casing.
5. Pursuant
to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings staff
calculated a base penalty of $10,000 for this violation. The parties agree that
the following mitigating factors apply: 1) Saga demonstrated prompt, effective
and prudent response to the violation, including assistance to any impacted
parties; 2) Saga cooperated with the Commission with respect to the violation;
3) Saga made a good faith effort to comply with applicable requirements prior
to the Commission learning of the violation; and 4) the cost of correcting the
violation reduced or eliminated any economic benefit to Saga. Moreover, no
significant impact on the environment or on public health, safety, or welfare
occurred due to the violation.
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 Saga agrees to settle the NOAV on the following terms
and conditions:
I. Saga
will be assessed a penalty of $5,000.
II. Saga
will pay $5,000 within 30 days after this AOC is mailed by the Commission.
III. Saga
will submit Forms 5 and 5A with appropriate third party documentation and
submit a letter on company letterhead explaining how this violation will not be
repeated.
IV. Payment
of the penalty pursuant to this AOC does not relieve Saga from its obligations
to complete corrective actions set forth in the NOAVs, as may be amended or
modified by COGCC Staff.
IV. Saga agrees to the findings of this AOC only
for the purpose of expeditiously resolving the matter without a contested
hearing.
RECOMMENDED
this 6th day of December, 2013.
OIL
AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Peter J. Gowen, Enforcement Officer
AGREED TO AND
ACCEPTED this ______day of December , 2013.
SAGA
PETROLEUM L.L.C.
By
Signature
of Authorized Company Representative
Print
Signatory Name
Title
ORDER
HAVING
CONSIDERED the Agreement between the Director and Saga to resolve the NOAV, the
COMMISSION ORDERS:
1. Saga
is found in violation of one violation of Rule 317.d as described above.
2. Saga will be assessed a penalty of
$5,000 for the rule violation described above.
3. Saga will pay $5,000 within 30
days after this AOC is mailed by the Commission.
4. Saga will submit Forms 5 and 5A
with appropriate third party documentation and submit a letter on company
letterhead explaining how this violation will not be repeated.
5. Payment of the penalty pursuant to
this AOC does not relieve Saga from its obligations to complete corrective
actions set forth in the NOAVs, as may be amended or modified by COGCC Staff.
6. Entry of this Order constitutes
final agency action for purposes of judicial review 30 days after the date this
order is mailed by the Commission.
7. The provisions contained in the
above order are effective on the date this matter is heard and approved by the
Commission.
8. The Commission expressly reserves
its right after notice and hearing, to alter, amend, or repeal any and/or all
of the above orders.
==================================================================
The
Commission heard and approved this matter on the 16th day
of December, 2013.
ENTERED
this 16th day of December, 2013.
OIL
AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Robert
J. Frick, Secretary