RECORD OF PROCEEDINGS

           

                                                                                                                                                                            March18, 2002   

 

           The Oil and Gas Conservation Commission met on March 18th at 10:00 a.m. in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for a hearing in Cause Nos. 1V (2 matters), 112, and 517.

 

            Those present were:

 

                        Stephen Sonnenberg           Chair

Brian Cree                             Vice Chair

                        Tom Ann Casey                    Commissioner

                        Michael Klish                         Commissioner

Peter Mueller                         Commissioner

                        Abe Phillips                           Commissioner

                        Lynn Shook                            Commissioner

Carol Harmon                        Assistant Attorney General

Rich Griebling                        Director

Brian Macke                          Deputy Director

                        Patricia Beaver                     Hearings Manager

 

The Commission unanimously approved the minutes from the February 2002 meeting.

 

Executive Director’s Report:  Shane Henry, Assistant Director of the Department of Natural Resources (DNR) discussed the following:  The budget situation for the state shows a shortfall of 700 million dollars and the Executive Director’s Office is spending  a great deal of time on the budget dilemma.  The Department of Wildlife (DOW) is trying to reduce live population of deer in northwest Colorado by half to control wasting disease; this will affect both white tail and mule deer.  The bill being passed through the legislature to add an additional DOW Commissioner has changed and is now written to eliminate one (1) Commissioner.  The SB02-156 water bill is affecting in-stream flow rights and the SB02-141 has been transformed into a study group item that may be resurrected by April 25, 2002 or during the next legislative session.

 

Director’s Report: Director Griebling provided a written report and discussed the following:  The permit level has increased since the first few months of 2002, most likely due to the firming of natural gas prices.  In northwest Colorado the Forum members have decided to meet two times per year instead of four times in order to have more comprehensive meetings.  In southwest Colorado the Fruitland coal seams annual drilling plan estimates that approximately 104 wells will be drilled this year.  The southeast Colorado Raton Basin project is in the third phase.  On March 20, 2002, Loren Avis, southeast Colorado Environmental Protection Specialist will be attending the water quality and coalbed methane workshop.  The Water Quality Control Division and Commission and the COGCC will meet semi-annually rather than quarterly.  Twenty (20) COGCC staff members passed the Interstate Oil and Gas Compact Commission National Inspector Certification Program Exam and are now recognized as Certified State Oil & Gas Field Inspectors.  All nominations for the 2001 Outstanding Oil & Gas Operator Awards are due by May 17, 2002.  The FY 02-03 Budget Change Requests for the data clean up project year two (2) will most likely be approved this year.  Three variances were granted this month. 

 

Deputy Director Macke described the meeting on March 15, 2002 with Gunnison County on the proposed coalbed methane development by SG Interests and the COGCC permitting process.

 

Commissioner Cree asked for an update on whether anyone from Las Animas County has contacted the COGCC regarding the forum.  Commissioner Casey asked about the Grand Valley Citizens Alliance concerns about air pollution and air quality monitoring.

 

AAG’s Report:  Assistant Attorney General Harmon submitted a written memo to update the Commissioners on litigation.

 

Commissioner Comments:  Chair Sonnenberg thanked Vice Chair Cree for chairing the February hearing during his absence and also thanked him in advance for chairing the upcoming April hearing.

 

Consent Agenda:  The Commission unanimously approved the consent agenda, which included the following:

 

Cause No. 112, Docket No. 0203-UP-02, Ignacio-Blanco Field, La Plata County, request by Williams Production Company to pool all non-consenting owners in the 320-acre drilling and spacing unit consisting of the W½ of Section 13, Township 33 North, Range 9 West, N.M.P.M. for the development and operation of the Mesaverde Formation and the 640-acre drilling and spacing unit consisting of Section 13, Township 33 North, Range 9 West, N.M.P.M. for the development and operation of the Dakota Formation was approved.              

             Cause No. 517, Docket No. 0203-SP-08, Purgatoire River Field, Las Animas County, request by Petrogulf Corporation for an order to establish a 160-acre drilling and spacing unit consisting of the SW¼ of Section 15, Township 33 South, Range 67 West, 6th P.M. for production from the Raton and Vermejo Formations and to pool all non-consenting interests in the unit was approved.

 

            There were no audience comments.

             

            Cause No. 191, Docket No. 0202-AW-01, request by Calpine Natural Gas Company for an order to allow additional wells on the 640-acre drilling and spacing unit consisting of Section 22, Township 6 South, Range, 92 West, 6th P.M. was continued to the April 2002 hearing.

 

            Cause No. 112, Docket No. 0203-GA-03, request by J.M. Huber Corporation for an order to amend the permit for the Huber #3-24 Well located in the SE¼ SE¼ of Section 24, Township 35 North, Range 8 West, N.M.P.M. to allow the use of the appropriate downhole pumping device was continued to the April 2002 hearing.

 

            Cause No. 1R, Docket No. 0203-RM-01, request by COGCC to increase the charge imposed by the Conservation Mill Levy to $0.0012 (one and two-tenths) per dollar value was withdrawn due to a firming of natural gas prices.

 

            Cause No. 1V, Docket No. 0203-OV-03, request to approve an Order Finding Violation finding John Bakos in violation of Rule 1003.d. and 1004.a. for the Bakos Farm #1 JBS Well located in the NW¼ NE¼ of Section 35, Township 5 North, Range 9 West, 6th P.M.  The Commission heard testimony provided by Jaime Adkins, northwest Engineer and Morris Bell, Operations Manager in support of the staff’s position. The Well was plugged and abandoned but the surface was not reclaimed.  A letter was sent to Adkins from Mr. Bakos’ son-in-law which stated the date of Mr. Bakos’ death.  COGCC staff is requesting to claim the bond and use it to reclaim the surface.  The Commission finds Bakos in violation of Rules 1003.d. and 1004.a. and approves the staff’s request to claim the bond and reclaim the well site.   

 

            Cause No. 1V, Docket No. 0203-OV-04, request to approve an Order Finding Violation finding Domar Oil & Gas, Inc. in violation of Rule 302, 304, 319.b. and 709 for the Arthur George #1 Well located in the SE¼ NW¼ of Section 22, Township 33 South, Range 43 West, 6th P.M. and in violation of Rule 302, 319.b. and 326.b. for the Joe Ellis #1-14 Well located in the NE¼ of Section 14, Township 32 South, Range 44 West, 6th P.M.  The Commission heard testimony provided by Morris Bell, Operations Manager and Marsha Choury, Surety Administrator in support of the staff’s position.  No one from Domar Oil & Gas, Inc. was present.  The Commission finds Domar Oil & Gas, Inc. in violation of the above described rules, assesses a fine of Six Thousand dollars ($6,000), requires certain documents to be filed and certain work to be performed.  

 

            The meeting adjourned at 12:40 p.m.

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The Secretary was therefore authorized to issue the following orders:

 

Order No. 1V-221, Baca County:  Approves the Order Finding Violation finding Domar Oil & Gas, Inc. in violation of Rule 302, 304, 319.b. and 709 for the Arthur George #1 Well located in the SE¼ NW¼ of Section 22, Township 33 South, Range 43 West, 6th P.M. and in violation of Rule 302, 319.b. and 326.b. for the Joe Ellis #1-14 Well located in the NE¼ of Section 14, Township 32 South, Range 44 West, 6th P.M.  Domar Oil & Gas, Inc. was ordered to pay a fine of Six Thousand dollars ($6000) for the above violations; Domar Oil & Gas, Inc. shall provide an updated Registration for Oil and Gas Operations;  provide financial assurance for the Arthur George No. 1 Well; provide a new Certificate of Deposit with an approved Colorado Approved Public Depository Bank or other acceptable financial assurance for the Joe Ellis #1-14 Well; to either perform MIT’s, return to production or plug, abandon and reclaim the Arthur George No. 1 Well; to either perform MIT’s, return to production or plug, abandon and reclaim the Joe Ellis No. 1-14  Well.  If the work is not completed on the Joe Ellis No. 1-14 Well, COGCC staff is authorized to commence a claim on the Five Thousand dollar ($5,000) financial assurance and plug, abandon and reclaim the well.  If the work is not completed on the Arthur George No. 1 Well, COGCC staff is authorized to utilize the Environmental Response Fund to plug, abandon and reclaim the well.  All documents shall be filed and work shall be performed within thirty (30) days of the date the order is issued.

 

Order No. 1V-222, Moffat County:  Approves the Order Finding Violation finding John Bakos in violation of Rule 1003.d. and 1004.a. for the Bakos Farm #1 JBS Well located in the NW¼ NE¼ of Section 35, Township 5 North, Range 9 West, 6th P.M. and authorizes COGCC staff to commence a claim on the financial assurance and reclaim the well site.

 

Order No. 112-163, Ignacio-Blanco Field, La Plata County:  Approves the request by Williams Production Company to pool all non-consenting owners in the 320-acre drilling and spacing unit consisting of the W½ of Section 13, Township 33 North, Range 9 West, N.M.P.M. for the development and operation of the Mesaverde Formation and the 640-acre drilling and spacing unit consisting of Section 13, Township 33 North, Range 9 West, N.M.P.M. for the development and operation of the Dakota Formation.

 

            Order No. 517-8, Lorencito Field, Las Animas County:  Approves the request by Petrogulf Corporation for an order to establish a 160-acre drilling and spacing unit consisting of the SW¼ of Section 15, Township 33 South, Range 67 West, 6th P.M. for production from the Raton and Vermejo Formations and to pool all non-consenting interests in the unit.

 

 

Signed: 

           

Patricia C. Beaver, Secretary

 

 

Approved:

 

Stephen Sonnenberg, Chair