IN THE MATTER OF ALLEGED VIOLATIONS OF THE
CAUSE NO. 1
RULES AND REGULATIONS OF THE
COLORADO OIL AND GAS CONSERVATION
ORDER NO. 1V-124
COMMISSION BY NERDLIHC COMPANY, INC.,
WELD COUNTY, COLORADO
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on July 1, 1997, at 8:30
a.m., in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, after
giving Notice of Hearing as required by law, on why Nerdlihc Company, Inc. is in
violation of Rule No. 326.b.1., requiring temporarily abandoned wells to be
tested for mechanical integrity; Rule No. 319.b,, requiring temporarily
abandoned wells to be plug within six (6) months; and Rule No. 210.b., requiring
the posting of well signs, of the Oil and Gas Conservation Commission, and why
it should not invoke the provisions of §34-60-121 C.R.S., as amended, providing
for penalties for violations of the Rules and Regulations of the Commission for
certain wells.
FINDINGS
The Commission finds as follows:
1. Nerdlihc Company, Inc. is an interested party in the subject matter of the
above referenced hearing.
2. Due notice of the time, place and purpose of the hearing has been given in
all respects as required by law.
3. The Commission has jurisdiction over the subject matter embraced in said
Notice, and of the parties interested therein, and jurisdiction to promulgate
the hereinafter prescribed order.
4. From November 14 to November 30, 1991, the Nerdlich Company drilled the
Toedtli #1-10 Well. The well is located 2000' FSL and 1985' FWL in the NE¼SW¼ of
Section 10, Township 10 North, Range 57 West, 6th P.M. The Toedtli #1-10 Well
was completed and tested on January 11, 1992. The well tested 627 MCFD of gas
and 36 bbls of water on a 24 hour test. To date no production has ever been sold
from the Toedtli Well and no Form 10 has been filed with the Colorado Oil and
Gas Conservation Commission.
5. On September 5, 1996, the Toedtli Well site was inspected be Staff Engineer
Binkley. He reported the status of the well as temporarily abandoned and issued
Nerdlich Company a unsatisfactory inspection report. A Notice of Alleged
Violation (NOAV) was issued to Nerdlich Company, Inc. on September 9, 1997. The
NOAV cited Nerdlich for violation of Rule No. 326.b.1., requiring temporarily
abandoned wells to be tested for mechanical integrity; Rule No. 319.b,,
requiring temporarily abandoned wells to be plug within six (6) months; and Rule
No. 210.b., requiring the posting of well signs. The NOAV required Nerdlich to
perform a mechanical integrity test by October 12, 1996, or plug the well by
March 12, 1997. Nerdlich was also required to close open pits by October 12,
1996. To date Nerdlich Company, Inc. has not complied with the requirements of
the NOAV.
6. On April 24, 1997, the Colorado Oil and Gas Conservation Commission received
a letter from Lohf, Shaiman & Jacobs, Attorneys at Law, stating that the
Nerdlich mineral lease for the Toedtli #1-10 Well "had terminated for violation
of the implied duty to market". The letter also stated that certain clients of
Lohf et al had "obtained a new oil and gas lease from the current mineral
owners" and were interested in assuming responsibility for operation of the
Toedtli well.
7. On June 24, 1997, Richard C. Grimmette and Allen Heim, by their attorney,
filed with the Commission an Intervention to the staff request for order finding
violation, stating that their designee, Intermountain Oil Company, should be
recognized as the Operator of the Toedtli well since a Form 10, Form 4’s and a
bond were in place.
8. At the time of hearing on July 1, 1997, COGCC staff presented testimony and
requested that an order of the Commission be entered finding Nerdlihc Company,
Inc. in violation of Rule No. 326.b.1., requiring temporarily abandoned wells to
be tested for mechanical integrity; Rule No. 319.b,, requiring temporarily
abandoned wells to be plug within six (6) months; and Rule No. 210.b., requiring
the posting of well signs and assessing a fine of Nine Thousand Dollars ($9,000)
payable within thirty (30) days from the date the order is issued. The fine
should be reduced to Four Thousand Five Hundred Dollars ($4,500) if it is paid
by July 15, 1997.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Nerdlihc Company, Inc. shall be found in
violation of Rule No. 326.b.1., requiring temporarily abandoned wells to be
tested for mechanical integrity; Rule No. 319.b,, requiring temporarily
abandoned wells to be plug within six (6) months; and Rule No. 210.b., requiring
the posting of well signs for the Toedtli #1-10 Well located 2000' FSL and 1985'
FWL in the NE¼SW¼ of Section 10, Township 10 North, Range 57 West, 6th P.M
IT IS FURTHER ORDERED, that Nerdlihc Company, Inc. shall be assessed a fine of
Nine Thousand Dollars ($9,000) payable within thirty (30) days from the date the
order is issued. The fine shall be reduced to Four Thousand Five Hundred Dollars
($4,500) if it is paid by July 15, 1997.
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.
ENTERED this day of July, 1997, as of July 1, 1997.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By Patricia C. Beaver, Secretary
Dated at Suite 801, 1120 Lincoln Street Denver, Colorado 80203 July 3, 1997
(1V#124)