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. 1V-285
SETEX OIL & GAS COMPANY, ADAMS COUNTY, COLORADO )
ADMINISTRATIVE ORDER BY CONSENT
FINDINGS
1. On September 1, 2004, Colorado Oil and Gas Conservation Commission ("COGCC") staff conducted a routine inspection of the (UPRR) Vetter # 21-31 Well located in the NE¼ NW¼ of Section 31, Township 1 South, Range 64 West, 6th P.M. The well was determined to be incapable of production as a result of the surface production equipment being removed.
2. On September 3, 2004, COGCC staff issued a Notice of Alleged Violation ("NOAV") to Setex Oil & Gas Company ("Setex") for the (UPRR) Vettter # 21-31 Well. The NOAV cited violation of Rule 319.b.(3), failure to obtain Director approval for continuing shut-in status and Rule 326.b.(1), failure to perform a mechanical integrity test within thirty (30) days of removing the surface production equipment from the (UPRR) Vetter # 21-31 Well. Commission records indicate that the well has not produced since January 2000. The NOAV specified an abatement date of March 3, 2005.
3. Per return receipt, the NOAV was accepted by Setex on September 7, 2004.
4. On February 16, 2005, COGCC staff left a voice mail message for Mr. Greg Wiggins, Operations Representative, informing him that an Administrative Order by Consent would be issued if the (UPRR) Vetter # 21-31 Well was not brought into compliance by the March 3, 2005 deadline. Mr. Wiggins never responded.
5. On March 2, 2005, COGCC staff received a telephone message from Mr. Steve Schoppe, manager of the land and legal department. He informed staff that the (UPRR) Vetter # 21-31 Well had not been brought into compliance but was pending sale to another operator.
6. Setex should be found in violation of Rules 319.b.(3) and 326.b.(1) for the (UPRR) Vetter # 21-31 Well.
7. Rule 523. specifies a base fine of one thousand dollars ($1,000) for each violation of Rules 319. and 326.
8. Rule 523.d. provides for an increase of the fine if the violation involved recalcitrance on the part of the operator. Because this is the fourth well for which an AOC has been issued to Setex for the same violations, it is the recommendation of COGCC staff that the fine be increased.
9. A total monetary penalty of Ten Thousand dollars ($10,000) for violation of Rules 319.b.(3) and 326.b.(1) should be assessed against Setex Oil & Gas company for these violations in accordance with Rule 523.a. for the (UPRR) Vetter # 21-31 Well.
10. Setex should either plug, abandon and reclaim, perform and pass a mechanical integrity test or produce the (UPRR) Vetter # 21-31 Well by May 3, 2005.
11. If Setex does not plug, abandon and reclaim, perform and pass a mechanical integrity test or produce the (UPRR) Vetter # 21-31 Well by May 3, 2005, the Commission should authorize the COGCC staff to claim Setex Oil & Gas Company’s Thirty Thousand dollar ($30,000) blanket bond to plug, abandon and reclaim the well.
ORDER
NOW, THEREFORE IT IS ORDERED, that Setex Oil & Gas Company shall be found in violation of Rule 319.b.(3), failure to obtain Director approval for continuing shut-in status, and Rule 326.b., failure to perform a mechanical integrity test within thirty (30) days of removing the surface production equipment from the (UPRR) Vetter # 21-31 Well located in the NE¼ NW¼ of Section 31, Township 1 South, Range 64 West, 6th P.M.
IT IS FURTHER ORDERED, that Setex Oil & Gas Company shall be assessed a total fine of Ten Thousand dollars ($10,000) for violation of Rules 319.b.(3) and 326.b. for the (UPRR) Vetter # 21-31 Well, payable within thirty (30) days of the date the order is approved by the Commission.
IT IS FURTHER ORDERED, that Setex Oil & Gas Company shall be required to either: 1) perform a successful mechanical integrity pressure test; 2) properly plug, abandon and reclaim; or 3) return to production within sixty (60) days of the date this order is accepted for the (UPRR) Vetter # 21-31 Well.
IT IS FURTHER ORDERED, that if Setex Oil & Gas Company does not comply with the order, COGCC staff shall be authorized to commence a claim on the Thirty Thousand dollar ($30,000) plugging bond and proceed to plug, abandon and reclaim the 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.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
RECOMMENDED this day __________ of March, 2005.
9; 9; OIL AND GAS CONSERVATION COMMISSION
9; 9; OF THE STATE OF COLORADO
9; 9; By ____________________________________
David Dillon, Hearing Officer
Dated at Suite 801
1120 Lincoln St.
Denver, Colorado 80203
March 14, 2005
AGREED TO AND ACCEPTED THIS _________DAY OF ________________, 2005.
Setex Oil & Gas Company
By ____________________________________________
Title ___________________________________________