$200,000 oil, gas fine cut to $20,000

State regulators reduced a fine over violations at four Delta County oil and gas wells to one-tenth of its original $200,000 amount after the company involved asked that it be reconsidered.

The Colorado Oil and Gas Conservation Commission in May imposed the $200,000 penalty against Colorado-based Aspen Operating LLC in connection with 20 alleged violations at four wells drilled northwest of Orchard City in 2006. Among them were temporarily abandoning the wells without the permission of commission staff, failing to perform mechanical-integrity tests on them, and not having bonding on them.

The original penalty represented the maximum amount allowable for the penalties, imposed after what regulators said was a lack of responsiveness and cooperation by Aspen Operating at the time.

Afterward, however, the company said it hadn’t been aware of the May hearing. Company officials said they thought the matter had been postponed but admitted that due to personal circumstances and lack of staffing due to cutbacks, the company had been at times difficult or impossible to reach.

Still, Aspen Operating official Craig Camozzi told the commission last week, “We don’t feel like that in good faith we were asked to come back to the table before the fine was assessed.”

In addition, he said, oil and gas commission staff erred in releasing bonds originally posted by the wells’ prior owner, and which continued to apply to the wells after Aspen Operating took them over. And Aspen Operating, which has no assets, since has found another company, Fram Americas LLC, to take over the wells, relieving the state of the financial liability of plugging the unbonded wells, Camozzi said.

The oil and gas commission Jan. 23 immediately agreed to a $40,000 reduction in the fine because that amount was associated with the alleged bond violations, and commission staff admitted they mistakenly released those bonds.

It then settled on a $20,000 fine after hearing that commission staff and the company previously discussed possibly agreeing to that amount during talks aimed at resolving the matter.


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