OGCC Secretary Update

Mick Thomas

Division Administrator, Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, November 2.

Current Items:
Upcoming OGCC Regular Meeting
Upcoming Oil & Gas Town Hall
Well Activity – Plug and Abandon, and Top Job
Allocation Investigation
Severance Taxes
News Article(s) of Interest

Upcoming OGCC Regular Meeting
The next regularly scheduled OGCC meeting is Wednesday, November 13 @ 1:00 PM at the Capitol Building in EW42. More Information can be found on the Home page and the Commission Meetings page of the OGCC Website.

Upcoming Oil & Gas Town Hall
Our quarterly Town Hall meeting is Wednesday, November 6 @ 5:30 PM at the Payette County District Courthouse. There will be a general update on oil and gas activities provided to the community, followed by a Q&A session.

Well Activity

Plug and Abandon
The past two weeks have seen a significant amount of well closure activity. The following wells have been plugged as of Saturday, November 2, 2019:

• ML Investments #1-10 (Inside LW Facility)
• Island Capital #1-19
• Espino #1-2
• White #1-10
• State #1-17
• Korn #1-22
• Tracy Trust #2-3

The ML Investments #1-10 and Island Capitol #1-19 had a deadline of December 2019 while the other five wells were to be done in October 2019. The removal of the wellheads and some additional tasks are schedule for next week, which will complete the abandonment requirements. The completed P&A work of these seven wells brings the operator into compliance with the terms of the P&A permits. IDAPA 20.07.02 states the plugging report shall be submitted to the Department within 30 days of the operation.

Top Job
The Department was notified last July that remedial cementing would be done on the Fallon 1-10. This is commonly called a “Top Job” and is performed prior to well production if needed. Below is a brief explanation of the process and reason taken from “better-cementing-for-all.org”:

Since the first casing is cemented in weak or unconsolidated formations, losses are common or excess cement may not have been enough.
This causes the top of cement to be below surface. In these cases, “top jobs” may be performed to ensure good cement at surface to support the casing.

The operator noticed the Department about their intent in July. They ultimately chose to delay the work until crews were on hand to do the P&A work on the wells noted above. Some prep work for the Top Job has been done on the Fallon 1-10 and the Top Job is scheduled for next week. IDL staff was on site for the entire time and will continue to monitor operations closely.

Allocation Investigation
The Department and High Mesa Holdings (HMH) has resolved volume discrepancies as a result of the Allocation Investigation. HMH is compiling and providing monthly plant volumes by well for natural gas liquids (NGLs). This process will take a few weeks for HMH to complete, but some data is already coming in. We will provide the complete data package to the Commission once received.

Severance Taxes
The Department is continuing to receive excellent cooperation from the Tax Commission regarding severance tax. HMH has hired an independent party to manage their accounting, and that company is working with the Tax Commission to ensure severance tax revenue is accurate.
We are reviewing calendar year 2019 as well as fiscal year 2020 revenue with the Tax Commission, and will provide a summary of this revenue to the OGCC at the November meeting.

News Article(s) of Interest

Weld County Colorado reacts to new state guidelines:

In Western States other than Idaho, Thousands of ‘orphan wells’ spark safety, cleanup fears: (PDF).