Code of Colorado Regulations
400 - Department of Natural Resources
404 - Oil and Gas Conservation Commission
2 CCR 404-1 - PRACTICE AND PROCEDURE
Section 434 - ABANDONMENT

Universal Citation: 2 CO Code Regs 404-1 ยง 434

Current through Register Vol. 47, No. 17, September 10, 2024

The requirements for abandoning a Well are as follows:

a. Plugging.

(1) An Operator will plug a dry or abandoned Well, seismic, core, or other exploratory hole, in such a manner that oil, gas, water, or other substance will be confined to the formation in which it originally occurred, isolating all zones specified in Rule 408.e, and zones identified and approved on the Form 6, Well Abandonment Report - Notice of Intent to Abandon. If the wellbore is not static before setting a plug in an open hole or after casing is removed from the wellbore, then the Operator will circulate any produced Fluids from the wellbore and will fill the wellbore with wellbore Fluids sufficient to maintain a balance or overbalance of the producing formation. Wellbore Fluids will be in a static state prior to pumping balanced cement plugs, unless the Operator is placing the cement plug as a preliminary step to counteract a high pressure or a lost circulation zone before establishing a static state. The Operator will fill intervals between plugs with wellbore Fluids of sufficient density to exert hydrostatic pressure exceeding the greatest formation pressure encountered while drilling such interval. If mud is necessary to maintain wellbore Fluids in a static state prior to setting plugs, the Operator will use a minimum mud weight of 9 pounds per gallon. The Operator will use water spacers both ahead of and behind balanced plug cement slurry to minimize cement contamination by any wellbore Fluids that are incompatible with the cement slurry. Any cement plug will be a minimum of 100 feet in length and will extend a minimum of 100 feet above each zone to be isolated. The material an Operator uses in plugging, whether cement, mechanical plug, or some other equivalent method approved in writing by the Director, will be placed in the Well in a manner to permanently prevent migration of oil, gas, water, or other substance from the formation in which it originally occurred. Cement will conform to the requirements in Rule 408.f. The Operator will ensure the slurry design achieves a minimum compressive strength of 300 psi after 24 hours and 800 psi after 72 hours measured at 95° Fahrenheit, or at the minimum expected downhole temperature, and at 800 psi confining pressure.

(2) The Operator will have the option as to the method of placing cement in the hole by (a) dump bailer, (b) pumping a balanced cement plug through tubing or drill pipe, (c) pump and plug, or (d) equivalent method approved by the Director prior to plugging. Unless prior approval is given, all wellbores will have water, mud, or other approved Fluid between all plugs.

(3) An Operator will not place substances of any nature or description other than that normally used in plugging operations in any Well at any time during plugging operations. An Operator will submit all final reports of Plugging and Abandonment on a Form 6 and include an operations summary or cement verification report from the plugging contractor, specifying the type of Fluid used to fill the wellbore, type and slurry volume of API Class cement used, date of work, and depth the plugs were placed.

(4) An Operator may not pull surface casing from any Well unless authorized by the Director.

(5) All abandoned Wells will have a plug or seal placed in the casing and all open annuli from a depth of 50 feet to the surface of the ground or the bottom of the cellar in the hole in such manner as not to interfere with soil cultivation or other surface use. For below-grade markers, the Operator will fit the top of the casing with a screw cap or a steel plate welded in place with a weep hole. For above-grade markers, the Operator will fit the top of the casing with a screw cap or a steel plate welded in place with a weep hole, and a permanent monument that will be a pipe not less than four inches in diameter and not less than 10 feet in length, of which four feet will be above ground level and the remainder embedded in cement or welded to the surface casing. Whether a below-grade or an above-grade marker is used, the Operator will inscribe the marker with the Well's legal location, Well name and number, and API Number. The Operator will not cap or seal the Well until 5 days after placing the last plug to allow monitoring for successful plugging and will cap or seal the Well within 90 days after placing the last plug.

(6) The Operator will obtain approval from the Director of the plugging method prior to plugging, and will notify the Director of the estimated time and date the plugging operation of any Well is to commence, and identify the depth and thickness of all known sources of Groundwater. The Operator will verify the placement of the plug required at the base of Groundwater and the placement of any other plug specified by the Director by tagging or by an alternative method approved by the Director. For good cause shown, the Director may require that a cement plug be tagged if a cement retainer or bridge plug is not used. If requested by the Operator, the Director will furnish written follow-up documentation for a requirement to tag cement plugs.

(7) Wells Converted for Water Supply.When the Well, seismic, core, or other exploratory hole to be plugged may safely be used as a water supply well, and such utilization is desired by the Surface Owner, the well need not be filled above the required sealing plug set below Groundwater; provided that written authority for such use is secured from the Surface Owner and, in such written authority, the Surface Owner assumes the responsibility to plug the well upon its abandonment as a water well pursuant to the Commission's Rules. Such written authority and assumption of responsibility will be filed with the Commission, provided further that the Surface Owner furnishes a copy of the permit for a water well approved by the Division of Water Resources.

b. Temporary Abandonment.

(1) If an Operator Temporarily Abandons a Well, the Operator will file a Form 4 within 30 days reporting and describing such activity, including the method used to ensure that the Well is closed to the atmosphere and the Operator's plans for future operation of the Well.

(2) A Well may be Temporarily Abandoned for a period not to exceed 6 months, if:
A. It has passed a successful mechanical integrity test pursuant to Rule 417.c, and the Director has approved the applicable Form 21;

B. The Operator cases or leaves the hole so as to prevent migration of oil, gas, water, or other substance from the formation or horizon in which it originally occurred;

C. The Operator closes the Well to the atmosphere with a swedge and valve or packer, or other approved method, and maintains it in that condition;

D. The Well sign remains in place; and

E. The Operator properly reports the Well as Temporarily Abandoned on the Form 7.

(3) A Well may be Temporarily Abandoned for a period that exceeds 6 months if:
A. The Operator complies with all requirements of Rule 434.b.(2);

B. The Operator submits a Form 4 requesting the extension of time, stating the reason for the request, and explaining plans for future operation;

C. The Operator complies with all requirements of Rule 434.c.(1).B;

D. The Operator performs all subsequent mechanical integrity tests required at the frequency specified in Rule 417.c.(2).

c. Plugging Inactive Wells.

(1) Within 6 months of a Well becoming Inactive, the Operator will Plug and Abandon the Well, unless the Operator:
A. Brings the Well back to production so that it is no longer an Inactive Well;

B. Files a Form 5B, Inactive Well Notice and provides Single Well Financial Assurance via a Form 3A, Financial Assurance, if required by the Operator's Financial Assurance Plan's requirements related to Low Producing Wells; or

C. Files a Form 6A, Out of Service Designation, to designate the Well as Out of Service pursuant to Rule 434.d.

(2) Form 5B, Inactive Well Notice. An Operator will submit to the Director a completed Form 5B for every Inactive Well.
A. Information Requirements. Operators will provide the following information on a Form 5B:
i. The reason why the Well for which the Form 5B is provided is Inactive; and

ii. The Financial Assurance Option and most recent Commission Order or Director Decision approving the Operator's Financial Assurance Plan.

B. Director Designation. The Director will designate any Well as Inactive if the Director has reasonable cause to believe that such Well is Inactive based on a review of an Operator's Form 7, Operator's Monthly Report of Operations. If an Operator disagrees with the Director's determination, it may appeal to the Commission pursuant to 503.g.(10). The matter will not be assigned to an Administrative Law Judge pursuant to Rule 503.h. The Commission will hear the appeal at its next regularly scheduled meeting.

C. Form 5C, Inactive Exception Request. An Operator may file a Form 5C to request from the Director an exception from the designation of a Well as Inactive for good cause. The Director will not approve a Form 5C unless the Operator demonstrates in sufficient detail that the Well for which a Form 5B would be provided is not properly designated as Inactive.

d. Out of Service Designation and Plugging List. An Operator will designate a Well as Out of Service on a Form 6A, Out of Service Designation, and the Out of Service Well is then placed on the Operator's Plugging List.

(1) An Operator may submit a Form 6A by December 31, 2023, or with a revised Financial Assurance Plan pursuant to Rule 702.b.(2). The designation of a Well is changed to Out of Service and the Out of Service Well is placed on an Operator's Plugging List effective the date of submission of the Form 6A.

(2) Wells. An Operator may submit a Form 6A:
A. For an oil or gas Well, after permanently ceasing hydrocarbon production;

B. For a Class II UIC Well, after permanently ceasing injection; or

C. For a Suspended Operations Well, a Waiting on Completion Well, a Well used for monitoring or observation, or a Stratigraphic Well, after the Well has been Shut-In or Temporarily Abandoned.

(3) Information Requirements for a Form 6A. Operators will provide the following information on a Form 6A:
A. The API number, name, and number of each Well the Operator proposes to add to its Plugging List and the date each Well ceased production or utilization;

B. Whether each Well is located within 2,000 feet of a School Facility, Child Care Center, High Occupancy Building Unit, or Residential Building Unit within a Disproportionately Impacted Community;

C. Whether each Well is located within wildlife habitat identified by Rule 1202.c;

D. The number of Wells the Operator has Plugged and Abandoned during the previous 12 months;

E. Evidence that the Operator is financially capable of meeting the timelines required by Rule 434.d.(4) for its Plugging List; and

F. Whether the Operator has detected a leak that was included on the Operator's delayed repair list in accordance with Colorado Department of Public Health and Environment, Air Quality Control Commission ("AQCC") Regulation No. 7, Control of Ozone Via Ozone Precursors and Control of Hydrocarbons Via Oil and Gas Emissions (Emissions of Volatile Organic Compounds and Nitrogen Oxides), 5 C.C.R. §§ 1001-9:D.II.E.8 & 9 (2022) (hereinafter "AQCC Regulation 7 Delayed Repair List Recordkeeping and Reporting Rules"). Only the version of the AQCC Regulation 7 Delayed Repair Recordkeeping and Reporting Rules in effect as of April 30, 2022 applies; later amendments do not apply. All materials incorporated by reference in this Rule are available for public inspection during normal business hours from the Public Room Administrator at the office of the Commission, 1120 Lincoln Street, Suite 801, Denver, CO 80203. In addition, the AQCC Regulation 7 Delayed Repair List Recordkeeping and Reporting Rules are available from the Colorado Department of Public Health and Environment, 4300 Cherry Creek Drive South, Denver, CO 80246, and is available online at https://www.colorado.gov/pacific/cdphe/aqcc-regs.

(4) Plugging and Abandonment of Out of Service Wells. An Operator will Plug and Abandon, commence Reclamation pursuant to Rule 1004, and, as applicable, commence site investigation, Remediation, and closure pursuant to Rules 913, 914, and 915 on each Out of Service Well on its Plugging List within the timeframes outlined below.
A. Reducing Impacts to Disproportionately Impacted Communities. Operators will prioritize the Plugging and Abandonment of all Out of Service Wells identified pursuant to Rule 434.d.(3).B.

B. If an Operator submits a Form 6A on or before December 31, 2023, the Operator will Plug and Abandon all designated Wells within the following timeframe:
i. For a Form 6A that contains 1-10 Wells, no later than December 31, 2027;

ii. For a Form 6A that contains 11-50 Wells, no later than December 31, 2028;

iii. For a Form 6A that contains 51-250 Wells, no later than December 31, 2029; and

iv. For a Form 6A that contains 251 or more Wells, no later than December 31, 2030.

C. If an Operator submits a Form 6A after December 31, 2023, the Operator will Plug and Abandon all designated Wells within four years from the Form 6A submittal date.

(5) Exception for Depressurization. Plugging and Abandonment of an Out of Service Well may require depressurization of the Well immediately prior to the permanent plugging of such Well. This depressurization, even if it results in gas production through sales equipment, is not considered hydrocarbon production for purposes of this Rule 434.d.

(6) Removal from Plugging List. A Well is removed from an Operator's Plugging List:
i. If an Out of Service Well is transferred to a Buying Operator's Plugging List or repurposed for beneficial use pursuant to Rule 434.d.(9); or

ii. Following the Director's approval of the Well's Form 6, Well Abandonment Report - Subsequent Report of Abandonment pursuant to Rule 435.b.(2). The removal of a Well from an Operator's Plugging List does not relieve an Operator of its obligations pursuant to Rules 913, 914, 915, and 1004 for such Well.

(7) Form 6B, Annual Out of Service Wells Report. An Operator will file a Form 6B, Annual Out of Service Wells Report, for the previous calendar year not later than March 31 of each year.
A. The Form 6B will document the progress of each of the following operations as of December 31 of the previous calendar year, as applicable, for each Out of Service Well on the Operator's Plugging List:
i. Plugging and Abandonment;

ii. Physical termination of electric service to associated Production Facilities;

iii. Purging of all piping, tanks, vessels, and other surface equipment; and

iv. Application of OOSLAT consistent with the 1100 Series.

B. The Form 6B will identify which Out of Service Wells have not been Plugged and Abandoned and are located within 2,000 feet of a School Facility, Child Care Center, High Occupancy Building Unit, or Residential Building Unit within a Disproportionately Impacted Community.

C. The Form 6B will identify which Out of Service Wells have not been Plugged and Abandoned and are located within wildlife habitat identified by Rule 1202.c.

D. The Form 6B will describe the Operator's compliance with the timelines in Rule 434.d.(4).

E. The Form 6B will identify whether the Operator has detected a leak that was included on the Operator's delayed repair list in accordance with AQCC Regulation 7 Delayed Repair List Recordkeeping and Reporting Rules, 5 C.C.R. §§ 1001-9:D.II.E.8 & 9, as incorporated by reference in Rule 434.d.(3).F.

(8) Director's Review of Plugging List and Form 6B. At any time, the Director may review an Operator's Plugging List or its most recent Form 6B to determine whether the Operator is financially and operationally capable of timely Plugging and Abandoning the Wells on its Plugging List within the timelines in Rule 434.d.(4).
A. The Director may request additional information from an Operator to demonstrate that it is financially and operationally capable of timely Plugging and Abandoning the Wells on its Plugging List. Such information may include the number and percentage of its Wells the Operator Plugged and Abandoned during the previous calendar years and its access to equipment, human, and capital resources necessary to timely Plug and Abandon its Out of Service Wells.

B. If, following a review of an Operator's Plugging List or most recent Form 6B, the Director has reasonable cause to believe that the Operator lacks the financial and operational ability to timely Plug and Abandon the Wells on its Plugging List or is not making substantial progress towards its obligations as demonstrated by progress reporting required by Rule 434.d.(7).A, and other information provided, the Director may:
i. Request additional Financial Assurance for some or all of the Out of Service Wells on the Operator's Plugging List; or

ii. File an application for a Financial Assurance hearing pursuant to Rule 503.g.(11) and request that the Commission order that the Operator provide Single Well Financial Assurance for each Well on its Plugging List.

C. If the Operator disagrees with the Director's request under Rule 434.d.(8).B.i, the Operator may file an application for a Financial Assurance hearing pursuant to Rule 503.g.(11).

(9) Transferring an Out of Service Well or Repurposing an Out of Service Well for Beneficial Use.
A. If a Selling Operator transfers an Out of Service Well, the Buying Operator assumes the obligations for the Well under this Rule 434.d, and must Plug and Abandon the Well or repurpose the Well for a beneficial use other than hydrocarbon production based on the Selling Operator's timeline pursuant to Rule 434.d.(4) unless the Buying Operator files, and the Director approves, a Revised Form 6A with an alternative timeline for the Buying Operator.

B. An Operator may repurpose an Out of Service Well on its Plugging List for a beneficial use other than hydrocarbon production, subject to the Director's written approval of a Revised Form 6A.

(10) Financial Assurance. If an Operator does not Plug and Abandon an Out of Service Well within the timelines in Rule 434.d.(4), the Operator will immediately provide Single Well Financial Assurance for the Well.

(11) Wellbore Integrity for Out of Service Wells.
A. An Operator will continue to conduct Bradenhead monitoring and testing pursuant to Rules 419 & 420 on an Out of Service Well until the Operator Plugs and Abandons such Well. An Operator is not required to conduct mechanical integrity testing on an Out of Service Well pursuant to Rule 417 but is subject to the mechanical integrity testing requirements set forth in this Rule 434.d.(11).

B. If an Out of Service Well is not equipped with Bradenhead access, the Well must pass an initial mechanical integrity test pursuant to Rule 417 and subsequent mechanical integrity tests at the frequency specified in Rule 417.c.(2).

C. The Director may require the Operator to perform a mechanical integrity test if the Director has reasonable cause to believe the Well poses a particular risk to public health, safety, welfare, the environment, or wildlife resources. Except as otherwise required by Rule 419 or 420 or an imminent and substantial threat to public health, safety, welfare, the environment, or wildlife resources, an Operator will have 12 months to perform a mechanical integrity test required by the Director under this Rule 434.d.(11).C.

D. Inspection Requirements. An Operator will conduct an Audio, Visual, Olfactory ("AVO") or other inspection of each Out of Service Well annually to confirm integrity of the wellhead. When performing an AVO inspection, an Operator will survey the wellhead using audio, visual, and olfactory techniques to detect failures, leaks, Spills, or Releases, or signs of a leak, Spill, or Release.

(12) This Rule 434.d does not apply to Gas Storage Wells, which the Commission considers to be active at all times unless the Gas Storage Well is physically plugged.

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