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Agenda 05/13/2014 Item # 12A
5/13/2014 12.A. EXECUTIVE SUMMARY Recommendation to authorize the County Attorney to attend a settlement meeting scheduled for May 15th in Tallahassee involving the potential challenge of a Consent Order entered into between the Florida Department of Environmental Protection and the Dan A. Hughes Company, L.P., and to direct the County Attorney to hold off filing a Petition until the Board has had the opportunity to review the County Attorney's report of the meeting. OBJECTIVE: To potentially resolve this dispute prior to the commencement of litigation. Please note that this has been and continues to be a rapidly evolving matter; any further changes shall be noted on the Change Sheet. CONSIDERATIONS: On or about December 18, 2012, the Department of Environmental Protection (hereinafter referred to as the "DEP") issued an Oil and Gas Well Drilling Permit (Permit No. 1349H, Collier-Hogan 20-3H Well) to the Dan A. Hughes Company, L.P. (hereinafter referred to as the "Hughes Company") to construct a well located at the Hogan Island Farm in Collier County, Florida. This Permit authorized the Hughes Company to drill a "horizontal completion targeting the Lower Sunniland Formation." Upon completion of the construction of the 20-3H Collier-Hogan Well, DEP issued a Five Year Operating Permit to Hughes Company on August 9, 2013 under the same permit number (Permit No. 1349H) to operate the well as an oil production well. On or about December 23, 2013, the Hughes Company e-mailed the DEP a workover notification concerning its operation permit for the 20-3H Collier-Hogan Well indicating its intent to conduct a "Workover Operation" commencing on December 28 or 29, 2013. Subsequently, at the request of the DEP, Hughes Company agreed to delay the Workover Operation until at least December 30 to allow DEP additional time to review and respond to the notice. The Hughes Company proceeded with the Workover Operation on December 30, 2013 and continued through January 1, 2014 despite oral notification by the DEP that the proposed Workover Operation was not approved. On December 31, 2013, the DEP entered a Final Order Requiring Operations at Well 20-3H Collier-Hogan to Cease and Desist. The Final Order noted that "the Department is not satisfied that it has sufficient information that the proposed workover would be protective of the State's groundwater resources" and ordered that the Hughes Company "CEASE AND DESIST all operations proposed in the December 23, 2013, workover notice." Even though DEP was clearly concerned that the Hughes Company's actions could adversely impact the State's groundwater resources, no notice of this Final Order was given to Petitioners Collier County or District, nor to the residents of Collier County, who depend and rely on these groundwater resources for their sole source of drinking water. Packet Page-228- 5/13/2014 12.A. On April 18, 2014, DEP issued the following Press Release: "STATEMENT FROM DEP REGARDING CONSENT ORDER WITH THE DAN A. HUGHES COMPANY, L.P. TALLAHASSEE — The Florida Department of Environmental Protection (DEP) finalized a Consent Order last week with the Dan A. Hughes Company, L.P. for unauthorized activities at the Collier—Hogan well south of Lake Trafford in Collier County. "The department caught the Dan. A. Hughes Company conducting unauthorized activities and immediately took action to assess the maximum civil penalties. In addition, the department is requiring Dan A. Hughes to hire an independent expert, approved by the department, to conduct ongoing groundwater monitoring of the area to ensure no damage to the environment or risk to the public occurred because of their unauthorized actions. The results of the monitoring will be reviewed by DEP experts." Background: The department closely regulates oil and gas exploration and extraction to protect public safety and our environment. Every activity is thoroughly reviewed to address waste fluid disposal, well integrity, groundwater protection and spill prevention. On Dec. 23, 2013, the Florida Department of Environmental Protection received a well completion procedure notice, also known as a workover notice, from the Dan A. Hughes Company, L.P. This request was for work to be conducted for well permit number 1349H, the Collier—Hogan well located south of Lake Trafford in Collier County. The drilling permit for this well was issued on Dec. 18, 2012, and the operating permit for the well was issued on Aug. 9, 2013. The department had concerns about the workover notice, which proposed an enhanced extraction procedure that had not previously been used in Florida. The company proposed to inject a dissolving solution at sufficient pressure to achieve some openings in the oil bearing rock formation that would be propped open with sand in pursuit of enhancing oil production. The department requested Dan A. Hughes Company, L.P. not move forward with the workover procedure until additional review could be performed. However, on Dec. 31, 2013, the department became aware the workover procedure had commenced, without approval. Because of the actions of Dan A. Hughes Company, the department was not afforded the opportunity to complete its review of the proposed procedure before operations began. As a result, a Cease and Desist Order was issued and the department immediately pursued formal enforcement." The County first received notice of both the Cease and Desist Order and the April 8th Consent Order from an April 18th Naples Daily News article that referenced the April 18th Packet Page-229- 5/13/2014 12.A. Press Release. At the April 22nd Board Meeting, Commissioner Nance, on add-on Item 10C, made the following recommendation to the Board: "Recommendation to direct the Collier County Attorney, supported by staff, to file a challenge to Consent Order (OGC File No. 14-0012) entered into on April 8, 2014, between the State of Florida Department of Environmental Protection (FDEP) and the Dan A. Hughes Company, L.P., regarding oil and gas well operations at the Collier-Hogan 20-3H Well (Permit No. 13491-1). Challenge to request the Consent Order be modified to require additional provisions for oversight, safeguards, and monitoring to protect the environment and insure the health, safety and welfare of the citizens of Collier County. Challenge to further request a protocol be established from FDEP that improves communication and coordination between the agencies regulating the Oil; and Gas Program and Collier County local government, and that copies be provided to Collier County of all application packages for future oil and gas exploration, production wells, and class II injection wells, as well as all permit related correspondence, additional submittals, meeting minutes, and agency action. Additional change(s)to the Consent Order as deemed appropriate by the Board." A copy of Commissioner Nance's Executive Summary and back-up is attached. The Board, following a full public hearing, adopted Commissioner Nance's recommendation, further directing that the Petition seek as an alternative remedy the revocation of the permit. The Thursday following the Board meeting, I received a telephone call from Matt Leopold, General Counsel to the Florida Department of Environmental Protection. Mr. Leopold had watched the Board discussion of the Hughes Oil Well matter, appeared very concerned, and expressed a strong desire to avoid litigation. I advised Mr. Leopold that I was under Board direction to file a Petition seeking administrative relief. I then received a second call, this time with Mr. Leopold and an agency member, who requested that Commissioner Nance be conferenced into the call. After Commissioner Nance joined the call, I had an open and frank discussion of the matter with DEP, who requested that the case be mediated prior to the initiation of the Administrative action. It is DEP's expressed belief that everyone involved would be more likely to discuss the issue in full candor in a mediation setting, in which all conversations are confidential, but that once litigation is commenced this will become impossible. The Friday following the Board meeting, I forwarded a draft Petition to DEP, which was then forwarded to Hughes. That led to additional conversations,and at my request, DEP extended the County's time to file the Petition until May 15 to allow me to bring this issue to the Board today. Since that time, both DEP and Hughes have agreed to attend a Settlement Meeting (rather than mediation) with the County at DEP's Offices in Tallahassee. The Settlement Meeting would be held May 15th (conditioned on Board direction today) and I expect DEP to further extend the County's time to answer the Petition prior to the time this Packet Page-230- 5/13/2014 12.A. matter is heard. Because of timing and cost issues, the County Attorney concurs that this be handled as a settlement meeting rather than in a mediation setting. Should the Board approve the recommendation, I have attached a proposed Amended Consent Order which, with Board approval, I will use as a basis for the Settlement Meeting. I hope to have a proposed Amended Consent Order back to the Board for its May 27th Meeting. Should the Board elect not to proceed with this Settlement Meeting, I will file the attached Petition following today's Board meeting. Should either DEP or Hughes later elect not to proceed with the Settlement Meeting, I will immediately file and advise the Board accordingly. FISCAL IMPACT: Travel and overnight costs to and from Tallahassee, of approximately $500,to be paid from the County Attorney's budget. GROWTH MANAGEMENT IMPACT: None. RECOMMENDATION: That the Board of County Commissioners authorize the County Attorney to attend a Settlement Meeting in Tallahassee involving the potential challenge of a Consent Order entered into between the Florida Department of Environmental Protection and the Dan A. Hughes Company, L.P., and to direct the County Attorney to hold off filing a Petition until the Board has had the opportunity to review the County Attorney's report of the meeting. PREPARED BY: Jeffrey A. Klatzkow, County Attorney Attachments: Consent Order; Executive Summary with back-up and Recap (Item 10C April 22 Meeting); Hughes' position set forth in a guest column in the Naples Daily News; Draft Petition; proposed Amended Consent Order Packet Page-231- 5/13/2014 12.A. COLLIER COUNTY Board of County Commissioners Item Number: 16.F.3 Item Summary: Recommendation to authorize the County Attorney to attend a settlement meeting tentatively scheduled for May 15th in Tallahassee involving the potential challenge of a Consent Order entered into between the Florida Department of Environmental Protection and the Dan A. Hughes Company,L.P., and to direct the County Attorney to hold off filing a Petition until the Board has had the opportunity to review the County Attorney's report of the meeting. Meeting Date: 5/13/2014 Prepared By Name: KathvnellCrotteau Title: Legal Secretary, CAO Office Administration Approved By Name: ColleenGreene Title: Assistant County Attorney, CAO General Services Date: 05/07/2014 01:50:31 PM Name: markisackson Title: Director-Corp Financial and Mngmt Svs, Office of Management Sz Budget Date: 05:'07/2014 02:33:38 PM Name: klatzkowjeff Title: County Attorney, Date: 05/07/2014 04:40:52 PM Name: oohs Title: Co?i'ny Manager, County Managers Office Date: 05 1i7'2014 05:10:07 PM Packet Page -232- 5/13/2014 12.A. EXECUTIVE SUMMARY Add-On Agenda Item - BCC 4-22-14 Recommendation to direct the Collier County Attorney,supported by staff, to file a challenge to Consent Order(OGC File No. 14-0012) entered into on April 8,2014 between the State of Florida Department of Environmental Protection (FDEP) and the Dan A. Hughes Company,L.P. regarding oil and gas well operations at the Collier-Hogan 20-3H Well (Permit No. 1349H). Challenge to request the Consent Order be modified to require additional provisions for oversight,safeguards, and monitoring to protect the environment and insure the health, safety, and welfare of the citizens of Collier County. Challenge to further request a protocol be established from FDEP that improves communication and coordination between the agencies regulating the Oil and Gas Program and Collier County local government, and that copies be provided to Collier County of all application packages for future oil and gas exploration, production wells, and class II injection wells, as well as all permit related correspondence,additional submittals, meeting minutes, and agency action. Additional change(s) to the Consent Order as deemed appropriate by the Board. OBJECTIVE: For the BCC to provide direction to staff in response to newly available information and documents, and reported developments regarding oil and gas operations in Collier County, including the utilization of unpermitted practices new to SW Florida and violation(s) of FDEP regulations. CONSIDERATIONS: News articles were published on Friday, April 18th after 5:00pm, and supporting documents released, regarding FDEP action against Dan A Hughes Company, L.P. related to oil well operations at the Collier-Hogan 20-3H Well (FDEP permit 1349H) located north and west of the intersection of Everglades Blvd and Immokalee Road. A Cease-and-Desist Order was issued by FDEP to Dan A Hughes Company, L.P., requiring the cessation of all operations on December 31, 2013. The Cease and Desist Order was followed by a Consent Order dated 04-08-14. Copies of both documents are attached. There has been substantial concern expressed by citizens of Collier County and beyond regarding oil and gas extraction proposals and operations in eastern Collier County and the greater Big Cypress and Everglades area. Initially, concerns were expressed by residents of Golden Gate Estates in the vicinity of 24th Ave NE adjacent to nearby lands where an oil well has been proposed and an Oil Exploration Permit has been applied for at FDEP. The citizen's • initial encounter related to the potential oil well was a safety/disaster preparedness related letter from the applicant's permitting consultant that sparked fear and anxiety among recipients and nearby residents. Numerous advocacy groups have become engaged. Additional oil and gas exploration and extraction sites have come under scrutiny. The Florida Oil and Gas Program and related activities are regulated by Federal and State agencies, primarily the Florida Department of Environmental Protection (FDEP), and the South Florida Water Management District (SFWMD). Despite its lack of authority, Collier County has supported and publicized public information meetings and distributed printed materials, to forward information and answer inquiries. Administrative challenges have been filed with FDEP and SFWMD by numerous parties. In response, and as part of the review and public input process, in March, several public hearings were conducted by FDEP and the US Environmental Protection Agency (EPA) in local venues. To date, citizen concerns regarding the Florida Oil and Gas Program it Packet Page -233-persist, and inconsistencies between • • 5/13/2014 12.A. disseminated information and applied oil well drilling practices and administration conducted by FDEP, SFWMD, land owner Collier Resources, the drilling contractor Dan A. Hughes Company, L.P., and citizens remain unresolved. Failure to disclose newly released FDEP Orders and administrative action during recent public meetings and hearings has further eroded public confidence in the Florida Oil and Gas Program, regulatory agencies FDEP and SFWMD, and by association, Collier County local government. Time Sensitivity: For the Collier BCC to file a challenge to the FDEP Consent Order as a party of substantial interest, a petition for an administrative hearing must be filed with and received by FDEP within 21 days of the original Consent Order, that date being on or before Tuesday, April 29th,2014. FISCAL IMPACT: Staff Time/minimal additional LEGAL CONSIDERATIONS: None GROWTH MANAGEMENT IMPACT: None RECOMMENDATION: Recommendation to direct the Collier County Attorney, supported by staff, to file a challenge to Consent Order(OGC File No. 14-0012) entered into on April 8, 2014 between the State of Florida Department of Environmental Protection (FDEP) and the Dan A. Hughes Company, L.P. regarding oil and gas well operations at the Collier-Hogan 20-3H Well (Permit No. 1349H). Challenge to request the Consent Order be modified to require additional provisions for oversight, safeguards, and monitoring to protect the environment and insure the health, safety, and welfare of the citizens of Collier County. Challenge to further request a protocol be established from FDEP that improves communication and coordination between the agencies regulating the Oil and Gas Program and Collier County local government, and that copies be provided to Collier County of all application packages for future oil and gas exploration,production wells, and class II injection wells, as well as all permit related correspondence, additional submittals, meeting minutes, and agency action. Additional change(s) to the Consent Order as deemed appropriate by the Board. PREPARED BY: Commissioner Tim Nance AGENDA DATE: April 22,2014—Add-on Agenda Item (5)Attachments: • FDEP vs. Dan A Hughes Company, L.P. Consent Order dated 4-8-14 • FDEP Well 20-3H Collier Hogan—Cease and Desist Order dated 12-31-13 • FDEP Statement regarding Consent Order with Dan A. Hughes Company, L.P. —4-18-14 • Newspaper articles published in the Ft. Myers News Press and the Naples Daily News- for reference only Packet Page -234- 5/13/2014 12.A. BEFORE THE STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION STATE OF FLORIDA DEPARTMENT IN THE DIVISION OF OF ENVIRONMENTAL PROTECTION WATER RESOURCE MANAGEMENT vs. OGC FILE NO. 14-0012 DAN A. HUGHES COMPANY,L.P. CONSENT ORDER This Consent Order("Order")is entered into between the State of Florida Department of Environmental Protection,("Department")and the Dan A.Hughes Company,L.P. ("Company"), to reach settlement of certain matters at issue between the Department and the Company. 1. The Department is the administrative agency of the State of Florida having the power and duty to protect Florida's air and water resources and to administer and enforce the - provisions of Chapters 377 and 403,Florida Statutes("F. S."),and Chapters 62C-25 through 62C-30,Florida Administrative Code("F.A.C."). The Department has jurisdiction over the matters addressed in this Order. 2. The Company is a"person"within the meaning of Section 403.161 and 403.031(5),F.S. 3. The Company obtained an Oil&Gas Well Drilling Permit from the Department in December of 2012(Permit No: 1349H,Collier-Hogan 20-3H Well)to construct a well to be located at the Hogan Island Farm in Collier County,Florida. 4. Upon completion of the construction of the 20-3H Collier-Hogan Well("Well"), the Company obtained a Five Year Operation Permit in August of 2013 to operate the Well as an oil production well. Packet Page -235- 5/13/2014 12.A. 5. On December 23,2013,the Company submitted to the Department a Workover Notification indicating that it intended to conduct a"Workover Operation"as described in Exhibit 1 attached hereto. This notice stated that the Company planned to commence the Workover Operation on December 28 or 29. Subsequently,at the request of the Department,the Company agreed to delay the Workover Operation until at least December 30 to allow the Department more time to review and respond to the notice. 6. The Workover Operation proposed by the Company began on December 30, 2013, and continued through January 1,2014. 7. On December 31,2013,the Department entered a Final Order Requiring •Operations at Well 20-3H Cease and Desist and served a copy of the Final Order on the • Company on December 31,2013. A copy of the Final Order is attached hereto as Exhibit 2. 8. The Company continued the Workover Operations until approximately 2:30 PM on the afternoon of January 1,2014. 9. The Company contends that at all times it was operating lawfully under a valid permit and followed all applicable procedures required to conduct the Workover Operations described in Exhibit 1. Having reached resolution of the matter,the Department and the Company mutually agree and it is, • ORDERED: 10. Within 10 days of the effective date of this Order,the Company shall pay the Department$25,000 in settlement of the regulatory matters addressed in this Order. This amount includes$20,000 for civil payments and$5,000 for costs incurred by the Department during the investigation of this matter and the preparation and tracking of this Order. • Packet Page -236- 5/13/2014 12.A. WELL SAFETY 11. Immediately upon execution of this Order or upon becoming available to the Company(whichever is later), the Company shall provide to the Department the information in paragraphs 12-14 below. 12. The Company shall provide Material Safety Data Sheets(MSDS)for all materials used in the Workover Operation described in Exhibit 1 attached hereto,along with the proportion and total volume of each material used in the Workover Operation. 13. The Company shall identify the total volume of water used in the Workover Operation,and the source of the water,including the permit number if the water was obtained from a permitted source and confirmation that the volume of water used for the Workover Operation does not exceed any limitation set in the permit. 14. The Company shall provide the following information concerning the flowback material management for the Well operations: (a) estimate of the total volume of flowback material; (b)storage capacity at the pad to contain any flowback material that is anticipated to be held onsite;(c)description of the secondary containment measures employed at the site; (d)the final disposal location for the flowback material resulting from the Workover Operation;and(e) and confirmation of the regulatory conditions on final disposal,including the permitting agency • and permit number(s). 15. The Company shall submit an Interim Spill Prevention and Cleanup Plan("ISPC Plan")to be implemented at the Well. The ISPC Plan shall be submitted to the Department within fourteen(14)days of the effective date of this Consent Order. If the Department requests additional information or notifies the Company that the ISPC Plan is inadequate or otherwise unacceptable,the Company shall provide the additional information or submit a revised ISPC Packet Page-237- 5/13/2014 12.A. Plan within the time frame,not less than fourteen(14)days,specified by the Department in the request or notification. Implementation of the Department approved ISPC Plan constitutes satisfaction of this requirement. ANALYSIS AND MANAGEMENT 16. The Company shall provide information and analysis to confirm that this Workover Operation was designed and carried out in a way that it is not likely to cause or contribute to any violation of any applicable groundwater quality standard. The Company,at its sole expense,shall retain independent third party experts with the appropriate qualifications to assess the likelihood that the Workover Operation will cause or contribute to a violation of any • applicable groundwater quality standards. This analysis shall consider at a minimum,the potential for injected or native fluids to migrate through the deep geological formations or the Well casing into surrounding groundwater bearing zones with total dissolved solids concentrations of 10,000 ppm or less. The Department and the Company shall make a good faith effort to reach mutual agreement on the selection of the third-party experts and the"Scope of Work"to be performed by the experts within 60 days of the effective date of this Order. Neither the Department nor the Company shall unreasonably withhold their approval of the experts or the Scope of Work for the analysis. The Scope of Work will be limited to analyses reasonably necessary to evaluate the likelihood that Workover Operations similar to the Workover Operations described in Exhibit 1 will cause or contribute to any violations of any applicable groundwater quality standards. The experts shall prepare a Report and submit the Report to the Department by December 1,2014. '17. Upon receipt of the Report,the Department shall review the Report and in a timely manner determine whether it provides sufficient information to evaluate the likelihood Packet Page -238- 5/13/2014 12.A. • that Workover Operations similar to the Workover Operations described in Exhibit 1 will cause or contribute to any violations of any applicable groundwater quality standards. To this end, within 30 days of the receipt of the Report the Department shall notify the Company and the Report author of any apparent errors or omissions and request any additional information needed to evaluate the likelihood groundwater standard violations would result from similar Workover Operations.The Company shall provide the additional information reasonably requested by the Department within 30 days of receipt of the Department's request. If at any time before the study is accepted by the Department anyone files a Workover notice for a Workover Operation similar to the Workover Operation described in Exhibit 1,the Department will respond to such notice with a request for information similar to the Scope of Work for the Report. 18. .No future Workover Operations similar to the Workover Operation described in Exhibit 1 shall be implemented at any of the Company's wells(existing and proposed under valid permits)until the completion and submittal of the Report described in paragraph 16. The Department agrees to provide written notice to the Company when it has satisfied the Report requirements of this Consent Order. 19. Within 30 days of the effective date of this Order,the Company shall submit a groundwater monitoring plan("Plan")to the Department. The objective of the Plan is to provide information regarding the likelihood that the Workover Operation will cause or contribute to any violation of any groundwater standard in the nearby groundwater aquifer used as public and private water supply. The Plan shall be developed and implemented at the expense of the Company. The Plan shall include: (a)a one-time analytical sampling of the flowback material prior to its final disposal. In addition to the analysis identified in Exhibit 3,the one-time analytical sampling of the flowback material shall be conducted using the following analytical Packet Page -239- 5/13/2014 12.A. methods: EPA Method 350.1 —total ammonia,EPA Method 8260 with required reporting of all target analytes and tentatively identified compounds having greater than 10%relative abundance, EPA Method 8270 with required reporting of all target analytes and tentatively identified compounds having greater than 10%relative abundance,EPA Method 8015C with all alcohols and glycols using the heated purge option cited in Section 11.1.2,FL PRO(State of Florida petroleum range organics),MA VPH(State of Massachusetts volatile petroleum hydrocarbons), Standard Methods 2504B—total dissolved solids,and Standard Methods 4500-CL F(listed as residual chlorine but measures total residual oxidants); ; (b)installation of a series of shallow monitoring wells,placed at the NW,NE, SW, SE corners of the pad. The wells shall be designed to test the full column of the potable water zone; (c)installation of one deep groundwater monitoring well on the pad and southwest of the subject well to a depth equal to the base of the sandstone aquifer(approximately 400');(d)ground water quality sampling and analyses of all wells;; (e) sampling and analyses of all monitoring wells on a quarterly basis for either ten(10) years from the date upon which the Department approves the groundwater monitoring plan or for five(5)years after plug and abandonment of the Well,which ever monitoring period shall expire first; (f)an inventory of freshwater supply wells within a quarter mile of the well bore hole;and(g)a schedule for implementing the Plan. 20. If the Department requests additional information or notifies the Company that the Plan is inadequate or otherwise unacceptable,the Company shall provide the additional information or submit a revised Plan within the time frame specified by the Department in the request or notification. Within 30 days of notification from the Department that the PIan is acceptable, the Company shall begin implementing the PIan. Packet Page -240- 5/13/2014 12.A. SETTLEMENT OF ALL DISPUTES 21. The terms of this Consent Order,upon execution,shall supersede the requirements of the Final Order Requiring Operations at Well 20-3H Cease and Desist. • 22. This Consent Order is in settlement of all disputes between the Company and the Department regarding the Permit No. 1349H,20-30H Collier-Hogan Well. The Department and the Company agree to act in good faith and to cooperate fully with each other in carrying out the intent of this Consent Order,and all matters related thereto,and for that purpose agree to execute any additional documents or take such action as may prove reasonably necessary to accomplish that intent. CONFIDENTIALITY 23. If any of the information submitted by the Company in response to the requirements of this Order is considered a trade secret or is otherwise confidential information in accordance with Chapter 377 or Section 403.111,F.S.,the Company shall request upon submittal of the information that the Department keep such information confidential. The Department will thereafter keep such information confidential in accordance with the requirements of Chapter 377 and Section 403.111,F.S. ORDER ADMINISTRATION 24. The Company acknowledges and waives its right to an administrative hearing pursuant to Sections 120.569 and I20.57,F.S.,on the terms of this Order. The Company acknowledges its right to appeal the terms of this Order pursuant to Section 120.68,F.S.,and waives that right upon signing this Order. 25. If any event,including administrative or judicial challenges by third parties unrelated to the Company,occurs which causes delay or the reasonable likelihood of delay,in Packet Page -241- 5/13/2014 12.A. complying with the requirements of this Consent Order,the Company shall have the burden of proving the delay was or will be caused by circumstances beyond the reasonable control of the Company and could not have been or cannot be overcome by the Company's due diligence. The failure of a contractor,subcontractor,materialman or other agent(collectively referred to as "contractor")to whom responsibility for performance is delegated to meet contractually imposed deadlines shall not be a cause beyond the control of the Company,unless the cause of the contractor's late performance was also beyond the contractor's control. Upon occurrence of an event causing delay,or upon becoming aware of a potential for delay,the Company shall notify the Department orally within 24 hours or by the next working day and shall,within seven calendar days of oral notification to the Department,notify the Department in writing of the anticipated length and cause of the delay,the measures taken or to be taken to prevent or minimize the delay and the timetable by which the Company intends to implement these measures. If the parties can agree that the delay or anticipated delay has been or will be caused by circumstances beyond the reasonable control of the Company,the time for performance hereunder shall be extended for a period equal to the agreed delay resulting from such circumstances. Such agreement shall adopt all reasonable measures necessary to avoid or minimize delay. Failure of the Company to comply with the notice requirements of this paragraph in a timely manner shall constitute a waiver of the Company's right to request an extension of time for compliance with the requirements of this Consent Order. 26. Entry of this Consent Order does not relieve the Company of the need to comply with applicable federal,state or local laws,regulations or ordinances. 27. The terms and conditions set forth in this Consent Order may only be enforced in a court of competent jurisdiction pursuant to Sections 120.69 and 403.121,F.S. Failure to Packet Page -242- 5/13/2014 12.A. comply with the terms of this Consent Order shall constitute a violation of Section 403.161(1)(6),F.S. 28. All submittals and payments required by this Consent Order to be submitted to the Department shall be sent to the Program Administrator of the Oil&Gas Program,Division of Water Resource Management,Florida Department of Environmental Protection,2600 Blair Stone Road,MS 3588,Tallahassee,FL 32399. 29. The Department hereby expressly reserves the right to initiate appropriate legal action to prevent or prohibit any violations of applicable statutes or the rules promulgated there- under that are not specifically addressed by the terms of this Consent Order. 30. This Consent Order is a settlement of the Department's civil and administrative • authority arising under Florida law to resolve the matters addressed herein.This Order is not a settlement of any criminal liabilities which may arise under Florida law, nor is it a settlement of any violation which may be prosecuted criminally or civilly under federal law. 31. Electronic signatures or other versions of the parties' signatures,such as pdf or facsimile,shall be valid and have the same force and effect as originals. No modifications of the terms of this Order shall be effective until reduced to writing, executed by both Respondents and the Department,and filed with the clerk of the Department. NOTICE OF RIGHTS 32. This Consent Order is a final order of the Department pursuant to Section 120.52(7),F.S.,and it is final and effective on the date filed with the Clerk of the Department unless a Petition for Administrative Hearing is filed in accordance with Chapter 120,F.S. Upon the timely filing of a petition, this Order will not be effective until further order of the Department. Packet Page -243- 5/13/2014 12.A. 33. Persons who are not parties to this Order,but w se substantial interests are affected by it,have a right to petition for • administrative hearinger Sections 120.569 and 120.57,F.S. Because the administrative hearing process is designed to formulate final agency action,the filing of a petition concerning this Order means that the Department's final action maybe different from the position it has taken in the Order. The petition for administrative hearing must contain all of the following information: a) The OGC Number assigned to this Order; b) The name,address, and telephone number of each petitioner;the name,address,and • telephone number of the petitioner's representative,if any,which shall be the address for service purposes during the course of the proceeding; c) An explanation of how the petitioner's substantial interests will be affected by the Order; d) A statement of when and how the petitioner received notice of the Order, e) Either a statement of all material facts disputed by the petitioner or a statement that the petitioner does not dispute any material facts; f) A statement of the specific facts the petitioner contends warrant reversal or modification of the Order, . g) A statement of the rules or statutes the petitioner contends require reversal or modification of the Order;and h) A statement of the relief sought by the petitioner,stating precisely the action petitioner wishes the Department to take with respect to the Order. The petition must be filed(received)at the Department's Office of General Counsel,3900 Commonwealth Boulevard,MS 35,Tallahassee,Florida 32399-3000 within 21 days of receipt of Packet Page -244- 5/13/2014 12.A. this notice. Failure to file a petition within the 21-day period constitutes a person's waiver of the right to request an administrative hearing and to participate as a party to this proceeding under Sections 120.569 and 120.57,F. S. Before the deadline for filing a petition, a person whose substantial interests are affected by this Order may choose to pursue mediation as an alternative remedy under Section 120.573, F.S. Choosing mediation will not adversely affect such person's right to request an administrative hearing if mediation does not result in a settlement. Additional information about mediation is provided in Section 120.573, Florida Statutes and Rule 62- • 110.1.06(12), F.A.C. FOR THE COMPANY: DAN A. HUGHES COMPANY, L.P. • By:Dan A. Hughes Management, L.L.C. Its general partner DATE ry -triers, 0/Vice President of Land P.O. Drawer 669.Beevilic Texas 78,104 ADDRESS DONE AND ORDERED this 8th day of April 2014, in Tallahassee Florida. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION Mark Thomasson P. B. Director, Division of Water Resource Management Packet Page-245- 5/13/2014 12.A. Filed,on this date,pursuant to Section 120.52,Fla.Stat,with the designated Department Clerk, receipt of which is hereby acknowledged. 4,2_,,izia.a Clerk Date Copies furnished to: Lea Crandall,Agency Clerk Mail Station 35 Packet Page -246- 5/13/2014 12.A. EXHIBIT I • This exhibit is protected as a confidential trade secret under section 815.045, Florida Statutes, and has been submitted separately. • • • Packet Page-247- 5/13/2014 12.A. EXHIBIT 2 Packet Page -248- .. 5/13/2014 12.A. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION In re: Dan A. Hughes Company LP Permit No: 1349H Well: 20-3H Collier-Hogan • ahla ORDER REQUIRING OP RATIONS AT WE r 40.3H COWER-HOGAN CEASE AND DESIST Pursuant to Section 403.081(8), Florida Statutes,the Department of Environmental Protection ("Department")is entering this Final Order requiring the Dan A. Hughes Company LP Immediately cease and desist from any further operations at the 20-3H Collier-Hogan well as proposed in its Well Proposal, Proposal No: 1001164796,dated December 23, 2013. The Department enters this Final Order in exercise of its power and duty to issue orders that are necessary to protect the State's waters from water pollution and states as follows: 1. On December 23,2013, Dan A. Hughes Company LP, through counsel, emailed the Department a workover notification concerning its operation permit for the 20-3H Collier-Hogan well indicating that it intended to conduct a workover operation. The notification provided seven pages of information on the workover proposal. 2. The December 23,2013, email indicated that the proposed workover operation would commence on December 29,2013. The proposed workover operation was initiated on December 30,2013,and is continuing to date despite oral notification by the Department that the proposed workover operation was not approved. Packet Page -249- • 5/13/2014 12.A. 3. After reviewing the documents attached to the December 23, 2013 email, the Department is not satisfied that it has sufficient Information that the proposed workover would be protective of the State's groundwater resources, and it is therefore ORDERED that Dan A. Hughes Company, LP CEASE AND DESIST all operations proposed in the December 23,2013,workover notification concerning the 20-3H Collier- Hogan well. Any party to this Final Order has the right to seek Judicial review of the Final Order under Section 120.68, Florida Statutes, by fling a Notice of Appeal under Rules 9110 and 9.190, Florida Rules of Appellate Procedure, with the Clerk of the Department of Environmental Protection, Office of the General Counsel, Mall Station 35, 3900 Commonwealth Boulevard,Tallahassee, Florida 32399-3000, and by filing a copy . of the Notice of Appeal accompanied by the applicable filing fees with the appropriate • district court of appeal. The Notice of Appeal must be filed within 30 days after this notice is filed with the clerk of the Department. Executed in Leon County, Florida on December 31,2013. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION Hof =I Vinyard Secretary • 2 Packet Page -250- ' 5/13/2014 12.A. CERTIFICATE OF SERVICE I CERTIFY that a true copy of the foregoing was sent electronic mail only to Richard S. Brightman and Timothy M Riley, Hopping Green &Sam PA, P.O. Box 6526, Tallahassee,Florida 32314-6526,Attorneys for Dan A. Hughes Company, L.P. at richardb @hcslaw.com;fimothvr@hoslaw.com,on this 31st day of December,2013. , I4s. ny M• •an Dep = eral FILED ON THIS DATE PURSUANT TO§120.52, FLORIDA STATUTES,WITH THE DESIGNATED DEPARTMENT CLERK,RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED. 4„e,,,,,,i4k W3� 3 ,�3 CLERK DATE 3 Packet Page -251- 5/13/2014 12.A. EXHIBIT 3 • Packet Page-252- 5/13/2014 12.A. April 26,2011 grS .0 FESCO,Ltd. 1100 FESCO Ave.-Alice,TX 78332 For Any Company Field: N/A Anywhere,USA County: N/A Sample: XYZ Well Date: 11/82011 Type: Well Water Time: 08:00 Formation: N/A Depth(Ft): N/A REPORT OF WATER ANALYSIS ****************Dissolved Solids*************** ***************Other Properties*************** mg/L meq/L Sodium(Na) 11563.70 ' 502.99 pH 6.90 Calcium(Ca) 279.69 I3.96 Specific Gravity Qt 60/60°F 1.020 Magnesium(Mg) 44.08 3.62 Resistivity(Ohm-meters @a 77.0°F) ----- 0.227 Barium(Ba) 1.95 0.03 Potassium(K) 73.22 1.87 Iron(Fe) 0.13 — Chloride(Cl) 17640.00 497.60 Stiff-Davis CaCO3 Stability Index Sulfate(SO4) 95.00 1.98 40- Carbonate(CO3) 0.00 0.00 Bicarbonate(HCO3) 407.00 6.67 `� e0 Hydroxide(OH) 0.00 0.00 100 yes 120• h. 140 \\S\ Sulfide(H2S) 0.00 � leo Total Solids 30105 ~ 200 Total Alkalinity(CaCO3) 333 .2 -1 0 1 2 Total Hardness(CaX3) 880 • Corrosive Seeing_> - Standard.meg Per Liter .. ^_.____._ _.____— C '�? :- -0i20 Cen _ _ �9r► HCO3tl 50411 100 80 60 40 20 t) 20 40 60 8!I 100 120 Log-meq Per Liter • 5 4 3 2 1 0 1 2 3 4 5 6 ' Certified: FESCO,Ltd. - 'Alice,Texas -- (1J:bes•o‘4,L4,ri David Dannhaus 361-661-7015 lob Number: 99999 . 9999 Packet Page -253- STATEMENT FROM DEP REGARDING CONSENT ORDER WITH THE DAN A. H... 5/13/2014 12.A. 4 ShareShareShareShareMore - Receive Updatesi Go 1 --..— .- ..- , -777-;'. 1, .77-71'":":.4 ::*.101.''r.':C...'-''. :! f* 6r-1 da--:De" -en to--'ff.!)VjitOtiiii:Oti.f8i:Piptectto mi ,,,,,-..--.-,..,:,!:i",;,..e.;:::;;, .-..4.,:,:,...,,..:,-,,-..._ _., . -,.,,,,.;-,,,,,:./....-- -: -ezt, ;..;,:,:. -.., ,10.*,-,,.7;..-,. ....,-,•:-,:,,,,.„,..?..,,,, ;,.i ......., :.,. .,, ,,,,,,,,,,.,...-:-...*.-.71,‘,-,,„:--....,,i•,:. :..,;,;,42.,?,...4.,,.".',.-:,;,._ ,,,-..,.. ,--, . ...,:;' .. .-..7.':;4.tfiTA::...:',._.',...'..,.. -,..7. 4'71,1•'.;"45'.,„,,r.1 .. •.,':''. -' :.-"' ,.:'!..„.,71,';',,V.,-440,-,'„="a..'. ' 1.,..f,n.li ,':,:--:'''''''':1' :'itt'''''''''''' '. - ' -4,A'Z'S7:;-',1` . -- ..; .;" .i ,... -'. ' '',*..r.t;:4F.ZiA'.1.''''s-';', 0":Z''‘''''',-' a .. • ., ;,..,',.'-...,,,. ':..,...U,),*.7.:,:rt:.," ;4),,),i' ''',...' '': .-NA ,v.: ,., .., ..,4 :„,„;:,,, A Al,:,..:-;,,,.„.',.,;...,,;',P,t,;:i.`"tt, 7"TT:ir,1::j..,-; ',.ta--..,■,,...,,,,4,1,',..Z.-.:.-;1.Z..,r.; . ,',4,..; '-'',,,:,,.* t......',,,,...i. ,„"Iri''')-1,. '''..-- , ..'"../;'''' ''!,A,.,%.,',-..::4,Lr.:z;-• . ........,1-,4-: ..,40-.. --, .... ;; i.".::. . - ....., -v•,:t.,1 Nr.:.-:.';',..i.:-',Y. .,:::3,'•.., - ..-, ,... , ,,.4.4;...:..t.47..ii,...5.0,-air .*.1,..,,,...,.., _ ...e.... ,,....,-- . . - - ..-, STATEMENT FROM DEP REGARDING CONSENT ORDER WITH THE DAN A. HUGHES COMPANY, L.P. Florida Department of Environmental Protection sent this bulletin at 04/18/2014 03:57 PM EDT I,,,,,,,,,.-,,,,..4..,,,,,,,,,,„,,,,,,,,,,,,,,t7. '7,4_,,,,i4„„,,z.-7'.--..,„--r*4..,--. ''',,ks'''''3'''''''''': . --:::''tv'tt- ..,. .,,a.....2.,,,„.. .,,....„.- 4 $',,-.2f,i,.. R.,.:''..t',4"''' .;A,..' ,—'.."-".-"' ''''''''---','a'^- ., -_, .,,,,,., ,,. , ,,._.„.,,,,...„,,,-;:,-;:-. ,'-'• .- ,:- :i '` ,,. . -' --,,, ....*-- '" "::-. A 4it.:: „ ;;:g:.;.,-.--'":1. ,. .,...t.,.. ,. , ,.,-.1i,A„,:,..%1T..:7_:-.:.7...,,,i.A. ,,.., -,,;v.',,.. , ;:-:;.... _---,-7-...,,,: ',,,;.."'.,,„,' — ..',. .,'4,.,,,..4.• =ii'''''i i'i:latbirJu; - --i-,?rioior4't,,-,,,;-.4A,,:ticiitii,c%7•i-t, - -.4-.;----4 1‘i.- .,, i, -f.,,,h,:),N,,,,*,, i,,l'i. ,,L'i`',,..';',..- ,::.t;,.;;;ii"-:•ri '''..;';'ik-,. ti,i,- ' ik :i. . ' •.i,t7:::;:il'ili'„----.,; ,.,a''" . ';4-:•ii•iY*4`," . t ii,i'•'•7-•,.'ij: ..21i,',il,.;.;:•,*.e... :,iiii. f,,,,,:v., •;,•-:ii-i,ii,no.- .*:`-o!. - •i‘i• -40.7,-i,i ,ilij: .!,t,"-4.ii'-•.4-viz,:-;-; :,.....'4;:::,..';‘,--.::::;:,,,;,- -.: 7 , -:',... ,z--zw,-.....,,,:;4,00..,,,,I.:.,:vvel,Vk -4,Ak-,#04*:4,..'Y:':•iy..,"..A.A-,q,;?.g.f.46, -'', ,,,I. : . ..,,... -1.,-;_....t.----- -- . ..,..... ., CONTACT: DEP Press Office, 850.245.2112, DEIDNi,ws@dop.sitat.c.fLus FOR IMMEDIATE RELEASE: Apr. 1C, 2014 STATEMENT FROM DEP REGARDING CONSENT ORDER WITH THE DAN A. HUGHES COMPANY, L.P. TALLAHASSEE-The Honda Department of Environmental Protection (DEP) finalized a Consent Ordir,iir li--,st week with the Dan A. Hughes Company, L.P. for unauti-icrized actwi'iies at the Co/ e'—!Hogan wet south of Lake Ti-afil.:gt in Collier County. --,-1-,,. 0„,;-,,i3;•7--,.,-_,-1,-, on j;-,,,,-,,,tii-,„:„. Dan A. i-lugii-i-es :-.c.: -,:-..;7;-,:). b:„:-IO•uctinigi u:ii,auti:iorlzle, i 2CliV.IC.-;: and ''-;■',E2:: .73i.:::.■ 1.30'c actor, 10 ar..S-1:,SS i',F... ME ". :"':V_IM CiVI' pe,-altiee. i,-.. -,idC,tioh, the r epartmPnt is reouiring an A. Hughes to hire an inoeperident expert, approved by the dcartment, to conduct ongoing groundwater monitoring of the area to ensure no carnage to the envii.onment or dsk',.".)the pub:is:occu-red because of their unauthorized actions. The results of the monitoring wit be reviewed by DEP experts." Backer 4/22/2014 1-ittp://content.uovdeliverv.conliaccounts/F Packet Page -254-,831) - STATEMENT FROM DEP REGARDING CONSENT ORDER WITH THE DAN A. H... 5/13/2014 12.A. The department closely regulates oil and gas exploration and extraction to protect public safety and our environment. Every activity is thoroughly reviewed to address waste fluid disposal,well integrity, groundwater protection and spill prevention. On Dec. 23, 2013, the Florida Department of Environmental Protection received a well completion procedure notice, also known as a workover notice, from the Dan A. Hughes Company, L.P.This request was for work to be conducted for well permit number 1349H, the Collier—Hogan well located south of Lake Trafford in Collier County.The drilling permit for this well was issued on Dec. 18, 2012, and the operating permit for the well was issued on Aug. 9, 2013. The department had concerns about the workover notice,which proposed an enhanced extraction procedure that had not previously been used in Florida. The company proposed to inject a dissolving solution at sufficient pressure to achieve some openings in the oil bearing rock formation that would be propped open with sand in pursuit of enhancing oil production.The department requested Dan A. Hughes Company, L.P. not move forward with the workover procedure until additional review could be performed. However, on Dec. 31, 2013, the department became aware the workover procedure had commenced,without approval. Because of the actions of Dan A. Hughes Company, the department was not afforded the opportunity to complete its review of the proposed procedure before operations began.As a result, a Cease and Desist Order was issued and the department immediately pursued formal enforcement. About the Florida Department of Environmental Protection The Florida Department of Environmental Protection is the state's principal environmental agency,created to protect, conserve and manage Florida's environment and natural resources.The Department enforces fecierai and state environmental laws protects Florida's air and water quality,cleans up pollution, regulates solid waste management promotes pollution prevention and acquires environmentally-sensitive lands for preservation,The agency also maintains a statewide system of parks,trails and aquatic preserves.To view the Department's website loo on to www.deo.state.fl.us. http:iicontent.00vdelivery.com//accounts/FLDE P/bulletins/bi863b :so-/ ' x' ti SUBSCRIBER SERVICES: F7: Manage Preferences I Delete Profile Help, g'::°,4 `� CHECK OUT DEP'S ONLINE NEWSROOM q: k D£LIVERYY http://content.govdelivery.cam/accounts/F Packet Page -2557.83b 4/22/2014 Company fined for technique consistent with Tracking' in Collier 5/13/2014 12.A. Company fined for technique consistent with 'fracking' in Collier Steve Doane,sdoane @news-press.com 7:49 p.m.EDT April 18,2019 a h � (Photo:Andrew West/News-Press) SHARE CONNECT (httns://twitter.com/intent/tweet?url=httn://newsar.es/lifEGOD&text=ComDanv%20fined%20for%n20tec The Florida Department of Environmental Protection has fined a Texas oil company for performing a drilling technique consistent with(racking in central Collier County. The company was fined$25,000 for its actions and is barred from using the technique further until it completes a groundwater study,according to DEP Spokeswoman Dee Ann Miller. According to a consent order filed by the DEP,the Dan A.Hughes Co.performed the unpermitted technique for two days in December and January and defied a cease-and-desist order from DEP for one day.The well in question is located at Hogan Island,which is located south of Lake Trafford,near the Corkscrew Swamp Sanctuary and Corkscrew Regional Ecosystem Watershed lands. Dan A.Hughes Co.,"proposed an enhanced extraction procedure that had not previously been used in Florida.The company proposed to inject a dissolving solution at sufficient pressure to achieve some openings in the oil bearing rock formation that would be propped open with sand in pursuit of enhancing oil production,"according to the DEP statement released late Friday. The description given by the DEP is consistent with hydraulic fracturing or"fracking,"which has been used extensively in part of Pennsylvania,North Dakota and Texas but has stirred the ire of environmentalists due to the potential for pollution and other problems,including earthquakes. According the Environmental Protection Agency fracking is performed by injecting a combination of water and chemicals into a geological formation at high pressure to fracture the rock.Once the rock is broken,the fluids expand the fracture and a propping agent is pumped in to keep them open and allow drillers to extract the resource. "That's pretty heavy.That's pretty serious,to introduce fracking to Southwest Florida without DEP approval,"said Matthew Schwartz,executive director of the Fort Lauderdale-based South Florida Wildlands Association,which is a plaintiff in a permit challenge to another proposed Dan A.Hughes well. DEP did not release more information about what Dan A.Hughes did.The technique qualifies as a"confidential trade secret"and is shielded from public disclosure under Florida law,according to the DEP order. Under Florida law,a company does not need a separate permit to perform hydraulic fracturing,but it must notify DEP and obtain permission. —Connect with this reporter on Twitter.(a Steve Doane (https://twitter.com/eSteve Doane land facebook.comlSteveDoaneJoumalist (http://facebook.com/SteveDoaneJoumalist) FL DEP consent order(http://www.scribd.com/doc/219066490/FL-DEP-consent-order)by jmwinchester7(htto://www.scribd.com/imwinchester71 http://www.news-press.com/story/life/outdoors/2C Packet Page -256-pH-company-for-unauthorized- ... 4/21/2014 5/13/2014 12.A. . DEP fines oil company for unauthorized work on Collier oil well: Naples Daily News Page 1 of 3 naples few.com Read more at naplesnews.com DEP fines oil company for unauthorized work p Y on Collier oil well By JUNE FLETCHER Originally published 06:06 p.m.,Apri118,2014 Updated 07:22 p.m.,April 18,2014 NAPLES—The Florida Department of Environmental Protection has finalized a consent agreement with the Dan A. Hughes Co.,fining the oil company for unauthorized activities at a well south of Lake Trafford in Collier County. On Friday, DEP said the Beeville,Texas-based company had commenced work at the Collier–Hogan well without DEP's permission on an enhanced extraction procedure that hadn't previously been used in Florida.The work continued from Dec. 30,2013, until Jan. 1,2014. In its settlement with the company,the DEP is assessing the maximum civil penalties of$25,000. It also is requiring the company to hire an independent expert to monitor the area to ensure no damage to the environment or public has occurred because of its actions. Specifically,it wants the expert to assess the likelihood that the operation"will cause or contribute to a violation of any applicable groundwater standards." Hughes also must submit an interim spill prevention and cleanup plan. In a news release that included a copy of its consent order, DEP said the drilling permit for the well on Hogan Island Farm was issued Dec. 18, 2012, and the operating permit for the well was issued Aug.9,2013. On Dec,23,2013,the DEP received a well completion notice, also known as a workover notice,from the Hughes Co.The company proposed injecting the well with a dissolving solution at sufficient pressure to create openings in the oil-bearing rock formation that would be propped open with sand. DEP asked Hughes not to move forward until it could review the process. But on Dec. 31, DEP learned that the work already had begun, and issued a cease-and-desist order. Cape Coral attorney Ralf Brookes,attorney for residents opposing another oil well the httn://www.nanlesnews.com/news/2014h Packet Page-257-,comnanv-unauthorized-work-... 4/19/2014 5/13/2014 12.A. DEP fines oil company for unauthorized work on Collier oil well: Naples Daily News Page 2 of 3 Hughes company wants to drill in the Golden Gate Estates area,criticized the DEP's actions Friday and called the fine a slap on the wrist. He said the information should have been disclosed during the many hearings on the Golden Gate Estates well, including hearings in late February before an administrative judge and in March before the Environmental Protection Agency and the Big Cypress Swamp Advisory Committee. it shocks the conscience,"he said,adding that it shows DEP has been acting in bad faith in its dealings with the public. Brookes said the procedure sounds like fracking,which he contends shouldn't be done in Southwest Florida because of its fragile limestone topography.The procedure poses a threat to the aquifers that supply the area's drinking water. Once they are polluted, they stay polluted, he said. "Florida is behind other states in adopting fracking prohibitions,"he said. Dan A. Hughes Co. officials couldn't be reached for comment Friday night after the DEP released the information at 5 p.m.The dates by the signatures on the consent order are April 7 and 8. Posted earlier The Florida Department of Environmental Protection has finalized an agreement with the Dan A. Hughes Co. for fines for unauthorized activities at the Collier—Hogan well south of Lake Trafford in Collier County. On Friday, DEP said the Beeville,Texas-based company had commenced work without DEP's permission on an enhanced extraction procedure that had not previously been used in Florida.The work continued from Dec. 30, 2013, until Jan. 1, 2014. The procedure involves dissolving solution at sufficient pressure to achieve some openings in the oil-bearing rock formation that would be propped open with sand,to enhance oil production. In its settlement with the company,the DEP said it is assessing the maximum civil penalties of$25,000. It also is requiring the company to hire an independent expert to conduct groundwater monitoring of the area to ensure no damage to the environment or public has occurred because of its actions. But Cape Coral attorney Ralf Brookes, attorney for residents opposing another oil well the Hughes company wants to drill near Golden Gate Estates,criticized the DEP's actions. httn•//www nanlecnewc enm/news/7f14/an Packet Page -258-mmnanv-imnanthnri7P.cl-wnrk- 4/19/2014 ' ` 5/13/2014 12.A. DEP fines oil company for unauthorized work on Collier oil well : Naples Daily News Page 3 of 3 He said the information should have been disclosed during the controversial hearings on the Golden Gate well, and said it showed the agency has been acting in bad faith in its dealings with the public. it shocks the conscience,"he said. Return to naplesnews.com later today for more on this developing story Related stories: • DEP sticks to decision to grant permit for Estates area oil well • Oil company's plan for explosions in prime panther habitat draws protest • Big Cypress Swamp panel recommends denial of Estates oil well permit •Angry crowd urges EPA lo reject permit related to Estates oil well project ®2014 Scripps Newspaper Group—Online http://www.naplesnews.com/news/2014/ai Packet Page -259-;ompany-unauthorized-work-... 4/19/2014 5/13/2014 12.A. COLLIER COUNTY Board of County Commissioners Community Redevelopment Agency Board (CRAB) Airport Authority 1, I , . 'OPr 1a AGENDA Board of County ty C om miss i n Chambers Collier County Government Center 3299 Tamiami Trail East,3rd Floor Naples FL 34112 April 22, 2014 9:00 AM Commissioner Tom Henning, District 3 -BCC Chair Commissioner Tim Nance, District 5 - BCC Vice-Chair; TDC Chair Commissioner Donna Fiala, District 1 - CRAB Chair Commissioner Georgia Hiller, District 2 Commissioner Fred W. Coyle, District 4- CRAB Vice-Chair NOTICE: ALL PERSONS WISHING TO SPEAK ON AGENDA ITEMS MUST REGISTER PRIOR TO SPEAKING. SPEAKERS MUST REGISTER WITH THE EXECUTIVE MANAGER TO THE BCC PRIOR TO PRESENTATION OF THE AGENDA ITEM TO BE ADDRESSED. ALL REGISTERED SPEAKERS WILL RECEIVE UP TO THREE (3) MINUTES UNLESS THE TIME IS ADJUSTED BY THE CHAIRMAN. COLLIER COUNTY ORDINANCE NO. 2003-53 AS AMENDED BY ORDINANCE 2004-05 AND 2007-24, REQUIRES THAT ALL LOBBYISTS SHALL, BEFORE ENGAGING IN ANY LOBBYING ACTIVITIES (INCLUDING BUT NOT LIMITED TO, ADDRESSING THE BOARD OF COUNTY COMMISSIONERS), REGISTER WITH THE CLERK TO THE BOARD AT THE BOARD MINUTES AND RECORDS DEPARTMENT. Page 1 April 22,2014 Packet Page -260- • 5/13/2014 12.A. REQUESTS TO ADDRESS THE BOARD ON SUBJECTS WHICH ARE NOT ON THIS AGENDA MUST BE SUBMITTED IN WRITING WITH EXPLANATION TO THE COUNTY MANAGER AT LEAST 13 DAYS PRIOR TO THE DATE OF THE MEETING AND WILL BE HEARD UNDER "PUBLIC PETITIONS." PUBLIC PETITIONS ARE LIMITED TO THE PRESENTER, WITH A MAXIMUM TIME OF TEN MINUTES. ANY PERSON WHO DECIDES TO APPEAL A DECISION OF THIS BOARD WILL NEED A RECORD OF THE PROCEEDING PERTAINING THERETO, AND THEREFORE MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCEEDINGS IS MADE, WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED. IF YOU ARE A PERSON WITH A DISABILITY WHO NEEDS ANY ACCOMMODATION IN ORDER TO PARTICIPATE IN THIS PROCEEDING, YOU ARE ENTITLED, AT NO COST TO YOU, THE PROVISION OF CERTAIN ASSISTANCE. PLEASE CONTACT THE COLLIER COUNTY FACILITIES MANAGEMENT DEPARTMENT LOCATED AT 3335 EAST TAMIAMI TRAIL, SUITE 1, NAPLES, FLORIDA, 34112-5356, (239) 252-8380; ASSISTED LISTENING DEVICES FOR THE HEARING IMPAIRED ARE AVAILABLE IN THE FACILITIES MANAGEMENT DEPARTMENT. LUNCH RECESS SCHEDULED FOR 12:00 NOON TO 1:00 P.M 1. INVOCATION AND PLEDGE OF ALLEGIANCE A. Reverend Beverly Duncan - Naples United Church of Christ 2. AGENDA AND MINUTES A. Approval of today's regular, consent and summary agenda as amended (Ex Parte Disclosure provided by Commission members for consent and summary agenda.) Approved and/or Adopted w/changes— 5/0 B. March 25, 2014 - BCC/Regular Meeting Approved as presented —5/0 C. April 1, 2014 - BCC/Workshop Minutes Approved as presented—5/0 Page 2 April 22,2014 Packet Page -261- 5/13/2014 12.A. holders to return to their sites. Presented; no discussion Item #7 to be heard no sooner than 1:00 pm unless otherwise noted. 7. PUBLIC COMMENTS ON GENERAL TOPICS NOT ON THE CURRENT OR FUTURE AGENDA Item #8 and#9 to be heard no sooner than 1:30 pm unless otherwise noted 8. BOARD OF ZONING APPEALS 9. ADVERTISED PUBLIC HEARINGS 10. BOARD OF COUNTY COMMISSIONERS A. Request for Reconsideration of Item #16A15, moved to Item #11F, from the March 25, 2014 BCC Meeting titled: Recommendation to direct staff to bring back an expedited amendment to Land Development Code (LDC), Section 2.03.07.G.6.b, adjusting the date for program participation regarding Immokalee Nonconforming Mobile Home Parks to January 9, 2020. (Commissioner Hiller) Approved—5/0 B. Recommendation to direct the County Manager and the County Attorney to bring back a plan that would allow the development of individual Commission District Municipal Services Taxing Units (CDMSTUs) for the purpose of reinvigorating the roadway landscaping beautification program or other improvements identified by the Board to have a public benefit. (Commissioner Fiala) Motion to approve—Approved 3/1 (Commissioner Henning opposed and Commissioner Coyle absent) Emergency Add-on and to be heard at 1:30 p.m. (Per Commissioner Nance during Agenda Changes) C. Recommendation to direct the Collier County Attorney, supported by Staff, to file a challenge to Consent Order(OGC File No. 14-0012) entered into on April 8, 2014 between the State of Florida Department of Environmental Protection (FDEP) and the Dan A. Hughes Company, L.P. regarding oil and gas well operations at the Collier-Hogan 20-3H Well (Permit No. 1349H). Page 5 April 22,2014 Packet Page-262- 5/13/2014 12.A. The County Attorney to ask for an Administrative hearing review w/FDEP asking them to revoke the permit w/Dan A. Hughes, Company, request a modification of the Consent Order to require additional provision for oversight,safeguards and monitoring—Approved 4/0 (Commissioner Coyle absent) 11. COUNTY MANAGER'S REPORT A. Recommendation to approve submission of a Site Selection Criteria application to the Florida Department of Veterans' Affairs to be selected as the location for the State's planned seventh State Veterans' Home and include an offer of$500,000 in additional cash funding for the project and approve all necessary budget amendments. (Steve Carnell, Public Services Administrator) Motion to approve staff's recommendations—Approved 5/0 B. Recommendation to approve a resolution accepting the proposal of STI Institutional & Government, Inc. (A SunTrust Company) to refinance the Collier County, Florida Gas Tax Revenue Bonds, Series 2005 in an amount up to $90,000,000; authorize the County Manager to take such action as is necessary to lock the interest rate for such Series 2014 Refunding Bond to achieve a gross debt service savings up to $11,075,000; and provide for an effective date. (Mark Isackson, Corporate Financial and Management Services Director) Resolution 2014-84 Adopted - 5/0 To be heard at 10:00 a.m. (Per Agenda Change Sheet) C. Recommendation to authorize the creation of additional Full Time Equivalent (FTEs) positions in the Growth Management Division in response to the addition of fire plan review responsibilities, increased customer demand and escalating traffic operations maintenance priorities. (Nick Casalanguida, Growth Management Administrator) Approved —5/0 D. Recommendation to award a construction contract to Quality Enterprises USA, Inc., for Bid No. 14-6245, Mercantile Avenue Roadway Improvements (from Airport-Pulling Road to Commercial Boulevard) Project No. 60188 funded by the Naples Production Park MSTU, in the amount of$1,185,290.16 and reserve $50,000 on the purchase order for funding allowances, for a total of$1,235,290.16. (Jay Ahmad, Page 6 April 22,2014 Packet Page -263- ;,uest column:Clearing the air on claims about our company:Naples Daily News 5/13/2014 12.A. i®1 ^nest column : Clearing the air on claims about our company Staff Reports Friday, May 2, 2014 By David Blackmon, Houston Managing Director/Strategic Communications, FTI Consulting It is unfortunate that the coverage of an oil and gas permitting matter has devolved into reports containing inflammatory and inaccurate quotes by activists about Dan A. Hughes Company. Most, if not all, of these allegations are not true and we appreciate this opportunity to correct the record. The Dan A. Hughes Company is new to the state of Florida and as our guiding principle is the safety of the public and the environment, we look forward to being an active and responsible member of the southwest Florida community for many decades to come. We are a Texas-based and family-owned independent producer that has been in business for more than 50 years. During that time, the company has successfully and safely drilled and completed thousands of oil and gas wells in various states in the United States, Canada and other parts of the world. v, with regard to some of the local coverage of our company as well as a false narrative being pushed .3ome to support their own agenda, Hughes was not "caught" while engaged in "illegal" drilling or hydraulic fracturing, as has been reported by so many. Nothing could be further from the truth. Compliance with the law is a core operating principle for the Dan A. Hughes Company, not just in Florida, but everywhere we operate around the world. We have fully complied with Florida's laws and regulations. Despite allegations to the contrary made by some activists, the DEP press release issued April 16 does not claim that Hughes was caught while engaging in "illegal" activities or "fracking." Our operation was a stimulation treatment very similar to acid stimulations that have been commonly used in Florida for over 50 years. (Collier County Utilities also commonly performs acidifications in both the construction and rehabilitation of water wells.) We followed the acid stimulation by injecting a modest volume of water and sand under sufficient pressure to prevent the formation from closing in on itself, as stated in the DEP Press Release. The volumes of water and sand used in this operation were about 1/10th of those typically used in hydraulic fracturing operations currently being used to develop shale formations in states like Texas, North Dakota and Pennsylvania. Shortly after the operation was completed, the DEP approached Hughes to settle the matter regarding the use of sand in the stimulation. In the spirit of cooperation, we agreed to enter into a consent order, which simply serves to confirm what Hughes already knows: that the workover operation that was performed is safe. Along with various other provisions, it is expressly stated in the consent order that Hughes would make a civil payment, not a fine or penalty, as has been erroneously reported. This civil payment was intended to principally reimburse the state for costs incurred. We plan to fully comply with all provisions of the order, and are in fact already in the process of doing so. •-ection of the environment and human health are our company's highest priorities. Our well completion 1_,,.,cess prevents any fluids from contacting underground water by sealing the well off from the reservoir with multiple layers of steel and concrete. At no time was the groundwater in any danger of coming into contact with fluids flowing through the well pipe. These are the facts of the matter. Packet Page-264- http://www.naplesnews.com/news/2014/may/02/guest-column-clearing-the-air-on-claims-about/?print=l[5/2/2014 11:09:16 AM] Guest column:Clearing the air on claims about our company:Naples Daily News 5/13/2014 12.A. As mentioned earlier, we take our responsibility and obligation to ensure your safety and the protection of your land and resources very seriously. Our hope is that future news reporting related to our operations in Florida will focus more on facts, and less on inflammatory statements from activists. © 2014 Scripps Newspaper Group — Online Packet Page -265- http://www.naplesnews.com/news/2014/may/02/guest-column-clearing-the-air-on-claims-about/?print=1[5/2/2014 11:09:16 AM] 5/13/2014 12.A. BEFORE THE STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION COLLIER COUNTY and COLLIER IN THE DIVISION OF COUNTY WATER-SEWER DISTRICT, WATER RESOURCE MANAGEMENT Petitioners, OG. .File No.: 14-0012 V. FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION, and DAN A. HUGHES COMP z L.P., . Respondents. 40* ` r w COLLIER COUNTY AND THE CCOLLIERi OUNT . TER-SEWER DISTRICT'S PETITION FOR AtIMINTSTRATIVEVEARING 0 tx k Petitioners, the Collier Cotnity Boardf. ® o iy Commissioners (hereinafter referred to as "Collier County") andthe Collier County Water-Sewer District (hereinafter referred to as the s r -tea "District''),.by°and through , undersignec.counsel, and pursuant to Sections 120.569 and E 120.57; Stat., and Ru`1e .2.8 106and 62-110.106, Florida Administrative Code (F.A.C.), hereby files tl�s etition for Formal Administrative Hearing challenging a Consent Order entered into between the Florida Department of Environmental Protection and the Dan A. Hughes rs Company, L.P. on AprilA ,.2014 (OGC File No. 14-0012, attached hereto as Exhibit "A"), relating to Dan A. Hughes Company, L.P.'s violation of Permit No.: 1349H, Collier-Hogan 20- 3H Well (attached hereto as Composite Exhibit`B"—Oil and Gas Well Drilling Permit and Five Year Operating Permit). 1 Packet Page-266- 5/13/2014 12.A. PROCEDURAL BACKGROUND 1. On or about December 18, 2012, the Department of Environmental Protection (hereinafter referred to as the "DEP") issued an Oil and Gas Well Drilling Permit (Permit No. 1349H, Collier-Hogan 20-3H Well)to the Dan A. Hughes Company, L.P. (hereinafter referred to as the "Hughes Company") to construct a well located at the Hogan Island Farm in Collier County, Florida. This Permit authorized the Hughes Compat *�'o drill a "horizontal completion targeting the Lower Sunniland Formation." Upon co °of the construction of the 20-3H Collier-Hogan Well, DEP issued a Five Year Operating Permit to = !hes Company on August 9, 2013 under the same permit number (Pe”t(Perth. No. 1349H) to operate 1y the well as an oil production well. 2. On or about December 23, s the Hughes Company e-mailed the DEP a workover A'r a N notification concerning its operation peramt for 1 3H 6614,5-Hogan Well indicating its intent to conduct bu; ' orko _,:Operatio c p ip enciri n December 28 or 29, 2013. L 4 Subsequently, at the request of ire,. DEP, flu..''o,s Company agreed to delay the Workover Operation L.L. , Decerrr 0 to all o •��s P Irichtiona l time to review and respond to the notice. The Hughes Company proceeded with the Workover Operation on December 30, 2013 and continued_through January, 2014'despite oral notification by the DEP that the proposed Yn' Workover Operation was not approved. 3. On December 3l,X2013, the DEP entered a Final Order Requiring Operations at Well 20-3H Collier-Hogan to Cease and Desist (Attached as Exhibit"C"). The Final Order noted that "the Department is not satisfied that it has sufficient information that the proposed workover would be protective of the State's groundwater resources" and ordered that the Hughes Company "CEASE AND DESIST all operations proposed in the December 23, 2013, workover notice." 2 Packet Page-267- 5/13/2014 12.A. 4. Even though DEP was clearly concerned that the Hughes Company's actions could adversely impact the State's groundwater resources, no notice of this Final Order was given to Petitioners Collier County or District, nor to the residents of Collier County, who depend and rely on these groundwater resources for their sole source of drinking water. 5. On April 18, 2014, DEP issued the following Press Release: "STATEMENT FROM DEP REGARDING CONSEI ,Al,RDER WITH THE DAN A. HUGHES COMPAN 7 TALLAHASSEE — The Florida Department o vironmen ,viotection (DEP) finalized a Consent Order last week with the Dan A. Huglies ompany, L.P.`f r nauthorized activities at the Collier—Hogan well south of Lake Trafford" Collier County. ¢l "The department caught the Dan. A. Hughes Company costing unauthorized activities and immediately took action to assess the • aximum cim,p en `nal addition;‘'es. In addition, department is requiring Dan A. Hughes to hire an 6endent expe approved by the department, to conduct ongoing groundwater monitoring of t'h`earea to ensure no`' :®sage to the environment or risk to the public occurred because of their unauthori da pons `'''esults of the monitoring will be reviewed by DEP experts " LSS1�'i, Background: The department closely„regulates o and gas exploration and extraction to protect public safety and our environment. Every activ ,, t• oroughly eviewed to address waste fluid disposal, well integrity groundwater protect o w ,: spii revention:,, On Dec.23, 2013, the lrorida'�� epartment ,o' Environmental Protection received a well completio =rocedure no also -e as a workover notice, from the Dan A. Hughes Company, iThis request ` for 6 ,to be conducted for well permit number 1349H, the Collier — Hogan' ell located request", of Lake Trafford in Collier County. The drilling permit for this well was issue on Dec. 1:"012, and the operating permit for the well was issued on Aug. 9, 2013. ti„ The department had c nrnsa"bout the workover notice, which proposed an enhanced extraction procedure that had not previously been used in Florida. The company proposed to inject a dissolving solution at sufficient pressure to achieve some openings in the oil bearing rock formation that would be propped open with sand in pursuit of enhancing oil production. The department requested Dan A. Hughes Company, L.P. not move forward with the workover procedure until additional review could be performed. However, on Dec. 31, 2013, the department became aware the workover procedure had commenced, without approval. Because of the actions of Dan A. Hughes Company, the department was not afforded the opportunity to complete its review of the proposed procedure 3 Packet Page-268- 5/13/2014 12.A. before operations began. As a result, a Cease and Desist Order was issued and the department immediately pursued formal enforcement." ************************* 6. Petitioners first received notice of both the Cease and Desist Order and the April 8th Consent Order from an April 18th Naples Daily News article that referenced the April 18th Press Release. Accordingly, this Petition is timely. 7. Collier County and the District hereby file .I' otice of Administrative Petition to challenge the Consent Order. te AFFECT GENCY 8. The affected agency is the Florida Depament Avironment :otection, Division of Water Resource Management, 39101 Commonwealth,. 3bulevard, Tallahassee, Florida 32399. DEP is an agency within the me s t • tion 120.52, Florida Statutes, and is the administrative agency o 'the; vte of Flo` d .having ®ower aiduty to protect Florida's air L and water resources and to administer and enforce the provisions of Chapters 377 and 403, Florida Statutes, ,and Chapters:46c-25y, through, 62C-30, Florida Administrative Code (Conservation of Oil and Gas) LLCED AGENCY ACTION 9. A Consent,Order issued:by DEP on or about April 8, 2014 (OGC File No. 14-0012). THE PETITIONERS 10. The Petitioners are the Collier County Board of County Commissioners and the Collier County Water Sewer District. For the purposes of this proceeding, Petitioners' address and telephone number are: Jeffrey A. Klatzkow, County Attorney 3299 Tamiami Trail East, Suite 800 Naples, FL 34112 4 Packet Page-269- 5/13/2014 12.A. Office: 239.252.8400 Fax: 239.252.6300 jeffklatzkow(a colliergov.net colleengreene @,colliergov.net COLLIER COUNTY AND THE COLLIER COUNTY WATER-SEWER DISTRICT'S SUBSTANTIAL INTERESTS AND STANDING 11. Collier County is a political subdivision of the State of Florida. Collier County operates as a non-charter County, governed by a five mem. ' c and of County Commissioners. By virtue of Article VIII of the Florida Constituti.. . • x .pter 125, Florida Statutes, the Collier County Board of County Commissioners njoys broad�� o ne rule powers, including £ a. traditional police powers, and is responsible , the public health and(welfare of all Collier County residents, many of whom rely,on relatively sh `;.ow tells for their water.-supply. 12. The Collier County Water'Sewer District is an ind pendent special district in Collier County, and presently operates under Chapter 20f 53 Law of Florida, having been initially established by Chapr 3-43 : .'s 2003 Sped ct re- shed the District as a political subdivision of the state and a body corporate `: .°• politic, and designated the Collier County Board of`CoountyItommissi5ne as its '_.:Serning4 oard. The 2003 Special Act provided the following s islative inters tr the District: "It is declared as a m .r of legis tive determination that the extensive growth populatio and attendant+commerce throughout Collier County continue to give rise to public and water supply concerns...that it is the intent of the ,health legislature to continue,, uthorize the Board of County Commissioners of Collier County to act as the.governing board (district board) of the Collier County Water- Sewer District with overall responsibility for the provision of water and sewer services to specified geographic areas of Collier County as hereinafter provided." Laws of Fla. ch. 2003-353, § 3 13. The District currently services over 200,000 Collier County residents with drinking water, and must strictly comply with stringent Federal and State regulations to ensure the water's safety and quality. 5 Packet Page-270- 5/13/2014 12.A. 14. There are presently two areas in Florida with oil fields. One area is north of Pensacola, and constitutes two-thirds of Florida's inland oil production. The other area is largely within Collier County, and is known as the Sunniland Oil Field, and includes the 20-3H Collier- Hogan Well. Production in the Sunniland Field dates back to the 1940's. 15. The concern is not with traditional oil extraction methods, but the introduction of modern production methods commonly referred to as "fr. _Ali B IT which is intended to fracture oil bearing rock. The concern arises out of the fact tl ,, I . ounty is located over a Karstic Aquifer system with non-contiguous porous co ng layers co "' tang mostly of sandstone, dolomite, and shell beds which are particularly lnerable to any pollution •urces. A number of utilities operate well fields in Collier County, inch} p 414i: rty of Naples. t ,dallier County Water Sewer District, the Immokale W a Sewer Dr Act, the City of Marco Island, and various private utilities. t� DISPUTED ISSUES OF MATE • ,FACT 16. Whether the JorkoverOperation included activities outside the scope of Permit No.: 1349H, Collier A`HQ,gan 20 3"11 Je11, IffeltAng 'ether the Respondent Hughes Company L.I ..n -k w engagediir he practice of h draulic:fracturing or "fracking." Section 62C-25.002(61), F.A.C., provides that FWorkover "shall mean an operation involving a deepening, plug back, repair, cement squeeze, perforation, hydraulic fracturing, acidizing, or other chemical treatment which is performed in a production, disposal, or injection well in order to restore, sustain, or increase production, disposal, or injection rates. (Emphasis added.). 17. Whether DEP and/or the Hughes Company are able to provide competent substantial evidence that the Workover Operation did not violate any applicable groundwater quality standard as suggested in the Consent Order Paragraph 16. 6 Packet Page-271- 5/13/2014 12.A. 18. Whether DEP and/or the Hughes Company are able to provide competent substantial evidence that the Workover Operation did not violate any groundwater standard in the nearby groundwater aquifer used as public and private water supply as suggested in the Consent Order Paragraph 19. 19. Whether in light of the relatively recent and quickly evolving fracking technology, the DEP has adopted sufficient and appropriate rules to e 'r t. at all precautions are taken to prevent the spillage of oil or any other pollutant in all , .a drilling for, and extraction of, oil, gas, or other petroleum products, as providedW and requi;e'cli Section 377.22(2)(a)-(y), Fla. Stat., Rules and Orders. 44 20. Whether the DEP acted thin the full e•• �,. ' tatutory duty to force the rules and orders as provided in Section 3774'a2< .. y), Fla. Stat Rules and Orders. 21. Whether the Hughes Companyyacted in trict co` ce with Section 62-30.005, ,s F.A.C., to drill in the g'Cypre iNatershe ,� a- r 22. Whether then tomes engaged in li the Hughes Company warrants the revocation of the Pe -i t.o n,lieu thereof,` amen m t of the Consent Order. a 23.. Whether D " o'ught t iave given Petitioners notice of the unapproved Workover a operation actes when firstfscovere ` DEP in December of 2013. x ULTIMATE FACTS AND SPECIFIC FACTS WARRANTING REVOCAT?ION OR MODIFICATION OF THE PERMIT OR, IN THE ALTERNATIVE,MODIFICATION OF THE CONSENT ORDER k 24. The Workover operation engaged in by the Hughes Company was not only outside the scope of the Permit (Permit No.: 1349H, Collier Hogan 20-3H Well), but the Hughes Company continued these activities despite notification by DEP that the workover operation was not approved. 7 Packet Page-272- 5/13/2014 12.A. 25. The Workover Operation violated applicable groundwater quality standards, as suggested by Consent Order Paragraph 16. 26. The Workover Operation violated groundwater standards in the nearby groundwater aquifer used as public and private water supply as suggested in Consent Order Paragraph 19. 27. DEP has not adopted sufficient and appropriate rules in response to the relatively recent and quickly evolving technology of fracking to ens ' r at all precautions are taken to prevent the spillage of oil or any other pollutant in all .. e drilling for, and extraction of, oil, gas, or other petroleum products, as provid r and requir=11 .' Section 377.22(2)(a)-(y), Fla. Stat., Rules and Orders. 28. DEP did not act within the full extent its s Cory duty to en'cue the rules and orders as provided in Section 377.22 (a)1 ),„Fla Stat., Rues and Orders. . 29. The Hughes empany failed;to act'iin zstrict corn-4., ce with Section 62-30.005, F.A.C., in drilling within°the Big qypress Watershed.. 30. The disregard by the 1i<Iughes Comp y of DEP's oral notification that the proposed Workover` >per on yeas not�app "ved w. k ets th revocation of the Permit, or in lieu thereof, an amendment of the Conse Urder nsistent with Petitioners' requests described below. 31. The;.DEP ought to have given Petitioners notice of the activities when first discovered by DEP in Decemhc o 2013. RULES AND S - TUTES ENTITLING PETITIONERS TO RELIEF 32. The following statutes and rules entitle Petitioners to relief: a. Chapter 377, Florida Statutes, including but not limited to Section 377.22(2) b. Chapter 403, Florida Statutes c. Chapters 62C-25 through 62C-30, Florida Administrative Code 8 Packet Page-273- 5/13/2014 12.A. d. Chapter 2003-353,Laws of Florida RELIEF REQUESTED WHEREFORE the Petitioners, Collier County and the District, respectfully request the following relief: (1) That the DEP accept this Petition for Administrative Hearing and refer this matter to the Division of Administrative Hearings for a Formal &th inistrative Hearing pursuant to Ar P. Sections 120.569 and 120.57; (2) In the alternative, in keeping with Sec •dn .. 0.573, F S;is„ t the parties mediate this dispute prior to DEP taking any forma .Von on this Petition; ;. ,,, (3) That Permit No 1349H, Colli r Hogan 20-3H°V ei i evoked, or in 1 Y�; lternative, that f, a the Consent Order be modified `'fo ws: a. Amend paragraph 11 o 'ei Corisen der t•--'3. gvide "...the Company shall rov e,to the Department ands.AG Coun ;the information in paragraphs 12- P � � ,, y 14 belo ,ei'b Amend paragrap a`I5 of the Consent Order to provide "...The ISPC Plan shall be ., submitted t'`the Department and Collier County within fourteen (14) days of the effective date of this Consent Order..." c. Amendt;paragraph !6 of the Consent Order to provide that Collier County will be given the requested information and analysis, and that DEP, in consultation with Collier County, directly retain the requested independent third-party experts at the Hughes Company's sole cost and expense to do the work described therein. d. Amend paragraph 17 of the Consent Order to include Collier County as a recipient and meaningful reviewer of the Report. 9 Packet Page -274- 5/13/2014 12.A. e. Amend paragraph 18 of the Consent Order that gives Collier County 30 days after receipt of the Report to consult with DEP prior to DEP providing written notice to the Hughes Company that it has satisfied the Report requirements. f. Amend paragraph 19 to include Collier County as a recipient of the Plan and require that the Plan be reviewed by independent third party experts retained by DEP in consultation with Collier County,to •" '■ by the Hughes Company. g. Include a new provision in the Consen � e= requires the Hughes Company to immediately notify Collier sr its design of any accident or incident (3:1toccurring at the well site. h. Include a new pros is on in the Cons n f I rd tl at requires the Hughes Company to post a one million do l tief d r for poten f A, lyean-up costs at the well site. .M (4) Grant any other rel eft hat this Age ly dee st and pro *ft '‘'7r�t ra Respectfully submitted this 2 `1 day of Aprils 2014. Respectfully submitted, BI` JEFFREY A. KLATZKOW, ESQ. - Florida Bar No. 0644625 tito COLLEEN M. GREENE, ESQ. Florida Bar No. 502650 Collier County Attorney's Office 3299 East Tamiami Trail, Suite 800 Naples, FL 34112-5749 Telephone: (239) 252-8400 Facsimile: (239) 774-0225 COUNSEL FOR PETITIONER j efflclatzkow@colliergov.net colleengreenena,co lliergov.net nancybradley @colliergov.net 10 Packet Page-275- 5/13/2014 12.A. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the Petition for Administrative Hearing has been furnished email upon: FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION, Mark Thomasson, P.E., Director, Division of Water Resource Management, mark.thomassonadep.state.fl.us; and via U.S. mail, postage p::■aid upon: DAN A. HUGHES COMPANY, L.P., J. Henry Kremers, Vice-President of , P.O. Drawer 669, Beeville, TX 78104; on this 25th day of April, 2014. rt kfl _. BY: FFREY • '1" ATZKOW, ESQ. jeffklatzk�o'`_ ,colliergov.net colleengreerie(a colliergov.net nancybradley@colliergov.net ° .„e -fir F.,;a; c... �n kQ lc- , 11 Packet Page-276- 5/13/2014 12.A. BEFORE THE STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION COLLIER COUNTY and COLLIER IN THE DIVISION OF COUNTY WATER-SEWER DISTRICT, WATER RESOURCE MANAGEMENT Petitioners, OGC File No.: 14-0012 v. FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION, and DAN A. HUGHES COMPANY, L.P., Respondents. Exhibit "A" COLLIER COUNTY'S PETITION FOR ADMINISTRATIVE HEARING Packet Page-277- 5/13/2014 12.A. BEFORE THE STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION STATE OF FLORIDA DEPARTMENT IN THE DIVISION OF OF ENVIRONMENTAL PROTECTION WATER RESOURCE MANAGEMENT OGC FILE NO. 14-0012 vs. DAN A. HUGHES COMPANY,L.P. CONSENT ORDER This Consent Order("Order")is entered into between the State of Florida Department of Environmental Protection,("Department")and the Dan A.Hughes Company,L.P.("Company"), to reach settlement of certain matters at issue between the Department and the Company. • 1. The Department is the administrative agency of the State of Florida having the power and duty to protect Florida's air and water resources and to administer and enforce the provisions of Chapters 377 and 403,Florida Statutes("F. S."),and Chapters 62C-25 through 62C-30,Florida Administrative Code("F.A.C."). The Department has jurisdiction over the matters addressed in this Order. 2. The Company is a`person"within the meaning of Section 403.161 and 403.031(5),F.S. 3. The Company obtained an Oil&Gas Well Drilling Permit from the Department in December of 2012(Permit No: 1349H,Collier-Hogan 20-3H Well)to construct a well to be located at the Hogan Island Farm in Collier County,Florida. 4. Upon completion of the construction of the 20-3H Collier-Hogan Well("Well"), the Company obtained a Five Year Operation Permit in August of 2013 to operate the Well as an oil production well. Exhibit "A" Collier County's Petition for Administrative Hearing f _ Packet Page-278- 5/13/2014 12.A. 5. On December 23,2013,the Company submitted to the Department a Workover Notification indicating that it intended to conduct a"Workover Operation"as described in Exhibit 1 attached hereto. This notice stated that the Company planned to commence the Workover Operation on December 28 or 29. Subsequently,at the request of the Department,the Company agreed to delay the Workover Operation until at least December 30 to allow the Department more time to review and respond to the notice. 6. The Workover Operation proposed by the Company began on December 30, 2013,and continued through January 1,2014. 7. On December 31,2013,the Department entered a Final Order Requiring •Operations at Well 20-3H Cease and Desist and served a copy of the Final Order on the Company on December 31,2013. A copy of the Final Order is attached hereto as Exhibit 2. 8. The Company continued the Workover Operations until approximately 2:30 PM on the afternoon of January 1,2014. 9. The Company contends that at all times it was operating lawfully under a valid permit and followed all applicable procedures required to conduct the Workover Operations described in Exhibit 1. Having reached resolution of the matter,the Department and the Company mutually agree and it is, ORDERED: • 10. Within 10 days of the effective date of this Order,the Company shall pay the Department$25,000 in settlement of the regulatory matters addressed in this Order. This amount includes$20,000 for civil payments and$5,000 for costs incurred by the Department during the investigation of this matter and the preparation and tracking of this Order. Packet Pare -279- 5/13/2014 12.A. WELL SAFETY 11. Immediately upon execution of this Order or upon becoming available to the Company(whichever is later), the Company shall provide to the Department the information in paragraphs 12-14 below. 12. The Company shall provide Material Safety Data Sheets(MSDS)for all materials used in the Workover Operation described in Exhibit 1 attached hereto,along with the proportion and total volume of each material used in the Workover Operation. 13. The Company shall identify the total volume of water used in the Workover Operation,and the source of the water,including the permit number if the water was obtained from a permitted source and confirmation that the volume of water used for the Workover Operation does not exceed any limitation set in the permit. 14. The Company shall provide the following information concerning the flowback material management for the Well operations: (a) estimate of the total volume of flowback material; (b)storage capacity at the pad to contain any flowback material that is anticipated to be held onsite;(c) description of the secondary containment measures employed at the site; (d)the final disposal location for the flowback material resulting from the Workover Operation;and(e) and confirmation, of the regulatory conditions on final disposal,including the permitting agency and pncLzidt nuniber(s). 15. The Company shall submit an Interim Spill Prevention and Cleanup Plan("ISPC Plan") to be implemented at the Well. The ISPC Plan shall be submitted to the Dep€hnent within fourteen(14)days of the effective date of this Consent Order. If the Department requests additional information or notifies the Company that the ISPC Plan is inadequate or otherwise unacceptable,the Company shall provide the additional information or submit a revised ISPC Packet Page-280- 5/13/2014 12.A.- Plan within the time frame,not less than fourteen(14)days,specified by the Department in the request or notification. Implementation of the Department approved ISPC Plan constitutes satisfaction of this requirement. • ANALYSIS AND MANAGEMENT 14. The Company shall provide information and analysis to confirm that this Workover Operation was designed and carried out in a way that it is not likely to cause or contribute to any violation of any applicable groundwater quality standard. The Company,at its sole expense,shill retain independent third-party experts with the appropriate qualifications to assess the likelihood that the Workover Operation will cause or contribute to a violation of any • applicable groundwater quality standards. This analysis shall consider at a minimum,the potential for injected or native fluids to migrate through the deep geological formations or the • Well casing into surrounding groundwater bearing zones with total dissolved solids concentrations of 10,000 ppm or less. The Department and the Company shall make a good faith effort to reach mutual agreement on the selection of the third party experts and the"Scope of Work"to be performed by the experts within 60 days of the effective date of this Order. Neither the Department nor the Company shall unreasonably withhold their approval of the experts or the Scope of Work for the analysis. The Scope of Work will be limited to analyses reasonably necessary to evaluate the likelihood that Workover Operations similar to the Workover Operations described in Exhibit 1 will cause or contribute to any violations of any applicable • groundwater quality standards. The experts shall prepare a Report and submit the Report to the Department by December 1,2014. 17. Upon receipt of the Report,the Department shall review the Report and in a timely manner determine whether it provides sufficient information to evaluate the Iikelihood • Packet Page-281- 5/13/2014 12.A. • that Workover Operations similar to the Workover Operations described in Exhibit 1 will cause or contribute to any violations of any applicable groundwater quality standards. To this end, within 30 days of the receipt of the Report the Department shall notify the Company and the Report author of any apparent errors or omissions and request any additional information needed to evaluate the likelihood groundwater standard violations would result from similar Workover Operations.The Company shall provide the additional information reasonably requested by the Department within 30 days of receipt of the Department's request. If at any time before the study is accepted by the Department anyone files a Workover notice for a Workover Operation similar to the Workover Operation described in Exhibit 1,the Department will respond to such notice with a request for information similar to the Scope of Work for the Report. 18. .No future Workover Operations similar to the Workover Operation described in Exhibit 1 shall be implemented at any of the Company's wells(existing and proposed under valid permits)until the completion and submittal of the Report described in paragraph 16. The Department agrees to provide written notice to the Company when it has satisfied the Report requirements of this Consent Order. 19. Within 30 days of the effective date of this Order,the Company shall submit a groundwater monitoring plan("Plan")to the Department. The objective of the Plan is to provide • information regarding the likelihood that the Workover Operation will cause or contribute to any violation of any groundwater standard in the nearby groundwater aquifer used as public and private water supply. The Plan shall be developed and implemented at the expense of the Company. The Plan shall include:(a)a one-time analytical sampling of the flowback material prior to its final disposal. In addition to the analysis identified in Exhibit 3,the one-time analytical sampling of the flowback material shall be conducted using the following analytical Packet Page-282- 5/13/2014 12.A. methods: EPA Method 350.1—total ammonia,EPA Method 8260 with required reporting of all target anaiytes and tentatively identified compounds having greater than 10%relative abundance, EPA Method 8270 with required reporting of all target analyses and tentatively identified compounds having greater than 10%relative abundance,EPA Method 8015C with all alcohols and glycols using the heated purge option cited in Section 11.1.2,FL PRO(State of Florida petroleum range organics),MA VPH(State of Massachusetts volatile petroleum hydrocarbons), Standard Methods 2504B—total dissolved solids,and Standard Methods 4500-CL F(listed as residual chlorine but measures total residual oxidants); ; (b)installation of a series of shallow monitoring wells,placed at the NW,NE,SW,SE comets of the pad. The wells shall be designed to test the full column of the potable water zone;(c)installation of one deep groundwater monitoring well on the pad and southwest of the subject well to a depth equal to the base of the sandstone aquifer(approximately 400');(d)ground water quality sampling and analyses of all wells;;(e)sampling and analyses of all monitoring wells on a quarterly basis for • either ten(10) years from the date upon which the Department approves the groundwater monitoring plan or for five(S)years after plug and abandonment of the Well,which ever monitoring period shall expire first;(f)an inventory of freshwater supply wells within a quarter mile of the well bore hole;and(g)a schedule for implementing the Plan. 20. If the Department requests additional information or notifies the Company that the Plan is inadequate or otherwise unacceptable,the Company shall provide the additional information or submit a revised Plan within the time frame specified by the Department in the request or notification. Within 30 days of notification from the Department that the Plan is acceptable, the Company shall begin implementing the Plan. Packet Page-283- 5/13/2014 12.A. SETTLEMENT OF ALL DISPUTES 21. The terms of this Consent Order,upon execution,shall supersede the requirements of the Final Order Requiring Operations at Well 20-3H Cease and Desist. • 22. This Consent Order is in settlement of all disputes between the Company and the • Department regarding the Permit No. 1349H,20-30H Collier-Hogan Well. The Department and the Company agree to actin good faith and to cooperate fully with each other in carrying out the intent of this Consent Order,and all matters related thereto,and for that purpose agree to execute any additional documents or take such action as may prove reasonably necessary to accomplish that intent, CONFIDENTIALITY 23. If any of the information submitted by the Company in response to the requirements of this Order is considered a trade secret or is otherwise confidential information in accordance with Chapter 377 or Section 403.111,F.S.,the Company shall request upon submittal of the information that the Department keep such information confidential. The Department will thereafter keep such information confidential in accordance with the requirements of Chapter 377 and Section 403.111,F.S. ORDER ADMINISTRATION 24. The Company acknowledges and waives its right to an administrative hearing pursuant to Sections 120.569 and 120.57,F.S.,on the terms of this Order. The Company acknowledges its right to appeal the terms of this Order pursuant to Section 120.68,F.S.,and waives that right upon signing this Order. 25. If any event,including administrative or judicial challenges by third parties unrelated to the Company,occurs which causes delay or the reasonable likelihood of delay,in Packet Page -284- 5/13/2014 12.A. complying with the requirements of this Consent Order,the Company shall have the burden of •proving the delay was or will be caused by circumstances beyond the reasonable control of the Company and could not have been or cannot be overcome by the Company's due diligence. The failure of a contractor,subcontractor,materialman or other agent(collectively referred to as "contractor")to whom responsibility for performance is delegated to meet contractually imposed deadlines shall not be a cause beyond the control of the Company,unless the cause of the contractor's late performance was also beyond the contractor's control. Upon occurrence of an event causing delay,or upon becoming aware of a potential for delay,the Company shall notify the Department orally within 24 hours or by the next working day and shall,within seven calendar days of oral notification to the Department,notify the Department in writing of the anticipated length and cause of the delay,the measures taken or to be taken to prevent or minimize the delay and the timetable by which the Company intends to implement these measures. If the parties can agree that the delay or anticipated delay has been or will be caused by circumstances beyond the reasonable control of the Company,the time for performance hereunder shall be extended for a period equal to the agreed delay resulting from such circumstances. Such agreement shall adopt all reasonable measures necessary to avoid or minimize delay. Failure of the Company to comply with the notice requirements of this paragraph in a timely manner shall constitute a waiver of the Company's right to request an extension of time for compliance with the requirements of this Consent Order. 26. Entry of this Consent Order does not relieve the Company of the need to comply with applicable federal,state or local laws,regulations or ordinances. 27. The terms and conditions set forth in this Consent Order may only be enforced in a court of competent jurisdiction pursuant to Sections 120.69 and 403.121,F.S. Failure to Packet Page-285- _ 5/13/2014 12.A. • comply with the terms of this Consent Order shall constitute a violation of Section 403.161.(1)(b),F.S. 28. All submittals and payments required by this Consent Order to be submitted to the Department shall be sent to the Program Administrator of the Oil&Gas Program,Division of Water Resource Management,Florida Department of Environmental Protection,2600 Blair Stone Road,MS 3588,Tallahassee,FL 32399. 29. The Department hereby expressly reserves the right to initiate appropriate legal action to prevent or prohibit any violations of applicable statutes or the rules promulgated there- under that are not specifically addressed by the terms of this Consent Order. 30. This Consent Order is a settlement of the Department's civil and administrative authority arising under Florida law to resolve the matters addressed herein.This Order is not a settlement of any criminal liabilities which may arise under Florida law,nor is it a settlement of any violation which may be prosecuted criminally or civilly under federal law. 31. Electronic signatures or other versions of the parties' signatures,such as pdf or facsimile,shall be valid and have the same force and effect as originals. No modifications of the terms of this Order shall be effective until reduced to writing,executed by both Respondents and the Department, and filed with the clerk of the Department. NOTICE OF RIGHTS 32. This Consent Order is a final order of the Department pursuant to Section • 120.52(7),F.S.,and it is final and effective on the date filed with the Clerk of the Department unless a Petition for Administrative Hearing is filed in accordance with Chapter 120,F.S. Upon the timely filing of a petition,this Order will not be effective until further order of the Department. Packet Page-286- 5/13/2014 12.A. 33. Persons who are not parties to this Order,but w se substantial interests are affected by it,have a right to petition for administrative hearing er Sections 120.569 and 120.57,F.S. Because the administrative hearing process is designed to formulate final agency action,the filing of a petition concerning this Order means that the Department's final action may be different from the position it has taken in the Order. The petition for administrative hearing must contain all of the following information: • a) The OGC Number assigned to this Order; b) The name,address,and telephone number of each petitioner,the name,address,and telephone number of the petitioner's representative,if any,which shall be the address for service purposes during the course of the proceeding; c) An explanation of how the petitioner's substantial interests will be affected by the Order; d) A statement of when and how the petitioner received notice of the Order; e) Either a statement of all material facts disputed by the petitioner or a statement that the petitioner does not dispute any material facts; f) A statement of the specific facts the petitioner contends warrant reversal or modification of the Order; . g) A statement of the rules or statutes the petitioner contends require reversal or • modification of the Order;and h) A statement of the relief sought by the petitioner,stating precisely the action petitioner wishes the Department to take with respect to the Order. The petition must be filed(received)at the Department's Office of General Counsel,3900 Commonwealth Boulevard,MS 35,Tallahassee,Florida 32399-3000 within 21 days of receipt of . Packet Page-287- 5/13/2014 12.A. this notice. Failure to file a petition within the 21-day period constitutes a person's waiver of the right to request an administrative hearing and to participate as a patty to this proceeding under Sections 120.569 and 120.57, F. S. Before the deadline for fling a petition,a person whose substantial interests are affected by this Order may choose to pursue mediation as an alternative remedy under Section 120.573, F.S. Choosing mediation will not adversely affect such person's right to request an administrative hearing if mediation does not result in a settlement. Additional information about mediation is provided in Section 120.573,Florida Statutes and Rule 62- 110.106(12), F.A.C. FOR THE COMPANY: DAN A.HUGHES COMPANY, L.P. By:Dan A.Hughes Management,L.L.C. Its general partner A_pAA_11, g014 Oaf, . DATE " mcrs, 1V• ice President of E.and P.O. prawer 669.Beevil le.Tcxas 78104 04 ADDRESS • DONE AND ORDERED this 8th day of April ,2014,in Tallahassee Florida. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION Mark Thomasson P.E. Director, Division of Water Resource Management Packet Page -288- 5/13/2014 12.A. • Filed,on this date,pursuant to Section 120.52,Fla.Stat,with the designated Department Clerk, receipt of which is hereby acknowledged. Clerk Date Copies furnished to: Lea Crandall,Agency Clerk Mail Station 35 • • dor Packet Page-289- 5/13/2014 12.A. EXHIBIT I This exhibit is protected as a confidential trade secret under section 815.045,Florida Statutes, • and has been submitted separately. • • • • Packet Page-290- 5/13/2014 12.A. EXHIBIT 2 Packet Page -291- 5/13/2014 12.A. BEFORE THE STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION COLLIER COUNTY and COLLIER IN THE DIVISION OF COUNTY WATER-SEWER DISTRICT, WATER RESOURCE MANAGEMENT Petitioners, OGC File No.: 14-0012 v. FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION, and DAN A. HUGHES COMPANY, L.P., Respondents. Composite Exhibit "B" COLLIER COUNTY'S PETITION FOR ADMINISTRATIVE HEARING • Packet Page -292- 5/13/2014 12.A. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION PERMITTEE: PERMIT No: 1349H I PA No: 315034-001 Dan A.Hughes Company,L.P. WELL: 20-3H Collier Hogan 208 E. Houston SECURITY: Single Bond No.RLB0014778 Beeville,TX 78102 PROJECT:Collier County Wildcat Well FINAL ORDER OIL&GAS WELL DRILLING PERMIT FINDINGS OF FACT: Dan A. Hughes Company, LP., filed a complete application on November 8, 2012, with the Florida Department of Environmental Protection (the Department) to drill the 20-3H Collier-Hogan well in Collier County, Florida. The proposed exploratory well will be drilled within a non-routine drilling unit in accordance with Rule 62C-26.004(6) Florida Administrative Code (F.A.C.). All of the mineral ownership of the 428-acre drilling unit has been leased by the applicant The permittee has provided all documentation required under Chapters 62C-25 through 62C-30, F.A.C. The application was reviewed and deemed consistent with requirements of Sections 377.241, 377.242, and 377.243, Florida Statutes (FS.), and implementing Chapters 62C-25 through 62C-30,F.A.C. This permit authorizes the Dan A.Hughes Company,LP.,to drill a horizontal completion targeting the Lower Sunniland Formation. The surface hole location (SHL) is 2,116 feet from the south line and 3,315 feet from the east line of Section 20, Township 47 South, Range 28 East in Collier County. The proposed bottom hole location(PBHL)will be 1,342 feet from the south line and 2,003 feet from the west line of Section 21,Township 47 South, Range 28 East. A new drilling pad will be constructed in a tomato field at the Hogan Island Farm that is owned by the Barron Collier Company. The well site will be located within the Big Cypress Swamp watershed,but there will be no wetlands impacts. The procedure calls for the operator to drill a pilot hole to a total vertical depth (TVD) of 13,500 feet [13,500 feet measured depth (MD)], to evaluate the geology. If the permittee chooses to continue drilling operations, the bottom of the pilot hole will be plugged back with cement and then kicked off at 11,187 feet TVD (11,187 feet MD)to directional drill a 8 1/2 inch hole with a steerable assembly while building angle. After reaching 11,836 feet TVD (12,000 ft MD) 7 5/8 inch casing will be set in the hole and cemented it in place. After setting casing the procedure calls for drilling a 61/2 inch open hole until obtaining an inclination angle of 90 degrees at the landing point at a depth of 11,903 TVD (12,312 feet MD). At this depth the well will be completed drilling horizontally 4,588 feet to the proposed bottom hole location at 11,903 TVD (16,900 MD)in the targeted pay zone of the Lower Surmiland Formation. Composite Exhibit "B" Collier County's Petition for Administrative Hearing Packet Page-293- 5/13/2014 12.A. Dan A.Hughes Company,L.P. FDEP Drilling Permit No.1349H Page 2 of 7 Access to the proposed drilling site will utilize existing private farm roads whose only improvements will consist of surface hardening to accommodate vehide traffic. No new utilities will be brought into the site. The site plan includes a two-foot earthen berm constructed around the perimeter of a newly built drilling pad. A secondary containment area within the perimeter of the site will be covered by high-density polyethylene to contain and collect any minor accidental spills from drilling operations and to prevent storm water runoff from leaving the site. There will be no earthen mud pits. Drilling mud and well fluids will circulate through a dosed system of portable steel tanks and plumbing lines. The operator has applied for a water use permit from the South Florida Water Management District The permit will allow Hughes to withdraw fresh water from onsite wells for milling, drilling, and cementing operations. The application includes an H2S contingency plan,with predefined responses in the event of an accidental gas release. The plan calls for coordination with other governmental agencies in the unlikely event of an emergency. Safety equipment including blowout preventers will be installed and routinely tested during drilling operations. The wellhead and flow lines are required to be maintained, monitored, and tested by the operator's personneL Best industry practices will be incorporated into the operator's daily work routine with compliance monitored by inspectors from the Department's Ft Myers Oil and Gas Office. CONCLUSION OF LAW: This application as approved complies with the standards and criteria of Chapter 377,Part L F.S.,and Chapters 62C-25 through 62C-30,F.A.C. GENERAL PERMIT CONDITIONS 1. This drilling permit expires one year from the issuance date. If drilling has not begun within that time then, upon written request by the permittee, the Department shall extend the permit for an additional year. In accordance with Rule 62C-26.003(2), F.A.C.,subsequent requests for extensions shall be treated as new applications. 2. This permit authorizes drilling within the state of Florida as designated on the attached location plat prepared by Pickett&Associates,Inc.,dated November 21,2012. 3. Issuance of this permit does not relieve the permittee of the responsibility to comply with all applicable federal, state, county, municipal, and special district laws, ordinances and rules, nor is the permittee relieved of the responsibility to obtain any licenses or permits which may be required by federal, state, county, municipal, or special district laws. Packet Page-294- 5/13/2014 12.A. Dan A.Hughes Company,L.P. FDEP Drilling Permit No.1349H Page 3 of 7 4. By accepting this permit, the permittee agrees to conduct all operations in accordance with this permit and the application upon which it is based, Chapter 377, F.S., and Chapters 62C-25 through 62C-30,F.A.C. 5. The permittee shall notify the Ft. Myers Oil and Gas Field Office at(239) 344-5721 not less than twenty-four hours prior to starting work and thereafter as directed. 6. The permittee shall file Form 8 (Well Record)within 30 days after reaching total depth, Form 9 (Well Completion Report) within 30 days after testing the well, a directional survey within 30 days after logging the well,and Form 16 (Plugging Report)within 30 days after plugging the well. Geophysical well logs, mud logs, samples, core chips, laboratory core analysis reports, etc., must be submitted to the Oil and Gas Section within 30 days after reaching total depth. 7. Any violation of these permit conditions may result in the suspension or revocation of this permit pursuant to Section 120.60, F.S., or may result in penalties, pursuant to Sections 379.407,377.37,and 403.121,F.S. 8. The additional data derived from this well shall be used to refine existing prospect interpretations and shall provide the basis for determining whether additional field wells,special field rules,or field unitization will be necessary. 9. If additional wells are necessary before adopting special field rules or unitizing the field, commercial production from this well may be governed by allowables to be set by the Department or the distributable royalty interest shall be escrowed until such rules are adopted or unitization proceedings, as outlined in Section 377.28(4), F.S., are completed. 10. If unitization is required pursuant to Section 377.28, F.S., to prevent waste and protect the coequal and correlative rights of all potentially impacted parties, the operator shall begin unitization proceedings within 60 days after testing is completed, in which case commercial production may be restricted or distributable interests escrowed until a unitization package is approved by the Department This drilling unit shall be included within the field limits. Any additional areas subsequently included within the field shall be defined on the basis of not less than quarter-quarter-quarter sections (square blocks of approximately 10 acres) and shall include all blocks below which the oil pool is projected. 11.During the period between well testing and adoption of special field rules or field unitization in accordance with Section 377.28, F.S., the operator shall be allowed to produce the well but shall escrow all undistributed mineral interests' funds for the • Packet Page -295- 5/13/2014 12.A. Dan A.Hughes Company,L.P. FDEP Drilling Permit No.1349H Page 4 of 7 benefit of any unpaid royalty owners or yet to be determined royalty owners in the case of unitization. SPECIFIC PERMIT CONDITIONS 1. A directional survey shall be run from at least the surface casing shoe to total depth and shall be filed with the administrator within 30 days after logging pursuant to Rule 62C-26.004(5)(e),F.A.C. 2. If the well is successful and it is configured for production, a modified survey plat based on the directional survey must be submitted prior to issuance of the operating permit. 3. If produced test fluids will be removed from the site by transporter(s)not authorized by the Form 14 on file with the Department for this well, a modified Form 14 designating the transporter(s)must be submitted to the Department prior to removing those test fluids. RIGHTS OF AFFECTED PARTIES A person whose substantial interests are affected by the Department's action may petition for an administrative proceeding (hearing) under Sections 120.569 and 120.57, F.S. The petition must contain the information set forth below and must be filed (received by the clerk) in the Office of General Counsel of the Department at 3900 Commonwealth Boulevard,Mail Station 35,Tallahassee,Florida 32399-3000. Under Rule 62-110.106(4), F.A.C., a person whose substantial interests are affected by the Department's action may also request an extension of time to file a petition for an administrative hearing. The Department may, for good cause shown, grant the request for an extension of time. Requests for extension of time must be filed with the Office of General Counsel of the Department at 3900 Commonwealth Boulevard,Mail Station 35, Tallahassee, Florida 32399-3000, before the applicable deadline. A timely request for extension of time shall toll the running of the time period for filing a petition until the request is acted upon. If a request is filed late, the Department may still grant it upon a motion by the requesting party showing that the failure to file a request for an extension of time before the deadline was the result of excusable neglect. If a timely and sufficient petition for an administrative hearing is filed, other persons whose substantial interests will be affected by the outcome of the administrative process have the right to petition to intervene in the proceeding. Intervention will be Packet Page -296- 5/13/2014 12.A. Dan A.Hughes Company,L.P. FDEP Drilling Permit No.1349H Page 5 of 7 permitted only at the discretion of the presiding officer upon the filing of a motion in compliance with Rule 28-106.205,F.A.C. In accordance with Rule 62-110.106(3),F.A.C.,petitions for an administrative hearing by the applicant must be filed within 21 days of receipt of this written notice.Petitions filed by any persons other than the applicant, and other than those entitled to written notice under Section 120.60(3),F.S.,must be filed within 21 days of publication of the notice or. within 21 days of receipt of the written notice, whichever occurs first. Under Section 120.60(3), F.S.,however,any person who has asked the Department for notice of agency action may file a petition within 21 days of receipt of such notice,regardless of the date of publication. The petitioner shall mail a copy of the petition to the applicant at the address indicated above at the time of filing. The failure of any person to file a petition for an administrative hearing within the appropriate time period shall constitute a waiver of that person's right to request an administrative determination (hearing) under Sections 120.569 and 120.57,F.S. A petition that disputes the material fads, on which the Department's action is based, must contain the following information: (a) The name and address of each agency affected and each agency's file or identification number,if known; (b) The name, address, and telephone number of the petitioner; the name, address, and telephone number of the petitioner's representative, if any, which shall be the address for service purposes during the course of the proceeding;and an explanation of how the petitioner's substantial interests are or will be affected by the agency determination; (c) A statement of when and how the petitioner received notice of the agency decision; (d) A statement of all disputed issues of material fact. If there are none, the petition must so indicate; (e) A concise statement of the ultimate facts alleged, including the facts that the petitioner contends warrant reversal or modification of the agency's proposed action; (1) A statement of the specific rules or statutes that the petitioner contends require reversal or modification of the agency's proposed action, including an explanation of how the alleged facts relate to the specific rules or statutes;and (g) A statement of the relief sought by the petitioner,stating precisely the action that the petitioner wishes the agency to take with respect to the agency's proposed action. Packet Page-297- 5/13/2014 12.A. Dan A.Hughes Company,L.P. FDEP Drilling Permit No. 1349H Page 6 of 7 Under Sections 120.569(2)(c) and (d),P.S., a petition for administrative hearing must be dismissed by the agency if the petition does not substantially comply with the above requirements or is untimely filed. This permit constitutes an order of the Department. Subject to the provisions of Section 120.68(7)(a), F.S., which may require a remand for an administrative hearing, the applicant has the right to seek judicial review of the order under Section 120.68,F.S.,by the filing of a notice of appeal under Rule 9.110 of the Florida Rules of Appellate Procedure with the Clerk of the Department in the Office of General Counsel, 3900 Commonwealth Boulevard, Mail Station 35, Tallahassee, Florida 32399-3000; and by filing a copy of the notice of appeal accompanied by the applicable filing fees with the appropriate district court of appeal. The notice of appeal must be filed within 30 days from the date when the order is filed with the Clerk of the Department. The files associated with this order are available for public inspection during normal business hours, 8:00 a.m. to 5:00 p.m., Monday through Friday, except legal holidays,at the Department of Environmental Protection, 2051 East Paul Dirac Drive, Tallahassee, Florida 32310-3760. Packet Page-298- • 5/13/2014 12.A. Dan A.Hughes Company,L.P. FDEP Drilling Permit No.1349H Page 7 of 7 Executed in Tallahassee,Florida. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION Danielle Fondren,PWS,Deputy Director Division of Water Resource Management Department of Environmental Protection CERTIFICATE OF SERVICE The undersigned duly designated deputy clerk hereby certifies that this final order was mailed before the dose of business on J).re,.446u 18,2012,to the above listed persons. FILING AND ACKNOWLEDGMENT FILED, on this date,pursuant to Section 120.52(7),F.S., with the designated Deputy Department Clerk,receipt of which is hereby acknowledged. 1tyCler 'k 1 Date Prepared by: SS/EG. 2 page(s)attached. Attachment(s): 1, Survey Plat,2-3H Collier-Hogan,Pickett&Associates,Inc.,revision date November 21,2012. 2. Form 3,Application for Permit to Drill, dated November 21,2012. Packet Page -299- , 5/13/2014 12.A. I Sealed original C±OLLI ER-HOGAN g Drawing on File Oil Well Permit#1349 I. COLLIER-HOGAN 20-3H .\ < ,, 18 17 _ • — , _._ • . .._ . — . ___ 17 16 _ _ , _ •19 20 T 20121`21 Legend: T• FSL—From South Section Line I I FEL—From East Section Line WELL HEADS & PERMIT • e'? NUMBER PROVIDED BY FLORIDA WELL #20-3H SECTION 20, ,� Q DEPARTMENT OF ITOWNSHIP 47 SOUTH,RANGE 1 SURFACE HOLE LOCATION 20 EAST ENVIRONMENTAL PROTECTION LAT. 26'2270.102" N COLLIER COUNTY,FLORIDA NO 74. 6.32'17.oss• w DISTANCES ARE IN FEET. N 741361.82 I I E 479083.05 GROUND ELEVATION 1 DRIWNG UNIT BOUNDARY NA VD 88=20.6' cc . NGVD 2920.9' ¢ • 2,116 feet FSL = DRILLING UNIT BOUNDARY 1 3,315 feet FEL O_ __ . __ . -- — -- to BOTTOM HOLE LOCATION • z • .I LAT. 2672'12.953"N I LONG. 8131'18.507' W ;!}%C' N 740517.99 z • 4 I E 484408.74 __ 1,342 feet ESL CI • E WELL 120-3H '/ 2,003 feet FWL PENETRATION POINT INTO , I RUBBLE LA T. 2672'19,557 N 1 rl z LONG. 8132'22.586" W PERMIT 086 V, N 741304.56 z I I E 479493.04 SECTION 21, 7 2,054 feet FSL TOWNSHIP 47 SOUTH,RANGE z 2.9P4 feet FEL ¢ DRILLING UNIT BOUNDARY 25 EAST c2 COLUER COUNTY,FLORIDA 19 4 20 —_ T -_ 20 21 DRILLING UNIT BOUNDARY . IMMOKALEE ROAD 29 28 30 29 =— STATE ROAD 845 Anor "OM. AI ar 7 NI NII SURVEYOR's NOTES: ,;� , , AM INI. AMIN UMW 1. This is a specific purpose survey prepared to Illustrate proposed well locquA,• , 2. North and the coordinate values shown hereon ore referenced to the Fm t Zone of the FiorldOitote "ow sew Plane Coordinate System, NAD 83. Vertical values ore NAVD 88, the NC 29 efe blf* were converted • •NORTH from NAVD 88 using Corpscon. Units ore In U.S. Survey feet. 3. The east and south lines of Section 20 are based upon o field survey of 4 e4rig minu iragation. The remainder of the Section Is based upon Information obtained from:Collier County and is shown for 0 600• 1 1200 information only. THIS IS NOT A BOUNDARY SURVEY. V4 4. Distances are in U.S. Survey Feet. Rt'(" .I\ tj ( IN FEET ) / j' I� i1 1 inch = 1200 ft. �(-- 0-111------- f0/41$ I •HN M. CLYATT, P.S.M. REGISTRATION No. 4092 DATE GRAPHIC & INTENDED DISPLAY SCALE %ICKETT&ASSOCIA TES I FL. REGISTRATION No. LB 364 SPECIFIC PURPOSE SURVEY .. �� ___ LOCATED IN SECTIONS 20 & 21, pICKETT `e.°w �° TOWNSHIP 47 SOUTH, RANGE 28 EAST F,.WTW e5 w06 PREPARED FOR: DAN A. HUGHES COMPANY, L.P. ' 4 SURVEYING&PHOTOGRAMMETRY PROJECT: COLLIER—HOGAN PCKETT&ASSOCIATES,INC. Project No.; 16925 No. Dote Approved REVISION NOT VALID WITHOUT Horiz. Scale: 1" = 1200' OR 11/05/12 JMC Original Release THE SIGNATURE AND THE ORIGINAL RAISED DWG. Name: 269's-PrR"'r_2o-3N 1 11/21/12 JMC Add Drilling Unit Boundary SEAL OF A FLORIDA UCENSED SURVEYOR Drawn By. GBA AND MAPPER, Field Bk /Pg.: 801 Drawing 0' S03138\ Packet Page-300- 5/13/2014 12.A. • P MDA DEPARTMENT OF ENVIRONMENTAL PROTECT ) APPUCATION FOR PERMIT TO DRILL Form 3 Rule 62C-25.008,-25008, -25.003 and-25.001 For information and fees regarding drilling permits for oil and gas related wells,refer to Chapter 62C-28,Florida Administrative Code. File this form with the Chief,Florida Geological Survey,903 West Tennessee Street,Tallahassee,Florida 32304-7700 (phone numbers 850/487-2219 and 488-4191;fax 850/488-8088). Dan A. Hughes Company, L.P. (� (Company,Name and Address) 208 E. Houston \s) Beeville, Texas 78102 7,"") Phone Number: (B61) 358-3752 Fax Number: (361) 362-2839 Well Name and Number: Collier - Hogan 20-3H ( .vmtl- 1\10. 1549 N> Ground Elevation:20.6' NAVD88 Acres Assigned to Wet: 428 Latitude: 26 22'20"Longitude: 81 32'27" SHL: N741361.82 E479083.05 . Sec. 20 T. 47S 8.2,8E BHL: N740617.99 Fb844fR 74 Sea 91 T. 47S R.7RF Reid/Area: Wildcat Field County: Collier Distance to nearest drThng unit boundary: 72$ ` Proposed Depth:],6,900'!D (11,903'TVD) Do you have all of the mineral interest in the drilling unit under lease or title? Yes (Yes or No) if not,attach lease map showing ownership of all mineral acreage within the drilling unit end 1st the names and addresses of all nonconsenting mineral owners. (See section 377.2411 and.247,Florida Statutes.) (Please answer YES or NO) Is the structure intended for the drilling or production of this well located(See section 377.24,F.S.) a) In a municipality? No b) In tidal waters within 3 miles of a municipality? No c) on an improved beach? No • d) on any submerged land within a bay,estuary,or offshore waters? No a) within one mile seaward of the coastline of the state? No f)within one mile seaward of the boundary of a local,state or federal park or an aquatic or wildlife preserve? No g) On the surface of a freshwater lake,river or stream? No h) within one mile Inland from the shoreline of the Gulf of Mexico,the Atlantic Ocean or any bay or estuary? No i) within one mile of any freshwater lake,river or stream? NO if the answer to a,b,or c is YES,attach copies of local governing authorities'permits. if the answer to h or I is YES,attach a contingency plan specifying safeguards being implemented to prevent accidents and/or blowouts and to protect the natural resources of such bodies of water and shore areas in the event of an accident or blowout The security for this well is attached (attached or on file)with the Florida Geological Survey(see Rule 62C- 26.002) and bears Serial Number RL80014778 • Company's Statement State: TEXAS County: BEE J. Henry Erasers am the Chief Operatine ()ffi ethic-a Pr»s en — and (Name) (Tale) of Dan A. Hughes Company, L.P. and attest to all information contained herein to be true and correct (Organization) Signature: 1 Date: ?(.7tur.,,,Q...----!/.///e, A.1 OF FTr) File Number: Action: Date: A.P.I.Number: (Approved,Denied) DEP di-003(1 E) DEC 4 2012 Revised WM 7;*, ' RECEIVED t'RAILS W Packet Page -301- 5/13/2014 12.A. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION PERMI:1-1LE: Permit No: 1349H PA: 315034 Dan A. Hughes Company LP WELL: 20-3H Collier-Hogan 208 E. Houston/ Drawer 669 API No: 09-021-20211 Beeville,TX 78104 SECURITY: Bond No. RLB0014778 EXPIRATION DATE: August 6,2018 FINAL ORDER FIVE YEAR OPERATING PERMIT FINDINGS OF FACT: Dan A. Hughes Company LP filed an application for a permit to operate the 20-3H Collier-Hogan with the Depaitnient of Environmental Protection on August 5,2013. The surface hole is located 2,114 feet from the south line and 3,314 feet from the east line of Section 20, Township 47 South, and Range 28 East in Collier County, Florida. This well has been constructed as a production well having a total vertical depth of 11,903 feet below ground level. The application was reviewed and deemed consistent with requirements of Sections 377.241, 377.242, and 377.243, Florida Statutes (F.S.), and implementing Chapters 62C-25 through 62C-30, Florida Administrative Code (F.A.C.). The well site was inspected in accordance with Rule 62C-26.008(5),F.A.C. CONCLUSION OF LAW: This application as approved complies with the standards and criteria of Chapter 377,Part I, F.S.,and atapters 62C-25 through 62C-30,F.A.C. GENERAL PERMIT CONDITIONS 1. Issuance of this permit does not relieve the permittee of the responsibility to comply with all applicable federal, state, county,nor municipal, and special district laws, ordinances,ces, end rules s sor is the e perrnittee relieved of the responsibility to obtain any licenses or permits which may be required by federal, state, county, municipal, or special district laws. 2. By accepting this permit the applicant agrees to conduct all operations in accordance with Chapter 377, F.S.,and Chapters 62C-25 through 62C-30,F.A.C. 3. Pursuant to Rule 62C-26.008(2), F.A.C., this operating permit is valid for the life of the well, but must be recertified every five years. Application for recertification must be submitted no later than 90 days prior to the end of each 5-year permit term. 4. Pursuant to Rule 620-29.006(1), F.A.C., the permittee shall notify the Department's Oil and Gas Field Office in Ft. Myers at phone number 239.344.5721, or 239.344.5611, not Packet Page -302- 5/13/2014 12.A. Permit 1349H Page 2 of 5 less than twenty-four hours prior to starting workover operations, and shall report emergencies as soon as possible. 5. A spill prevention and clean-up plan(SPCP)designed to prevent spills of crude oil and • associated fluids and to expeditiously remove these fluids from the environment should a spill occur will be on file with the Department. Pursuant to Rules 62C- 26.008(3)(d) and 28.004(2), F.A.C., the permittee shall keep these plans current and readily available for use onsite as needed in accordance with the plan. 6. Pursuant to Rule 62C-29.009, F.A.C., the permittee shall obtain Department approval prior to commencing plugging and abandonment procedures. 7. Any violation of these permit conditions may result in the suspension or revocation of this permit pursuant to Section 120.60, F.S., or may result in penalties pursuant to Sections 379.407 and 377.37,F.S. SPECIFIC PERMIT CONDITIONS 1. Pursuant to Rule 62C-26.008(2), F.A.C., this operating permit shall be valid for the life of the well. However, the well and permit must be re-certified every five years. The 5-year operating permit term authorized by this order shall be effective beginning August 7.2(.113;and will expire on August 6,2018. RIGHTS OF AFFECTED PARTIES A person whose substantial interests are affected by the Department's action may petition for an administrative proceeding (hearing) under Sections 120.569 and 120.57, F.S. The petition must contain the information set forth below and must be filed (received by the clerk) in the Office of General Counsel of the Department at 3900 Commonwealth Boulevard, Mail Station 35,Tallahassee,Florida 32399-3000. Under Rule 62-110.106(4), F.A.C., a person whose substantial interests are affected by the Department's action may also request an extension of time to file a petition for an administrative hearing. The Department may, for good cause shown, grant the request for an extension of time. Requests for extension of time must be filed with the Office of General Counsel of the Department at 3900 Commonwealth Boulevard, Mail Station 35, Tallahassee, Florida 32399-3000, before the applicable deadline. A timely request for extension of time shall toll the running of the time period for filing a petition until the request is acted upon. If a request is filed late, the Department may still grant it upon a motion by the requesting party showing that the failure to file a request for an extension of time before the deadline was the result of excusable neglect. If a timely and sufficient petition for an administrative hearing is filed, other persons whose substantial interests will be affected by the outcome of the administrative process have the right to petition to intervene in the proceeding. Intervention will be ;V:\DATA\OIL_GAS\FAO'S\Active Drafts\Hughes Packet Page-303- 5/13/2014 12.A. Permit 1349H Page 3 of 5 permitted only at the discretion of the presiding officer upon the filing of a motion in compliance with Rule 28-106.205,F.A.C. In accordance with Rule 62-110.106(3),F.A.C., petitions for an administrative hearing by the applicant must be filed within 21 days of receipt of this written notice.Petitions filed by any persons other than the applicant, and other than those entitled to written notice under Section 120.60(3),F.S.,must be filed within 21 days of publication of the notice or within 21 days of receipt of the written notice, whichever occurs first. Under Section 120.60(3), F.S., however, any person who has asked the Department for notice of agency action may file a petition within 21 days of receipt of such notice,regardless of the date of publication. The petitioner shall mail a copy of the petition to the applicant at the address indicated above at the time of filing. The failure of any person to file a petition for an administrative hearing within the appropriate time period shall constitute a waiver of that person's right to request an administrative determination (hearing) under Sections 120.569 and 120.57, F.S. A petition that disputes the material facts, on which the Department's action is based, must contain the following information: (a) The name and address of each agency affected and each agency's file or identification number, if known; (b) The name, address, and telephone number of the petitioner; the name, address, and telephone number of the petitioner's representative, if any, which shall be the address for service purposes during the course of the proceeding; and an explanation of how the petitioner's substantial interests are or will be affected by the agency determination; (c) A statement of when and how the petitioner received notice of the agency decision; (d) A statement of all disputed issues of material fact. If there are none, the petition must so indicate; (e A concise statement of the ultimate facts alleged, including the facts that the petitioner contends warrant reversal or modification of the agency's proposed action; (f) A statement of the specific rules or statutes that the petitioner contends require reversal or modification of the agency's proposed action, including an explanation of how the alleged facts relate to the specific rules or statutes;and (g) A statement of the relief sought by the petitioner, stating precisely the action that the petitioner wishes the agency to take with respect to the agency's proposed action. Under Sections 120.569(2)(c) and (d), F.S., a petition for administrative hearing must be dismissed by the agency if the petition does not substantially comply with the above requirements or is untimely filed. 1C.\DATA\°II--C AS\FAC S\Actin c Draft,.\Hugh( •""" Packet Page-304- 5/13/2014 12.A. Permit 1349H Page 4 of 5 This permit constitutes an order of the Department. Subject to the provisions of Section 120.68(7)(a), F.S., which may require a remand for an administrative hearing, the applicant has the right to seek judicial review of the order under Section 120.68, F.S., by the filing of a notice of appeal under Rule 9.110 of the Florida Rules of Appellate Procedure with the Clerk of the Department in the Office of General Counsel, 3900 Commonwealth Boulevard, Mail Station 35, Tallahassee, Florida 32399-3000; and by filing a copy of the notice of appeal accompanied by the applicable filing fees with the appropriate district court of appeal. The notice of appeal must be filed within 21 days from the date when the order is filed with the Clerk of the Department. The files associated with this order are available for public inspection during normal business hours, 8:00 a.m. to 5:00 p.m., Monday through Friday,except legal holidays,at the Florida Department of Environmental Protection, 2600 Blair Stone Road, Tallahassee,Florida 32399-2400. Executed in Tallahassee,Florida. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION Ed Garrett,P.G.,Oil and Gas Program Administrator Florida Department of Environmental Protection 2600 Blair Stone Road, MS 3588 Tallahassee,FL 32399-2400 \DA?A\OIL_GAS\FAG'S\Acth c'Drafts\Hughe-" '"" Packet Page -305- 5/13/2014 12.A. Permit 1349H Page 5 of 5 CERTIFICATE OF SERVICE The undersigned duly designated depu clerk hereby certifies that this final order was mailed before the close of business on A 9 ,2013,to the above listed persons. FILING AND ACKNOWLEDGMENT FILED,on this date,pursuant to Section 120.52(7),F.S., with the designated Department Clerk,receipt of which is hereby acknowledged. ( .41/ It€41 itiri 9, 20/3 Clerk Date C---*‘-'''') Prepared by: SS • Attachment(s): 1. Form 14,Application for Permit to Operate Well, dated August 1,2013. ✓J:\DATA\OIL GAS\FAG'S\Active Drafts\Hughes packet Page-306- • 5/13/2014 12.A. FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION APPLICATION FOR PERMIT TO OPERATE WELLJREQUEST FOR RECERTIFICATION • Fong 14 Rule 82C-26009 File this form with the Chief,Florida Geological Survey,903 West Tennessee Street,Tallahassee,Florida 32304-7700(phone numbers 85D/487-2219 and 488-4191;fax 850/488.8088).Allow 90 days for processing, Permit Number. 134914 API Number. 09021.20211 County. BPI CO Ft •Nr- Wei Name arid Number. Goleta-Hogan 20311 Field: Wildcat Lett3rle 2(22'20.102% longitude 8''32'27.096'W Section Calls N!1235.78 0479177.44 2114'FSL x 2314'FEL Section 2e Township 47S Range 29E Operators Name: Dan A.Hughes Company,L.P. Mailing Address 208 E.Houston/Drawer 669 • Beeville,Texas 78104 Phone Number: 361-358-3752 Fax Number 361-358-0598 Is this an Application for Permit to Operate Wel or a request for Recertification? Operate (Permit b Operat&Receruflcalon) Attach or Incfude by reference the following Items(Rule 620-26.008): 1.Application/Recertification fee 2. Revised/continued bond or security coverage. The security for this well f8 Q'F1' (attached or on file)with the FloridaGevlogical Survey and bears Serial Number reB0O1477a .The surety company Is Rol a °t 3. New/revised spill prevention and dean up plans. 4. New/revised fiowline specifications and installation plane. 5. Secondary containment facility certifications,If appropriate. 8. Required reports and data(reporting forme,drillers logs,well logs,etc.) List each transporter authorized by producer to transport hydrocarbons from lease. Include transporter's address,phone number,and the amount by percent(%)of each product transported. Describe the transportation system used by each transporter. Attach additional sheets as necessary. Au'J'orized Transporter: Seee•m EnopyTm4pROton(US Dor 044114) Product: 21-1 y4 100 Address: 19510 V:npnt Bros Drive Transportation System Description: TM101i1n9 M4em,Toms 75001 Phone Number: 210.701.442 =ax Number. Authorized Transporter Product qe Address: Transportation System Description: ?hone Number: Fax Number: Authorized Transporter. Product % Address: Transportation System Description: ti ?hone Number: FD S., r, AUGFax Number Texas Producer's Statement I State: County: Bee � ? ty''+ Jeffery R.ilseng ,ant the Operations Manager �,S 4 (Name) gibe) of Dan A.Hughes Company.L.P. and attest to all format herein to be true and correct (Company) Date: B/7/13 v� Signature: ,air Department Action Action Amon: By: (Approved,Denied) (NameTlbe) Date: Signature: DEv 5,010(te) Packet Page -307- 5/13/2014 12.A. BEFORE THE STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION COLLIER COUNTY and COLLIER IN THE DIVISION OF COUNTY WATER-SEWER DISTRICT, WATER RESOURCE MANAGEMENT Petitioners, OGC File No.: 14-0012 v. FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION, and DAN A. HUGHES COMPANY, L.P., Respondents. Exhibit "C " COLLIER COUNTY'S PETITION FOR ADMINISTRATIVE HEARING • Packet Page-308- 5/13/2014 12.A. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION • In re: Dan A. Hughes Company LP Permit No: 1349H Well:20-3H Collier-Hogan 1 • FINAL ORDER REQUIRING OPERATIONS AT WELL 20-W COWER HOQAN CEASEAND DESIST Pursuant to Section 403.061(8), Florida Statutes,the Department of Environmental Protection("Department")is entering this Final Order requiring the Dan A.Hughes Company LP immediately cease and desist from any further operations at the 20-3H Collier-Hogan well as proposed in its Well Proposal, Proposal No: 1001164796,dated December 23, 2013. The Department enters this Final Order in exercise of its power and duty to issue orders that are necessary to protect the State's waters from water pollution and states as follows: 1. On December 23,2013, Dan A Hughes Company LP,through counsel, mailed the Department a workover notification concerning its operation permit for the 20-3H Collier-Hogan well indicating that it intended to conduct a workover operation. The notification provided seven pages of information on the workover proposal. 2. The December 23, 2013,email indicated that the proposed workover operation would commence on December 29,2013. The proposed workover operation was initiated on December 30,2013,and Is continuing to date despite oral notification by the Department that the proposed workover operation was not approved. Exhibit"C" Collier County's Petition for Administrative Hearing Packet Page-309- 5/13/2014 12.A. 3. After reviewing the documents attached to the December 23,2013 emaIl, the Department is not satisfied that It has sufficient infarction that the proposed ' workover would be protective of the State's groundwater resources,and it is therefore ORDERED that Dan A. Hughes Company, LP CEASE AND DESIST all operations proposed in the December 23,2013,workover notification concerning the 20-3H Collier- Hogan well. Any party to this Final Order has the right to seek Judicial review of the Final Order under Section 120.68, Florida Statutes,by filing a Notice of Appeal under Rules 9.110 and 9.190, Florida Rules of Appellate Procedure,with the Clerk of the Department of Environmental Protection,Office of the General Counsel, Mail Station 35, 3900 Commonwealth Boulevard,Tallahassee,Florida 32399-3000, and by filing a copy . of the Notice of Appeal accompanied by the applicable filing fees with the appropriate district court of appeal. The Notice of Appeal must be filed within 30 days after this notice is tiled with the clerk of the Department. Executed In Leon County,Florida on December 31,2013. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION A ,,gar ' =I Vinyard Secretary 2 Packet Page -310- 5/13/2014 12.A. CERTIFICATE OF SERVICg I CERTIFY that a true copy of the foregoing was sent electronic mail only to Richard S. Brightman and Timothy M Riley, Hopping Green&Sam PA, P.O.Box 6526, Tallahassee,Florida 32314-8526,Attorneys for Dan A. Hughes Company, L.P.at richard_WhosIaw.com;limgbalftgabszactm,on this 31st day of December,2013. Deg rat FILED ON THIS DATE PURSUANT TO 120.52, FLORIDA STATUTES,WITH THE DESIGNATED DEPARTMENT CLERK,RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED. tiegg4.8.0! /0V3.1//3 CLERK DATE 3 Packet Page -311- UMW 5/13/2014 12.A. EXHIBIT 3 Packet Page-312- -- 5/13/2014 12.A. . . . April 26,2011 414 P5SCO,Ltd. 1100 FESCO Ave.-Alice,TX 78332 For Any Company Field: N/A Anywhere,USA County: N/A Sanplr XYZ Well Date: 11/8/2011 Type: Well Water Tune: 08:00 Fatima= WA Depth(Ft): WA REPORT OF WATER ANALYSIS •••••*••*a•*•*••Dissolved gods*******•••••••• •••••••••••••••other properties••••••••••••*** mL MO- Sodium(Na) 1156330 • 50299 pH 6.90 Calcium(Ca) 279.69 13.96 Specific Gravity 48 60.060°F 1020 Magnesium(Mg) 44.08 3.62 Resistivity(Ohm-meters®77.0'F) 0.227 Barium(Bs) 1.96 0.03 Potassium(K) 73.22 1.87 Iron(Fe) 0.13 — Chloride(C1) 17640.00 497.60 Stift-Davis CaCO3 Stability Index Sulfate(SO4) 95.00 1.98 ro• Carbonate(CO3) 0.00 0.00 , e% Bice rbonate(HCO3) 407.00 647 100• Hydroxide(OH) D.00 0.00 I 120• iro• Sulfide(H2S) 0.00 j i 1550 Total Solids 3010 _ Total Alkalinity(CaCO3) 333 -2 4 0 1 2 Total Hardness(CaCO3) 880 I '.-Corroafro : Sego-' Standard�neq Per Liter IAOl1 700 80 s0 i0 20 20 40 ttD OD 1Qfl 120 _y______1.00 � Log.raoq POT Liter • :- latCO3 1 1 I 1 1 I 1 . . ► . j - • .. - 1 - • 1 - 5 4 9 2 1 0 1 2 9 4 S B !'mss C rtified: FESCO,Ltd. - Alice,Texas 1 David Dsnohaus 361-661-7015 Job Number. 99999 . 9999 • Packet Page-313- , 5/13/2014 12.A. BEFORE THE STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION STATE OF FLORIDA DEPARTMENT IN THE DIVISION OF OF ENVIRONMENTAL PROTECTION WATER RESOURCE MANAGEMENT vs. OGC FILE NO. 14-0012 DAN A. HUGHES COMPANY, LP. AMENDED CONSENT ORDER This Consent Order("Order") is entered into between the State of Florida Department of Environmental Protection, ("Department") and the Dan A. Hughes Company, L.P. ("Company"), to reach settlement of certain matters at issue between the Department and the Company. 1. The Department is the administrative agency of the State of Florida having the power and duty to protect Florida's air and water resources and to administer and enforce the provisions of Chapters 377 and 403, Florida Statutes ("F. S."), and Chapters 62C-25 through 62C-30, Florida Administrative Code ("F.A.C."). The Department has jurisdiction over the matters addressed in this Order. The Department recognizes that the Collier County Board of County Commissioners (hereinafter referred to as "Collier County") and the Collier County Water-Sewer District (hereinafter referred to as the "District") have a substantial interest in this matter. 2. The Company is a"person"within the meaning of Section 403.161 and 403.031(5), F.S. 3. The Company obtained an Oil & Gas Well Drilling Permit from the Department in December of 2012 (Permit No: 1349H, Collier-Hogan 20-3H Well) to construct a well to be located at the Hogan Island Farm in Collier County, Florida. Packet Page-314- 5/13/2014 12.A. 4. Upon completion of the construction of the 20-3H Collier-Hogan Well ("Well"),the Company obtained a Five Year Operation Permit in August of 2013 to operate the Well as an oil production well. 5. On December 23, 2013, the Company submitted to the Department a Workover Notification indicating that it intended to conduct a"Workover Operation"as described in Exhibit 1 attached hereto. This notice stated that the Company planned to commence the Workover Operation on December 28 or 29. Subsequently, at the request of the Department, the Company agreed to delay the Workover Operation until at least December 30 to allow the Department more time to review and respond to the notice. 6. The Workover Operation proposed by the Company began on December 30, 2013, and continued through January 1, 2014. 7. On December 31, 2013, the Department entered a Final Order Requiring Operations at Well 20-3H Cease and Desist and served a copy of the Final Order on the Company on December 31. 2013. A copy of the Final Order is attached hereto as Exhibit 2. 8. The Company continued the Workover Operations until approximately 2:30 PM on the afternoon of January 1, 2014. 9. The Company contends that at all times it was operating lawfully under a valid permit and followed all applicable procedures required to conduct the Workover Operations described in Exhibit 1. Having reached resolution of the matter, the Department and the Company mutually agree and it is, ORDERED: 10. Within 10 days of the effective date of this Order,the Company shall pay the Packet Page-315- 5/13/2014 12.A. Department $25,000 in settlement of the regulatory matters addressed in this Order. This amount includes $20,000 for civil payments and $5,000 for costs incurred by the Department during the investigation of this matter and the preparation and tracking of this Order. WELL SAFETY 11. Immediately upon execution of this Order or upon becoming available to the Company (whichever is later), the Company shall provide to the Department and Collier County the information in paragraphs 12-14 below. 12. The Company shall provide Material Safety Data Sheets (MSDS) for all materials used in the Workover Operation described in Exhibit I attached hereto, along with the proportion and total volume of each material used in the Workover Operation. 13. The Company shall identify the total volume of water used in the Workover Operation,and the source of the water,including the permit number if the water was obtained from a permitted source and confirmation that the volume of water used for the Workover Operation does not exceed any limitation set in the permit. 14. The Company shall provide the following information concerning the flowback material management for the Well operations: (a) estimate of the total volume of flowback material; (b) storage capacity at the pad to contain any flowback material that is anticipated to be held onsite; (c) description of the secondary containment measures employed at the site; (d) the final disposal location for the flowback material resulting from the Workover Operation; and (e) and confirmation of the regulatory conditions on final disposal, including the permitting agency and permit number(s). 15. The Company shall submit an Interim Spill Prevention and Cleanup Plan ("ISPC Plan") to be implemented at the Well. The ISPC Plan shall be submitted to the Department and Packet Page -316- 5/13/2014 12.A. Collier County within fourteen (14) days of the effective date of this Consent Order. If the Department requests additional information or notifies the Company that the ISPC Plan is inadequate or otherwise unacceptable, the Company shall provide the additional information or submit a revised ISPC Plan within the time frame,not less than fourteen(1 4)days, specified by the Department in the request or notification. Implementation of the Department approved ISPC Plan constitutes satisfaction of this requirement. ANALYSIS AND MANAGEMENT 16. The Company shall provide information and analysis to both the Department and Collier County to confirm that this Workover Operation was designed and carried out in a way that it is not likely to cause or contribute to any violation of any applicable groundwater quality standard. The Department, in consultation with Collier County, shall directly retain independent third-party experts with the appropriate qualifications to assess the likelihood that the Workover Operation will cause or contribute to a violation of any applicable groundwater quality standards at the Company's sole cost and expense. This analysis shall consider at a minimum, the potential for injected or native fluids to migrate through the deep geological formations or the Well casing into surrounding groundwater bearing zones with total dissolved solids concentrations of 10,000 ppm or less. The Department and the Company shall make a good faith effort to reach mutual agreement on the selection of the third-party experts and the"Scope of Work"to be performed by the experts within 60 days of the effective date of this Order. Neither the Department nor the Company shall unreasonably withhold their approval of the experts or the Scope of Work for the analysis. The Scope of Work will be limited to analyses reasonably necessary to evaluate the likelihood that Workover Operations similar to the Workover Operations described in Exhibit 1 will cause or contribute to any violations of any applicable groundwater quality standards. The Packet Page-317- 5/13/2014 12.A. experts shall prepare a Report and submit the Report to the Department by December 1, 2014. 17. Upon receipt of the Report, the Department and Collier County shall review the Report and in a timely manner determine whether it provides sufficient information to evaluate the likelihood that Workover Operations similar to the Workover Operations described in Exhibit I will cause or contribute to any violations of any applicable groundwater quality standards. To this end, within 30 days of the receipt of the Report the Department shall coordinate with Collier County prior to its notifying the Company and the Report author of any apparent errors or omissions and request any additional information needed to evaluate the likelihood groundwater standard violations would result from similar Workover Operations. The Company shall provide the additional information reasonably requested by the Department and/or Collier County within 30 days of receipt of the Department's request. If at any time before the study is accepted by the Department anyone files a Workover notice for a Workover Operation similar to the Workover Operation described in Exhibit 1, the Department will respond to such notice with a request for information similar to the Scope of Work for the Report. Collier County's role in this. and throughout this Amended Consent Order. shall be limited to a consulting basis only, with final decision authority vested solely with the Department. 18. No future Workover Operations similar to the Workover Operation described in Exhibit I shall be implemented at any of the Company's wells (existing and proposed under valid permits) until the completion and submittal of the Report described in paragraph 16. The Department agrees to provide written notice to Collier County prior to notifying the Company when it has satisfied the Report requirements of this Consent Order. Collier County will have 30 days from receipt of the Report to consult with the Department regarding the Report. Once the Department and Collier County have reviewed the Report, the Department will notify the Packet Page -318- 5/13/2014 12.A. Company that it has satisfied the Report requirements of this Consent Order. 19. Within 30 days of the effective date of this Order, the Company shall submit a groundwater monitoring plan('Plan")to the Department and Collier County. The Plan shall also be reviewed by independent third party experts retained by the Department in consultation with the County to be paid for at the Company's sole expense and cost. The objective of the Plan is to provide information regarding the likelihood that the Workover Operation will cause or contribute to any violation of any groundwater standard in the nearby groundwater aquifer used as public and private water supply. The Plan shall be developed and implemented at the expense of the Company. The Plan shall include: (a) a one-time analytical sampling of the flowback material prior to its final disposal. In addition to the analysis identified in Exhibit 3,the one-time analytical sampling of the flowback material shall be conducted using the following analytical methods: EPA Method 350.1- total ammonia, EPA Method 8260 with required reporting of all target analytes and tentatively identified compounds having greater than 10%relative abundance, EPA Method 8270 with required reporting of all target analytes and tentatively identified compounds having greater than 10% relative abundance, EPA Method 8015C with all alcohols and glycols using the heated purge option cited in Section 11.1.2, FL PRO (State of Florida petroleum range organics), MA VPH (State of Massachusetts volatile petroleum hydrocarbons), Standard Methods 2504B — total dissolved solids, and Standard Methods 4500-CL F (listed as residual chlorine but measures total residual oxidants);; (b) Installation of a series of shallow monitoring wells,placed at the NW,NE, SW, SE corners of the pad. The wells shall be designed to test the full column of the potable water zone; (c)installation of one deep groundwater monitoring well on the pad and southwest of the subject well to a depth equal to the base of the sandstone aquifer (approximately 400'); (d) ground water quality sampling and analyses of all wells;; (e) Packet Page-319- 5/13/2014 12.A. sampling and analyses of all monitoring wells on a quarterly basis for either ten(10)years from the date upon which the Department approves the groundwater monitoring plan or for five (5) years after plug and abandonment of the Well, which ever monitoring period shall expire first; (f) an inventory of freshwater supply wells within a quarter mile of the well bore hole;and(g)a schedule for implementing the Plan. 20. If the Department requests additional information or notifies the Company that the Plan is inadequate or otherwise unacceptable, the Company shall provide the additional information or submit a revised Plan within the time frame specified by the Department in the request or notification. Within 30 days of notification from the Department that the Plan is acceptable,the Company shall begin implementing the Plan. 21. The Company is required to immediately notify the Department and Collier County or its designee of any accident or incident occurring at the well site. 22. The Company shall post a one million dollar bond for potential clean-up costs at the well site. SETTLEMENT OF ALL DISPUTES 23. The terms of this Consent Order, upon execution, shall supersede the requirements of the Final Order Requiring Operations at Well 20-3H Cease and Desist. 24. This Consent Order is in settlement of all disputes between the Company and the Department regarding the Permit No. 1349H, 20-30H Collier-Hogan Well. The Department and the Company agree to act in good faith and to cooperate fully with each other in carrying out the intent of this Consent Order, and all matters related thereto, and for that purpose agree to execute any additional documents or take such action as may prove reasonably necessary to accomplish that intent. Packet Page -320- 5/13/2014 12.A. CONFIDENTIALITY 25. If any of the information submitted by the Company in response to the requirements of this Order is considered a trade secret or is otherwise confidential information in accordance with Chapter 377 or Section 403.111, F.S., the Company shall request upon submittal of the information that the Department keep such information confidential. The Department will thereafter keep such information confidential in accordance with the requirements of Chapter 377 and Section 403.111, F.S. ORDER ADMINISTRATION 26. The Company acknowledges and waives its right to an administrative hearing pursuant to Sections 120.569 and 120.57, F.S., on the terms of this Order, The Company acknowledges its right to appeal the terms of this Order pursuant to Section 120.68, F.S., and waives that right upon signing this Order. 27. If any event, including administrative or judicial challenges by third parties unrelated to the Company, occurs which causes delay or the reasonable likelihood of delay, in complying with the requirements of this Consent Order, the Company shall have the burden of proving the delay was or will be caused by circumstances beyond the reasonable control of the Company and could not have been or cannot be overcome by the Company's due diligence. The failure of a contractor, subcontractor, materialman or other agent (collectively referred to as "contractor") to whom responsibility for performance is delegated to meet contractually imposed deadlines shall not be a cause beyond the control of the Company, unless the cause of the contractor's late performance was also beyond the contractor's control. Upon occurrence of an event causing delay,or upon becoming aware of a potential for delay,the Company shall notify the Department orally within 24 hours or by the next working day and shall, within seven calendar Packet Page-321- 5/13/2014 12.A. days of oral notification to the Department, notify the Department in writing of the anticipated length and cause of the delay,the measures taken or to be taken to prevent or minimize the delay and the timetable by which the Company intends to implement these measures. if the parties can agree that the delay or anticipated delay has been or will be caused by circumstances beyond the reasonable control of the Company, the time for performance hereunder shall be extended for a period equal to the agreed delay resulting from such circumstances. Such agreement shall adopt all reasonable measures necessary to avoid or minimize delay. Failure of the Company to comply with the notice requirements of this paragraph in a timely manner shall constitute a waiver of the Company's right to request an extension of time for compliance with the requirements of this Consent Order. 28. Entry of this Consent Order does not relieve the Company of the need to comply with applicable federal, state or local laws,regulations or ordinances. 29. The terms and conditions set forth in this Consent Order may only be enforced in a court of competent jurisdiction pursuant to Sections 120.69 and 403.121, F.S. Failure to comply with the terms of this Consent Order shall constitute a violation of Section 403.161(1)(b), F.S. 30. All submittals and payments required by this Amended Consent Order to be submitted to the Department shall be sent to the Program Administrator of the Oil &Gas Program, Division of Water Resource Management, Florida Department of Environmental Protection, 2600 Blair Stone Road, MS 3588, Tallahassee, FL 32399. All notice and submittals required by this Amended Consent Order to be submitted to Collier County shall be sent to Jeffrey A. Klatzkow, County Attorney, 3299 Tamiami Trail East, Suite 800. Naples, FL 34112, Office Telephone No. 239-252-8400, e-mail jeffrevklatzkowrii colliereov.net, or as changed in writing sent to the Department and the Company. Packet Page-322- 5/13/2014 12.A. 31. The Department hereby expressly reserves the right to initiate appropriate legal action to prevent or prohibit any violations of applicable statutes or the rules promulgated there- under that are not specifically addressed by the terms of this Consent Order. 32. This Consent Order is a settlement of the Department's civil and administrative authority arising under Florida law to resolve the matters addressed herein. This Order is not a settlement of any criminal liabilities which may arise under Florida law, nor is it a settlement of any violation which may be prosecuted criminally or civilly under federal law. 33. Electronic signatures or other versions of the parties' signatures, such as pdf or facsimile, shall be valid and have the same force and effect as originals. No modifications of the terms of this Order shall be effective until reduced to writing, executed by both Respondents and the Department, and filed with the clerk of the Department. NOTICE OF RIGHTS 34. This Consent Order is a final order of the Department pursuant to Section 120.52(7), F.S., and it is final and effective on the date filed with the Clerk of the Department unless a Petition for Administrative Hearing is filed in accordance with Chapter 120,F.S.Upon the timely filing of a petition,this Order will not be effective until further order of the Department. 35. Persons who are not parties to this Order,but whose substantial interests are affected by it,have a right to petition for an administrative hearing under Sections 120.569 and 120.57,F.S. Because the administrative hearing process is designed to formulate final agency action, the filing of a petition concerning this Order means that the Department's final action may be different from the position it has taken in the Order. The petition for administrative hearing must contain all of the following information; Packet Page-323- 5/13/2014 12.A. a) The OGC Number assigned to this Order; b) The name, address, and telephone number of each petitioner; the name, address, and telephone number of the petitioner's representative, if any, which shall be the address for service purposes during the course of the proceeding; c) An explanation of how the petitioner's substantial interests will be affected by the Order; d) A statement of when and how the petitioner received notice of the Order; e) Either a statement of all material facts disputed by the petitioner or a statement that the petitioner does not dispute any material facts; f) A statement of the specific facts the petitioner contends warrant reversal or modification of the Order; g) A statement of the rules or statutes the petitioner contends require reversal or modification of the Order; and h) A statement of the relief sought by the petitioner, stating precisely the action petitioner wishes the Department to take with respect to the Order. The petition must be filed (received) at the Department's Office of General Counsel, 3900 Commonwealth Boulevard, MS 35, Tallahassee, Florida 32399-3000 within 21 days of receipt of this notice. Failure to file a petition within the 21-day period constitutes a person's waiver of the right to request an administrative hearing and to participate as a party to this proceeding under Sections 120.569 and 120.57, F. S. Before the deadline for filing a petition, a person whose substantial interests arc affected by this Order may choose to pursue mediation as an alternative remedy under Section 120.573, F.S. Choosing mediation will not adversely affect such person's right to request an administrative hearing if mediation does not result in a settlement. Additional Packet Page -324- 5/13/2014 12.A. information about mediation is provided in Section 120.573, Florida Statutes and Rule 62- 110.106(12), F.A.C. FOR THE COMPANY: DAN A. HUGHES COMPANY, L.P. By: Dan A. Hughes Management, L.LC. Its general partner DATE J. Henry Kremers, COO/Vice President of Land P.O. Drawer 669,Beeville, Texas 78104 ADDRESS DONE AND ORDERED this 8th day of April, 2014, in Tallahassee., Florida. STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION Mark Thomasson, P.E. Director, Division of Water Resource Management Filed, on this date, pursuant to Section 120.52, Fla. Stat, with the designated Department Clerk, receipt of which is hereby acknowledged. Clerk Date Copies furnished to: Lea Crandall, Agency Clerk Mail Station 35 Packet Page-325-