DQ-PHAA-216-356 Ridgway PA Final.pdf

Colorado Department of Natural Resources

DOCUMENTED QUOTATION

Special Conditions and Bid Information

Hackathorn Drilling Swanson-Peterson #1 Plugging and Abandonment Project

DQ-PHAA-2016-356

1.0 GENERAL CONDITIONS

The Colorado Oil and Gas Conservation Commission (COGCC) is bidding this project using an informal Documented Quotation procedure in coordination with the Colorado Department of Natural Resources Purchasing Office. This request for Documented Quotation incorporates the Special Conditions described herein. The attached Wellbore Diagram Drawings, Bid Schedule, General Conditions for Purchase Orders (attached), Purchase Order Terms and Conditions, List of Equipment Offered Form, Special Provisions, and other Contract Documents described in the General Conditions for Purchase Orders are hereby incorporated by reference.

1.1 PROJECT WORK SUMMARY AND LOCATION

The work will include plugging and abandonment of the Swanson-Peterson #1 well, located in the NE/4 of the NE/4 of Section 15, Township 45 North, Range 8 West, NM P.M., Ouray County, Colorado. The wellbore configuration and plugging procedure are described in Section 2.0 Project Work Description.

Any costs to plug and abandon the Swanson-Peterson #1 well will be paid from the Plugging and Well Reclamation portion of COGCC’s Oil and Gas Conservation and Environmental Response Fund.

Removal and possible demolition of a structure (“well-shed”) may be performed by others under a separate contract. Reclamation of the well pad will be performed by others under a separate contract.

1.2 PRE-BID MEETING AND SITE SHOWING

Bidders shall visit the site and take such other steps as may be reasonably necessary to ascertain the nature and location of the work, including average climatic conditions and the general and local conditions which can affect the work or the cost thereof. Failure to do so will not relieve bidders from responsibility for estimating properly the difficulty or cost of successfully performing the work.

A mandatory pre-bid meeting and site showing will be held on Tuesday, September 29, 2015 at 1:00 PM. All contractors must register for the pre-bid meeting and site showing with Jay Krabacher, COGCC Engineer, @ 970-625-2497 x 4 (or jay.krabacher@state.co.us) prior to Monday, September 28, 2015 at 1:00 PM. The location is not signed. COGCC staff will meet bidders at a location to be decided along U.S. Highway 550 in Ridgway. The site is located approximately 2 miles (about a 5 minute drive) east of Ridgway, CO.

Bids will not be considered from any contractor that does not attend the pre-bid meeting and site showing.

A sign-in sheet will be available at the pre-bid meeting for firms to register their attendance. It is the bidder's responsibility to make certain their attendance is recorded on the sign-in sheet. Failure to sign-in as directed by the PROJECT MANAGER will be cause for rejection of a bid. Bidders are cautioned that, notwithstanding any remarks or clarifications given at this meeting and site showing, all terms and conditions of the contract documents remain unchanged unless they are changed by written amendment issued by the OWNER. If the answers to questions or any amendment to the Contract Documents create ambiguities, it is the responsibility of the bidder to seek clarification prior to submitting a bid.

1.3 BID SUBMITTAL

The bid due date for this project is Thursday, October 13, 2015 at 4:00 PM. Bids will be accepted by mail, facsimile, hand carried or via e-mail as a Word or Portable Document Format (PDF) file attachment and must be sent to the Department of Natural Resources Purchasing Agent:

Allan Smith, Purchasing Agent Department of Natural Resources Purchasing Office 1313 Sherman Street #423 Denver, CO. 80203

Phone: (303) 866-3292 X8631 Fax: (303) 866-5575 Email: allan.smith@state.co.us

A responsive bid must include the following:

BID SCHEDULE, properly completed CONTRACTOR’S Equipment, Personnel and Materials Rate Schedule List of Equipment Offered Form

Bids will not be accepted directly by the COGCC. Bids must be submitted to the Department of Natural Resources Purchasing Office, as indicated above.

1.4 LIST OF EQUIPMENT OFFERED

The List of Equipment Offered Form must be returned with each bid. All equipment to be used on the project must be listed on the form or attached to the form. The CONTRACTOR must own, have a current lease for the equipment intended to be used to perform the work, or must furnish a statement of arrangements to rent, or otherwise procure, adequate equipment to perform the work. Inclusion of a piece of equipment on the List of Equipment Offered represents a commitment to devote that piece of equipment to the project work for the entire duration of the project. If several contractors propose to join together to perform the work under this contract, equipment owned or controlled by each should be listed and the PRINCIPAL REPRESENTATIVE identified. A contract will not be awarded to a bidder who in the opinion of the PROJECT MANAGER (a) does not have adequate equipment, or (b) does not have firm and satisfactory arrangements to obtain adequate equipment to perform the work described in this Documented Quotation.

1.5 BID AWARD

Award will be made with reasonable promptness, by written notice to the low responsive and responsible bidder whose bid meets the requirements and criteria set forth in this Documented Quotation. These criteria will include, but not be limited to the lowest GRAND TOTAL PRICE, corrected if necessary for errors in price extension and/or addition, and capability to meet the performance time requirements. In the case of mathematical discrepancies, the unit price shall govern. The GRAND TOTAL PRICE will be used for comparing bids only.

1.6 RESIDENCE BIDDER PREFERENCE

When a contract for commodities or services is to be awarded to a bidder, a resident bidder shall be allowed a preference against a nonresident bidder equal to the preference given or required by the state in which the nonresident bidder is a resident.

1.7 SERVICE DISABLED VETERAN OWNED SMALL BUSINESSES (SDVOSBs) PREFERENCE

SDVOSBs, who are incorporated or organized in Colorado or maintain a place of business or have an office in Colorado and who are officially registered and verified as a SDVOSB by the Center for Veteran Enterprise within the U.S. Department of Veterans Affairs. (www.vip.vetbiz.gov), may receive a 5% preference on their bid. This preference applies only to the price, and the SDVOSBs must still meet all other qualifications required in the bid.

SDVOSBs claiming this preference shall submit documentation of SDVOSB certification Issued through the U.S. Department of Veterans Affairs in their response to the solicitation. Bid submissions without this documentation will not be given a preference.

1.8 PURCHASE ORDER CONTRACT

A Purchase order contract will be issued to the awarded bidder. The Purchase Order Contract will include all documents defined in Section 1 of DEFINITIONS of the GENERAL CONDITIONS FOR PURCHASE

ORDERS.

1.9 PERFORMANCE TIME REQUIREMENTS

The project shall be started and completed between October 19, 2015 and December 1, 2015.

CONTRACTOR shall prosecute the work diligently and complete the work and have equipment removed from the project location, as described in this Documented Quotation, no later than December 1, 2015 at 5:00 PM. The time stated for completion shall include cleanup, as defined in Section 27 of the GENERAL CONDITIONS FOR PURCHASE ORDERS, and final inspection by the PROJECT MANAGER.

1.10 PROJECT OBSERVATION

The PROJECT MANAGER will be at the project site to supervise plugging activities and ensure that each work item is completed and constructed to design specifications. The PROJECT MANAGER will be available during regular business hours (8:00 A.M. to 5:00 P.M.) on weekdays. Any additional inspections will not be scheduled on weekend days or holidays without prior approval of the PROJECT MANAGER. It is the CONTRACTOR’S responsibility to schedule inspections with the PROJECT MANAGER so as not to delay the work.

2.0 PROJECT WORK DESCRIPTION

The following work description applies to the plugging and abandonment of the Swanson-Peterson #1 well, Ouray County, formerly a domestic gas well that was reportedly shut-in in 1986 when production rates declined and the landowner converted to propane. Removal and disposition of the well-shed will be performed by others prior to the plugging and abandonment of this well. Rig anchors, if necessary for the work, will be installed and tested by others. Reclamation is not included in this scope of work and will be performed by others after plugging and abandonment.

The work assumes use of steel pits for circulation and cement returns. If CONTRACTOR intends to use earthen pits for plugging and abandonment, then pits must be lined, and CONTRACTOR will be responsible for permitting, constructing, maintaining, and closing the plugging pits in accordance with COGCC’s 900-series and 1000-series rules. The existing reserve pit on location shall not be used as a plugging pit.

Global Positioning System well location data will be measured by COGCC staff. CONTRACTOR will not be responsible for obtaining this data.

2.1 SWANSON-PETERSON # 1 WELL

2.1.1 DESCRIPTION

LOCATION: NENE 15 T45N R8W, N.M. P.M.

WELL: Swanson-Peterson #1, API No. 05-091-05005

STATUS: Shut-In

WELL SUMMARY:

Vertical well

Spud on August 10, 1947

Hole size(s), casing size(s), and casing cementing details unknown

Tubing (if any) size and setting depth unknown

Reported log tops: Mancos at 420’

The Mancos Formation outcrops at surface on this location. Therefore, this operator-reported formation top is likely the casing setting depth with open hole below, rather than the actual formation top.

Total Measured Depth (TMD) = 500’

OTHER NOTES:

• None.

2.1.2 MATERIALS

Refer to Section 3.0 – Measurement and Payment.

2.1.3 EXECUTION

1. Contact Jay Krabacher, PROJECT MANAGER, to schedule a start date and to coordinate any schedule changes.

2. Bradenhead Access. a. Dig up bradenhead valve (if any). If no casing set other than surface casing, then proceed to Step 3.

b. Record bradenhead pressure and blow down pressure.

c. Record blow-down characteristics.

d. If shut-in pressure prior to blowdown exceeds ((0.6 psi/ft - 0.433 psi/ft) * 420 feet) = 70 psi), then discuss procedural changes with COGCC Project Manager. Any additional work related to additional cement squeezes at depths other than those identified herein, would require a Change Order.

e. If no pressure on bradenhead valve (if any) when opened, then discuss possible hot-tap procedure with COGCC Project Manager. Any additional work related to hot tapping a new valve would require a Change Order.

3. MIRU.

4. Pull existing tubing (if any).

5. Trip in hole with CONTRACTOR-supplied tubing. If any obstructions are present or if any fish are encountered prior to reaching a depth of 420’, then discuss procedural changes with COGCC Project

Manager. Any additional fishing work would require a Change Order.

6. Continue tripping in hole to 500’ TMD. If obstructions are encountered, including but not limited to a sloughed hole, and the tubing does not reach 500’, then discuss procedural changes with COGCC Project Manager. Any additional work related to use of a bit to wash down to 500’ would require a Change Order.

7. After reaching 500’ TMD, circulate well one bottoms-up with water. Circulated fluid shall be directed to a tank for subsequent off-site disposal, and CONTRACTOR shall assume a volume of

175 bbls well fluids plus 25 bbls wash-up and cement returns for a fluid disposal volume of approximately 200 bbls, or up to two 130 bbl water truck loads. Any disposal volumes exceeding

260 bbl would require a Change Order

8. Plug #1 (open hole 500’ TMD to 370’ [50’ above expected casing shoe setting depth]):

a. Mix & pump a 130’ cement plug, leaving approximately 80’ cement in the open hole and 50’ cement in the casing. Actual required volumes of cement are uncertain, given all unknowns related to the casing and cement configuration of this well. For bidding purposes, CONTRACTOR SHALL assume a total of 260 sacks cement for Plug #1. The actual volume of cement shall be adjusted by

Change Order when the casing size is determined in the field, based on the use of Class G neat cement (1.15 cf/sk yield).

9. Shut-in well and wait on Cement 8 hrs.

10. Check well pressure. If any pressure is observed, then discuss procedural changes with

COGCC Project Manager. Any additional work related to pressure mitigation would require a

Change Order.

11. Tag cement plug. If tag is below a depth of 370’, then discuss procedural changes with

COGCC Project Manager. Any additional plugging work related to lost circulation resulting in an unexpectedly low cement plug top would require a Change Order.

12. Plug #2 (Plug #1 top to surface):

b. Mix & pump a 370’ cement plug in the casing. Actual required volumes of cement are uncertain, given all unknowns related to this well. For bidding purposes, CONTRACTOR SHALL assume a total of 820 sacks cement for Plug

#2. The actual volume of cement shall be adjusted by Change Order when the casing size is determined in the field, based on the use of Class G neat cement

(1.15 cf/sk yield).

c. If CONTRACTOR’S cementing equipment is not suitable for pumping this plug as a single operation, then contractor shall consider any additional costs related to pumping more than one plug to accomplish the same objective identified in Step

12.a. above (a full column of cement in the casing from 370’ to surface.

13. Cut casing string off at 4’ below final grade, weld plate with weep hole, and backfill well cellar.

14. RDMO drill rig and CONTRACTOR equipment. Cut off and bury all anchors.

15. Pad reclamation and re-seeding will be performed by others.

3.0 MEASUREMENT AND PAYMENT

CONTRACTOR shall furnish all labor, materials, tools, equipment, appurtenances, incidentals and all services necessary to perform all work required at the lump sum or unit prices for the items listed below beginning in Section 3.1. These items refer to and are the same items as listed in the Bid Schedule.

They constitute all of the pay items for the completion of the work. Each lump sum and unit price bid will be deemed to include an amount considered by CONTRACTOR to be adequate to cover CONTRACTOR’S overhead and profit for each separately identified item.

Quantities of work shall be measured in the field by the CONTRACTOR and verified by the PROJECT MANAGER. CONTRACTOR’S original daily job logs, field notes, computations, and other records for the purpose of measuring quantities shall be furnished to the PROJECT MANAGER within two (2) working days of completion and may be used by the PROJECT MANAGER to the extent necessary in determining the proper amount of payments due to the CONTRACTOR. The CONTRACTOR shall retain a copy of the daily job logs, original notes, computations, and records furnished to the PROJECT MANAGER.

CONTRACTOR’S daily job logs shall include accurate records of the daily progress of the work and shall record the progress on a format acceptable to PROJECT MANAGER. Daily job logs shall include at a minimum the following information:

1. CONTRACTOR name, project name, date of field work

2. Identify by individual, all CONTRACTOR and SUBCONTRACTOR personnel on-Site for the day.

3. Summarize the work completed, including plugging procedures, and the materials used.

4. List the major equipment used to complete the work.

5. Provide an hourly tally for time on-location, including a separate hourly tally for any standby time.

6. Identify all standby time including but not limited to; repairs or maintenance, breakdown, accidents, time spent waiting-on-cement and work stoppage directed by PROJECT MANAGER or

OWNER.

7. CONTRACTOR’S superintendent shall sign the completed daily job log upon completion.

Applications for Payment shall be submitted to the PROJECT MANAGER for review and approval at least ten (10) working days prior to final submission to OWNER.

Payment will be made for actual quantities at the unit prices listed on the Bid Schedule only when approved and verified by the PROJECT MANAGER. If a change order is approved, which includes work for items not listed in this section, then unit costs listed on CONTRACTOR’S Rate Schedule will be considered by the PROJECT MANAGER when authorizing payment.

3.1 MOBILIZATION/DEMOBILIZATION

3.1.1 DESCRIPTION

This specification covers the CONTRACTOR'S operations for:

1. Payment of premiums for bonds and insurance acquired specifically for this project, including premiums for performance and payment bonds, if any.

2. Obtaining and acquiring any permits necessary to complete this project.

3. Movement of CONTRACTOR'S personnel, equipment, operation supplies, and incidentals to the project site.

4. Establishment of necessary temporary facilities, including sanitation facilities, and any required temporary utilities, at the project site.

5. Preparatory work at the project sites, including excavation of the bradenhead access.

6. Demobilization of CONTRACTOR'S equipment and all other facilities, final project clean-up.

7. Any travel time and per diem for CONTRACTOR’S crew or SUBCONTRACTOR’S crew.

3.1.2 EXECUTION

Upon receipt of Notice to Proceed, the CONTRACTOR shall furnish, mobilize, move in and install such temporary works and equipment necessary for the successful completion of the work. CONTRACTOR shall operate and maintain such temporary works and equipment for the duration of work at the project location. CONTRACTOR shall provide for movement of CONTRACTOR’S personnel and supplies to and from each project location on a daily basis. Any preparatory work at each project location necessary to move in and position CONTRACTOR’S equipment shall be included as mobilization.

Upon completion of the work under this contract, the CONTRACTOR shall remove all temporary facilities and equipment. The CONTRACTOR shall remove from the vicinity of the work and haul all rubbish, trash, garbage, and debris to a county-approved disposal site. Additionally, the CONTRACTOR shall remove from the vicinity all unused materials, and the like, belonging to the CONTRACTOR or used under the CONTRACTOR'S direction during construction. The contractor shall fill and dress all holes and disturbances made for convenience, and leave all areas in good order and condition, subject to final inspection and approval by the PROJECT MANAGER.

3.1.3 MEASUREMENT AND PAYMENT

Measurement shall be made based on mobilization to and demobilization from the project location or this bid item. Payment at the bid price shall constitute full compensation for all of the CONTRACTOR’S costs of whatever nature to mobilize to and demobilize from the project location.

3.2 PLUG AND ABANDON

3.2.1 DESCRIPTION

This specification covers the CONTRACTOR’S time on location for labor and equipment required to complete the work specified in Section 2.0 – Project Work Description. Hourly unit costs shall include all costs that the CONTRACTOR deems necessary to complete the work for which payment is not otherwise specifically itemized on the Bid Schedule. Materials used to complete the work are described in subsequent sections of this Documented Quotation, and therefore are not itemized in this section.

The CONTRACTOR shall provide the following minimum personnel, equipment, and services:

1. Provide a Superintendent with whom the PROJECT MANAGER and OWNER can communicate and who will supervise the work and be fully responsible for the performance thereof. The Superintendent shall be present at the project site whenever work is being performed at the project site.

2. Provide an experienced crew sufficient to operate CONTRACTOR’S equipment in a safe and diligent manner.

3. Provide mast truck with tubing handling tools. Provide the tubing work string. Provide pumps to circulate wellbore fluids and cement, a power swivel and drill bit(s).

4. Provide a steel pit for circulated fluid and wash up fluid. Separate payment will not be approved for the installation, monitoring, maintenance, closure, and reclamation of earthen pits. If CONTRACTOR chooses to use a plugging pit, rather than a steel pit, then all associated costs for the plugging pit shall be incorporated into the unit cost for this bid item.

5. Provide welder services and materials necessary to cut casing strings and weld plates.

Any additional equipment or services that the contractor deems necessary to complete the work specified in Section 2.0 – Project Work Description shall be included in the CONTRACTOR’S List of Equipment Offered, and if these equipment or services are used to complete the work, then the cost for these services shall be incidental to the hourly unit cost for the Plug and Abandon line item on the Bid Schedule.

3.2.2 EXECUTION

Refer to Section 2.0 – Project Work Description.

3.2.3 MEASUREMENT AND PAYMENT

The CONTRACTOR shall submit daily job logs to the PROJECT MANAGER to verify hourly quantities for plug and abandon labor, equipment and services for time on location. Payment will be based on the total number of hours listed on the daily job logs and verified by the PROJECT MANAGER at the bid price, except as noted below. Standby time will be paid at a unit rate equal to seventy-five (75) percent of the bid price for hourly time. Daily travel time and per diem will not be considered as hourly time with this bid item. Payment shall constitute full compensation for all of the CONTRACTOR’S costs of whatever nature to plug and abandon the well.

3.3 CEMENT SERVICES

3.3.1 DESCRIPTION

The CONTRACTOR shall provide cement services, including circulating, and one thousand eighty (1,080) sacks of cement mixed with sufficient water to achieve a density of 15.8 ppg and a yield of 1.15 cu ft yield per sack. The CONTRACTOR shall provide water on location in sufficient quantities to circulate the wellbore and mix the cement. The CONTRACTOR shall also provide a means to transport water to and store water on location.

Cement plugs shall be installed by the CONTRACTOR at various depths, as described in Section 2.0 – Project Work Description. Cement shall be Southwest Portland G common cement without additives. Any changes in the type of cement must be approved by the PROJECT MANAGER. Cement shall be mixed to American Petroleum Institute standards, such that the slurry design will achieve a minimum compressive strength of three hundred

(300) psi after twenty-four (24) hours and eight hundred (800) psi after seventy-two (72) hours measured at ninety-five (95) degrees Fahrenheit and at eight hundred (800) psi.

3.3.2 EXECUTION

Refer to Section 2.0 – Project Work Description.

3.3.3 MEASUREMENT AND PAYMENT

The CONTRACTOR shall submit daily job logs to the PROJECT MANAGER to verify cement quantities. Cement shall be measured by 94-pound sacks. Payment will be based on the total sacks of cement installed, as listed on the daily job logs and verified by the PROJECT MANAGER at the bid price. Payment shall constitute full compensation for all of the CONTRACTOR’S costs of whatever nature for cement services, including water.

Water used for circulating and mixing cement shall be considered incidental to the unit cost for cement services.

3.4 SOLID WASTE MANAGEMENT

3.4.1 DESCRIPTION

All solid materials, including materials that solidify from circulated wellbore fluids, or solids that come in contact with wellbore fluids shall be considered oil and gas exploration and production (E&P) solid waste. The CONTRACTOR shall provide a means to temporarily store E&P solid waste on location, and the storage process shall be designed such that the E&P waste shall not come in contact with native soils, surface water, or well pad fill. The CONTRACTOR shall provide a means to handle and transport E&P solid waste to a licensed off-site disposal facility.

3.4.2 EXECUTION

3.4.3 MEASUREMENT AND PAYMENT

Measurement will be based upon 100% completion of solids storage, handling, transportation, and disposal. CONTRACTOR shall provide a disposal certificate from a county-approved disposal facility to the PROJECT MANAGER for solids disposal. Lump sum payment at the bid price shall constitute full compensation for all of the CONTRACTOR’S costs of whatever nature to complete solid waste management.

3.5 LIQUID WASTE MANAGEMENT

3.5.1 DESCRIPTION

All liquids that are circulated from the wellbore shall be considered oil and gas E&P liquid waste. The CONTRACTOR shall provide a means to temporarily store E&P liquid waste on location, and the storage process shall be designed such that the E&P waste shall not come in contact with native soils, surface water, or well pad fill. The CONTRACTOR shall provide a means to handle and transport E&P liquid waste to a licensed off-site disposal facility. Disposal of any unused circulation fluid is also covered under this item.

3.5.2 EXECUTION

3.5.3 MEASUREMENT AND PAYMENT

Measurement will be per load (up to two [2] 130 barrel loads) of liquids for disposal. CONTRACTOR shall provide a disposal certificate from an approved E&P disposal facility to the PROJECT MANAGER for solids disposal. Payment will be based on the total loads of liquid disposed, as listed on the daily job logs and verified by the PROJECT MANAGER at the bid price. Payment shall constitute full compensation for all of the CONTRACTOR’S costs of whatever nature for E&P liquid disposal.

4.0 LIST OF ATTACHMENTS

OGCC Contract General Terms and Conditions DNR PO General conditions Special Provisions PO Terms and Conditions PHAA_2016-356 bid Schedule List of Equipment Offered Swanson-Peterson #1 – Wellbore Schematic