Source: http://nm.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180523_0001085.DNM.htm/qx
Timestamp: 2019-04-25 20:52:35+00:00

Document:
UNITED STATES DEPARTMENT Of INTERIOR,, Defendant.
THIS MATTER is before the Court on Plaintiff Cibola Energy Corporation's action for judicial review of a decision by the United States Department of the Interior's Board of Land Appeals (IBLA), filed with this Court on October 24, 2012. [Doc. 1] The appeal is pursuant to the Administrative Procedures Act, 5 U.S.C. §§ 701-706, which provides for judicial review of final agency decisions. The parties provided the Court with briefing. See Opening Brief of Cibola Energy Corporation [Doc. 18]; Answering Brief of Federal Defendants [Doc. 21]; Plaintiff's Reply Brief [Doc. 24]. Having considered the parties' arguments, the Administrative Record, the relevant law, and being otherwise fully advised of the premises, the Court AFFIRMS the IBLA decision. The Court is persuaded that the IBLA's decision is well supported by evidence in the record and that the IBLA considered all of the facts before it, provided reasoned bases for its conclusion, and was not otherwise arbitrary and capricious.
43 C.F.R. § 3162.4-2 is part of the Regulations Relating to Public Lands under which the Bureau of Land Management (BLM) operates. It relates to onshore oil and gas operations and regulates samples, tests, and surveys of wells. § 3162.4-2. Subsection (b) provides that “[a]fter the well has been completed, the operator shall conduct periodic well tests which will demonstrate the quantity and quality of oil and gas and water. The method and frequency of such well tests will be specified in appropriate notices and orders. When needed, the operator shall conduct reasonable tests which will demonstrate the mechanical integrity of the downhole equipment.” § 3162.4-2(b).
Cibola is the operator of Ysletano Canyon Federal No. 1 Well (Well). The Well is located on lease NMNM-38313, which Cibola holds by assignment. This action requires the Court to determine whether the IBLA acted arbitrarily and capriciously when it affirmed the BLM's decision ordering Cibola, pursuant to § 3162.4-2(b), to conduct casing integrity (CIT) and production tests on the Well under the following facts.
Generally, to maintain an oil and gas lease, a well must be in production. See 43 C.F.R. § 3107.2-3; 43 C.F.R. § 3162.3-4. Categorizing a well as “temporarily abandoned” (TA) allows a lessee to avoid the termination of a lease, even when a well is not currently producing. § 3162.3-4; Coronado Oil Co., 164 IBLA 309, 321-23 (2005). Even a well that is not producing must be capable of producing in paying quantities to avoid the termination of its lease. Coronado Oil Co., 164 IBLA at 324.

References: § 3162
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 § 3107
 § 3162
 § 3162