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BEFORE THE STATE OF FLORIDA
DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF FLORIDA DEPARTMENT IN THE OFFICE OF THE
OF ENVIRONMENTAL PROTECTION WATER RESOURCE DIVISION

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.
The Department finds and the Company neither admits nor denies the following:
1. The Department is the administrative agency of the State of Florida having the
power and duty to protect Floridas 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, 20-30H Collier-Hogan Well) to construct a well to be
located at the Hogan Island Farm in Collier County, Florida.

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4. Upon completion of the construction of the 20-30H 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 28 or 29 December. Subsequently, at the request of the Department,
the Company agreed to delay the workover operation until at least 30 December to allow the
Department more time to review and respond to the notice. The Company never received any
response to the notice from the Department.
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. The Departments Final Order did not allege any violations
of any applicable laws or Department rules, stating instead that the Department is not satisfied
that it has sufficient information that the proposed workover would be protective of the States
groundwater resources . . .. The Company continued the Workover Operations until
approximately 2:30 PM on the afternoon of 1 January, 2014 failed to comply with the
Departments Final Order. A copy of the Final Order is attached hereto as Exhibit 2.
7.8. The Company contends that at all times it was operating under a valid permit and
followed all applicable procedures required to conduct the Workover Operations described in
Exhibit 1, and its actions in doing so were legal and authorized in every way.

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Having reached resolution of the matter, the Department and the Company mutually
agree and it is,
ORDERED:
8.9. Within 10 days of the effective date of this Order, the Company shall pay the
Department $35,00022,000 in settlement of the regulatory matters addressed in this Order. This
amount includes $320,000 for civil penaltiespayments and $52,000 for costs incurred by the
Department during the investigation of this matter and the preparation and tracking of this
Order. In lieu of paying civil payments to the Department, the Company may provide in-kind
payments by funding the studies required below.
WELL SAFETY
9.10. Immediately upon execution of this Order and prior to resuming any operations at
the subject well, the Company shall provide to the Department the information in paragraphs
10-13 below.
10.11. 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.
11.12. 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.
12.13. 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

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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).
13.14. The Company shall submit an Interim Spill Prevention and Cleanup Plan
(ISPC Plan) to be implemented at the Well. The ISPC Plan shall be subject to the
Departments approval before resuming operations. 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 (14) days, specified by the Department in the
request or notification. Implementation of the Department approved ISPC Plan constitutes
satisfaction of this requirement.


RISK ANALYSIS AND MANAGMENT
154. The Company shall provide information and analysis to confirm that this and
other Workover Operations are was designed and carried out in a way that provides reasonable
assurance that it will not cause or contribute to any violation of any applicable groundwater
quality standardeliminates risk to the environment. To provide reasonable assurance that there is
no risk the Workover Operation will not cause or contribute to any violations of any applicable
of contamination to the groundwater quality standards from the Workover Operation at the Well,
the Company, at its sole expense, shall retain independent third-party experts with the
appropriate professional licenses qualifications to assess the level of risk develop a that the

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Workover Operation will cause or contribute to a violation of any applicable groundwater quality
standards risk analysis (Risk Analysis) related to the activities of the Company as identified in
the Workover Operation. This analysis e Risk Analysis shall consider at a minimum, the
potential for 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. If no agreement is reached
within 60 days of the effective date of this Order, the Department will select the experts to be
used and independently Neither the Department nor the Company shall unreasonably withhold
their approvale of the experts or the Scope of Work for the Risk Aanalysis; PROVIDED
HOWEVER, the Scope of Work will be limited to analyses reasonably necessary to provide
reasonable assurances that Workover Operations similar to the Workover Operations described
in Exhibit 1 will not cause or contribute to any violations of any applicable groundwater quality
standards. The experts shall prepare a Risk Analysis Report and submit the Report to the
Department within one year six months of the effective date of this Order. The Report shall rely
upon existing data, pertinent scientific literature and available site specific information.
16. Upon receipt of the Report, the Department shall review the Report and in a timely
manner determine whether it provides reasonable assurances that Workover Operations similar
to the Workover Operations described in Exhibit 1 will not 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 the Department is permitted by law to require.

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If the Company believes that any request for additional information is unjustified, or seeks
information the Department is not permitted by law to require, the Department, at the request of
the Company, shall proceed to evaluate the Report. The Department shall determine whether the
Report provides reasonable assurances that Workover Operations similar to the Workover
Operation described in Exhibit 1 will cause or contribute to any violations of any applicable
groundwater quality standards within 90 days of the receipt of the Report or any timely requested
additional information. If the Department fails to make such a determination within the stated
time frame, the Report shall be deemed to be accepted by the Department as reasonable
assurances that Workover Operations similar to the Workover Operations described in Exhibit 1
will not cause or contribute to any violation of any applicable groundwater quality standard, and
the Company will no longer be subject to the prohibition against Workover Operations similar to
the Workover Operations described in Exhibit 1 set forth in paragraph 17, below. The
Departments determination shall be agency action subject to challenge pursuant to Sections
120.569 and 120.57, Florida Statutes. The Department hereby agrees to provide written notice of
any such determination to the Company and also agrees that the Companys substantial interests
will be affected by the Departments determination as to whether or not the Report provides
reasonable assurances that Workover Operations similar to the Workover Operation described in
Exhibit 1will or will not cause or contribute to any violations of any applicable groundwater
quality standards. In addition, the Department hereby waives any objection it may otherwise
have had that the Company lacks standing to challenge any such determination by the
Department.
175. All No future Workover Operations similar to the Workover Operation described in
Exhibit 1 shall be implemented at any of for the Companys wells (existing and proposed under
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valid permits) shall not be implemented by the Company until the Workover Operations have
been reviewed and approved by the Department. This review and approval process shall remain
in place only until the Risk Analysis Report described in paragraph 15 above is submitted to the
Department, and the Department determines that the Risk Analysis Report provides reasonable
assurance that Workover Operations similar to the Workover Operation described in Exhibit 1
will not cause or contribute to any violations of any applicable no groundwater quality standards
contamination will occur from implementing procedures similar to the Workover Operation
described in Exhibit 1. The Department agrees to expeditiously review and respond to any
Workover notifications received from the Company, and shall either approve, deny or request
additional information regarding each Workover notification within thirty (30) days of receipt of
such notice. If the Department fails to approve, deny or request additional information within
thirty (30) days of receipt of a Workover notification, the Workover shall be deemed approved.
Notwithstanding anything contained in this Consent Order to the contrary, if at any time the
Department allows anyone else to conduct Workover Operations similar to the Workover
Operations described in Exhibit 1, the Company shall cease to be bound by the prohibition
contained in this paragraph.
186. 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
reasonable assurance that the Workover Operation does not affect the groundwater above the
Underground Source of Drinking Water (USDW) line. The Plan shall be developed and
executed at the expense of the Company. The Plan shall include at a minimum: (a) a one-time
analytical sampling of the flowback material prior to its final disposal. The analyses to be
performed shall be based on the materials that are were introduced into the Well by the

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Workover Operation and compared against established groundwater standards; i.e., the
parameters to be analyzed shall be those parameters that are present in the materials introduced
into the Well by the Workover Operation in concentrations exceeding any primary or secondary
drinking water standard. (b) installation of a series of four shallow observation wells, placed at
the NW, NE, SW, SE corners of the pad. The observation wells shall be designed to test the
extent of the Surficial Aquifer System, i.e. 145 feet; (c) installation of a one new deeper
groundwater monitoring well on the pad and southwest of the subject well to a depth equal to the
base of USDW. The exact depth of the deeper groundwater monitoring well will be established
based on the location of where the total dissolved solids is 10,000 ppm as determined by a suite
of logs run by the Company during drilling; (d) sampling and analyses of all wells for the
parameters found in the stimulation injection fluids in concentrations exceeding any primary or
secondary drinking water standard as defined by the Material Safety Data Sheets (MSDS) in
paragraph 10 above; (e) sampling and analyses of all observation and monitoring wells on a
quarterly basis for five (5) years from the date upon which the Department approves the
groundwater monitoring plan the life of the permit; (f) an inventory of freshwater supply wells
within a quarter mile buffer of the well bore hole; and (g) a schedule for implementing the Plan.
197. 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.



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WITHDRAWAL OF FINAL ORDER
20. In consideration of the mutual agreements set forth in this Consent Order, the
Department agrees to withdraw the Final Order Requiring Operations at Well 20-3H Cease and
Desist, and the same is hereby withdrawn.
SETTLEMENT OF ALL DISPUTES
21. This Consent Order is in settlement of all disputes between the Company and the
Department, and upon entry of this Consent Order, the Department and the Company shall
proceed to conduct all interactions with one another in a fair, mutually respectful and productive
manner.
CONFIDENTIALITY
2219. 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
230. 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.
241. 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
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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 Companys 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
contractors late performance was also beyond the contractors 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 Companys right to request an
extension of time for compliance with the requirements of this Consent Order.
252. 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.
263. 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

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comply with the terms of this Consent Order shall constitute a violation of Section
403.161(1)(b), F.S.
274. All submittals and payments required by this Consent Order to be submitted to the
Department shall be sent to the Deputy Director of Beach Management, Mining & ERP, Division
of Water Resource Management, Florida Department of Environmental Protection, 3900
Commonwealth Blvd., MS 300, Tallahassee, FL 32303.
285. 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.
296. This Consent Order is a settlement of the Departments 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.
3027. 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
3128. 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.

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3229. 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 Departments 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 petitioners representative, if any, which shall be the
address for service purposes during the course of the proceeding;
c) An explanation of how the petitioners 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.

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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. A copy of the petition must also be mailed at the time of filing to the District Office
at the address indicated in Paragraph 35. Failure to file a petition within the 21-day period
constitutes a persons 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 persons right 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:


________________________ __________________________
DATE NAME

__________________________
TITLE

__________________________
COMPANY

__________________________
ADDRESS


DONE AND ORDERED this day of , 2014, in ,
Florida.



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STATE OF FLORIDA DEPARTMENT
OF ENVIRONMENTAL PROTECTION


____________________________



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

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