DENBURY ONSHORE, LLC — Notice of Probable Violation

220055007_Final Order_11282005.pdf, page 1Official PDF@ Washington, D.C. 20590 ffi400 Seventh Slre€|, S.W. Hqzordous tltofedoB Sofefy Admlni3trollon NOV zg m6 Mr. Mark Wonhey Vice President of Operations Denbury Onshore, L.L.C. 5 I 00 Tennyson Parkway, Suite 3 000 Plano,TX74024 RE: CPF No, 2-2005-5007 Dear Mr. Worthey: Enclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in theabove-referencedcase. Itmakesafindingofviolationandassessesacivilpenaltyof$23,250. I acknowledge receipt of, and accept payment dated June 1,2005 in the amount of $23,250 as payment in full of the civil penalty assessed against Denbury Onshore, L.L.C. in the Final Order. This case is now closed. Your receipt of the Final Order constitutes service of that document under 49 C.F.R. g 190.5. Sincerely, +*""" /L- James Reyrolds Pipeline Compliance Regisky Office of Pipeline Safety Enclosure Ms. Linda Daugherty, Director, OPS Southem Region CERTIFIED MAIL - RETURN RECEIPT REOUESTED apJa-^,A#

220055007_Final Order_11282005.pdf, page 2DEPARTMENT OF' TRANSPORTATION PIPELINE AIID HAZARDOUS MATERIALS SAF'ETY ADMINISTRATION OFFICE OF' PIPELINE SAFETY WASIIINGTON. D.C. 20590 In the Matter of Denbury Onshore, L.L.C., ) ) ) ) CPFNo. 2-2005-5007 FINAL ORDER From August 30,20O41o Septernber 3,2004, pursuant to 49 U.S.C. $ 601 17, arepresentative of the Office of Pipeline Safety (OPS), Southern Region conducted an on-site pipelini safety inspection of Respondent's North East Jackson Dome (NEJD) pipeline facilities in Miisissippi. As a result of the inspection, the Director, Southem Region, OPS, issued to Respondent, by letter dated May 1 l, 2005, a Notice of Probable Violafion and Proposed Civil Penalty (Notice). In accordance with 49 C.F.R. $ 190-207, the Notice proposed finding that Respondent had committed violations of 49 C.F.R. Part 195 and proposed assessing a civil penalty of $23,250 for the alleged violations. Respondent responded to the Notice by letter dated June 9, 2005 (Response). Respondent did not contest the allegation ofviolation, but offered information to explain the allegations and provided information conceming the corrective actions it has taken. Respondent dla not request u h"*irrg, and therefore has waived the risht to one. FINDINGS OF'VIOLATION Uncontested Respondent did not contest the alleged violations in the Notice. Accordingly, I find that Respondent violated 49 c.F.R. Part 195, as more fully described in the Notice: 49 C.F.R. $195.403 (a)1-5 and (b) 1-2 *failure to provide records to demonstrate that each employee's performance in meeting the objectives of the emergency response training was accomplished at intervals not exceeding l5 months, but at least once each calendar year. 49 C.F.R. $i 95.a03(c) - fajiure to demonstrate that the supervisors' knowledge of emergency response procedures for which they are responsible has been maintained and verified.#

220055007_Final Order_11282005.pdf, page 349 C.F.R. 9195.420(a) and O) - failure to provide valve inspection records to dernonstrate that all 2l designated mainline valves in Mississippi were in good working order at all times. Respondent's valve inspection records show 14 valve inspections were not completed in the first half of 2003 and 2 valve inspections were not completed in the second half of 2003. These findings ofviolation will be considered prior offenses in any subsequent enforcernent action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. S 60122, Respondent is subject to a civil penalty not to exeeed $100,000 per violation for each day of the violation up to a maximum of $ 1 ,000,000 for any related series of violations. TheNoticeproposedatotalcivilpenaltyof$23,250forviolationsof49C.F.R.Partl95. 49 U.S.C. $ 60122 and 49 C.F.R. $ 190.225 require that, in determining the amount of the civil penalty, I consider the following criteria: nature, circumstances, and gravity ofthe violation, degree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability to pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondent's ability to continue in business, and such other matters as jusfice may require. Item I ofthe Notice proposed a civil penalty of$5,000, as Respondent failed to provide records to demonstrate that each employee's performance inmeeting the objectives ofthe emergencyresponse training was accomplished, at intervals not exceeding 15 months, but at least once each calendar year, as required by 49 C.F.R. $195.403 (a)l-5 and O) 1-2. Respondent did not contest the allegation of violation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of$5,000, already paid by the Respondent for violation. Item 2 ofthe Notice proposed a civil penalty of$5,000, as Respondent failed to provide records to demonstrate that the supervisors' knowledge of emergency response procedures for which they are responsible has been maintained and verified, as required by 49 C.F.R. g195.403(c). Respondent did not contest the allegation ofviolation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondenta civil penaltyof$5,000, alreadypaidbytheRespondent for violation. Item 3 of the Notice proposed a civil penalty of $13,250, as Respondent failed to provide valve inspection records to demonstratethataTl2l designated mainline valves in Mississippi wereingood working order at all times, as required by 49 C.F.R. g195.a20(a) and (b). Respondent's valve inspection records show l4 valve inspections were not completed in the first half of2003 and 2 valve inspections were not completed in the second half of 2003. Respondent did not contest the allegation of violation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penaltyof$ 13,250, alreadypaidbythe Respondent forviolation.#

220055007_Final Order_11282005.pdf, page 4WARNINGITEMS The Notice did not propose a civil penalty or compliance action for Items 4,5, and 6 in the Notice; therefore, these are considered waming items. Respondent is warned that if it does not take appropriate action to correct these items, enforcsment action will be taken if a subsequent inspection reveals a violation. The terms and conditions of this Final Order are effective on receipt. Nov 2 8 m05 Date Issued l l N"#

Final Order Denbury Onshore LLC CPF No 2-2005-5007.pdf, page 1Official PDFUS. Department of Transportation Pipeline and Hazardous Materials Safety Administration 400 Seventh Street, S.W. Washington, D.C. 20590 Mr. Mark Worthey Vice President of Operations Denbury Onshore, L.L.C. 5 1 00 Tennyson Parkway, Suite 3 000 Plano, TX 74024 RE: CPF NO. 2-2005-5007 Dear Mr. Worthey: Enclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in the above-referenced case. It makes a finding of violation and assesses a civil penalty of $23,250. I acknowledge receipt of, and accept payment dated June 1,2005 in the amount of $23,250 as payment in full of the civil penalty assessed against Denbury Onshore, L.L.C. in the Final Order. This case is now closed. Your receipt of the Final Order constitutes service of that document under 49 C.F.R. $ 190.5. Sincerely, James Reynolds Pipeline Compliance Registry Office of Pipeline Safety Enclosure cc: Ms. Linda Daugherty, Director, OPS Southern Region CERTIFIED MAIL - RETURN RECEIPT REOUESTED#

Final Order Denbury Onshore LLC CPF No 2-2005-5007.pdf, page 2DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 1 In the Matter of 1 Denbury Onshore, L.L.C., ) ) CPF NO. 2-2005-5007 1 Respondent. FINAL ORDER From August 30,2004 to September 3,2004, pursuant to 49 U.S.C. 5 601 17, a representative of the Office of Pipeline Safety (OPS), Southern Region conducted an on-site pipeline safety inspection of Respondent's North East Jackson Dome (NEJD) pipeline facilities in Mississippi. As a result of the inspection, the Director, Southern Region, OPS, issued to Respondent, by letter dated May 1 1, 2005, a Notice of Probable Violation and Proposed Civil Penalty (Notice). In accordance with 49 C.F.R. 5 190.207, the Notice proposed finding that Respondent had committed violations of 49 C.F.R. Part 195 and proposed assessing a civil penalty of $23,250 for the alleged violations. Respondent responded to the Notice by letter dated June 9,2005 (Response). Respondent did not contest the allegation of violation, but offered information to explain the allegations and provided information concerning the corrective actions it has taken. Respondent did not request a hearing, and therefore has waived the right to one. FINDINGS OF VIOLATION Uncontested Respondent did not contest the alleged violations in the Notice. Accordingly, I find that Respondent violated 49 C.F.R. Part 195, as more fully described in the Notice: 49 C.F.R. 5 1 95.403 (a) 1 -5 and (b) 1-2 -failure to provide records to demonstrate that each employee's performance in meeting the objectives of the emergency response training was accomplished at intervals not exceeding 15 months, but at least once each calendar year. 49 C.F.R. $195.403(c) - failure to demonstrate that the supervisors' knowledge of emergency response procedures for which they are responsible has been maintained and verified.#

Final Order Denbury Onshore LLC CPF No 2-2005-5007.pdf, page 349 C.F.R. $ l95.42O(a) and (b) - failure to provide valve inspection records to demonstrate that all 2 1 designated mainline valves in Mississippi were in good working order at all times. Respondent's valve inspection records show 14 valve inspections were not completed in the first half of 2003 and 2 valve inspections were not completed in the second half of 2003. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. $ 60122, Respondent is subject to a civil penalty not to exceed $100,000 per violation for each day of the violation up to a maximum of $1,000,000 for any related series of violations. The Notice proposed a total civil penalty of $23,250 for violations of 49 C.F.R. Part 195. 49 U.S.C. 9 60122 and 49 C.F.R. 5 190.225 require that, in determining the amount of the civil penalty, I consider the following criteria: nature, circumstances, and gravity of the violation, degree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability to pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondent's ability to continue in business, and such other matters as justice may require. Item 1 of the Notice proposed a civil penalty of $5,000, as Respondent failed to provide records to demonstrate that each employee's performance in meeting the objectives of the emergency response training was accomplished, at intervals not exceeding 15 months, but at least once each calendar year, as required by 49 C.F.R. $195.403 (a)l-5 and (b) 1-2. Respondent did not contest the allegation of violation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $5,000, already paid by the Respondent for violation. Item 2 of the Notice proposed a civil penalty of $5,000, as Respondent failed to provide records to demonstrate that the supervisors' knowledge of emergency response procedures for which they are responsible has been maintained and verified, as required by 49 C.F.R. $ l95.403(c). Respondent did not contest the allegation of violation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $5,000, already paid by the Respondent for violation. Item 3 of the Notice proposed a civil penalty of $13,250, as Respondent failed to provide valve inspection records to demonstrate that a11 2 1 designated mainline valves in Mississippi were in good working order at all times, as required by 49 C.F.R. $195.420(a) and (b). Respondent's valve inspection records show 14 valve inspections were not completed in the first half of 2003 and 2 valve inspections were not completed in the second half of 2003. Respondent did not contest the allegation of violation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $13,250, already paid by the Respondent for violation.#

Final Order Denbury Onshore LLC CPF No 2-2005-5007.pdf, page 4WARNING ITEMS The Notice did not propose a civil penalty or compliance action for Items 4,5, and 6 in the Notice; therefore, these are considered warning items. Respondent is warned that if it does not take appropriate action to correct these items, enforcement action will be taken if a subsequent inspection reveals a violation. The terms and conditions of this Final Order are effective on receipt. Date Issued for Pipeline Safety#