RECORD OF PROCEEDINGS

January 8, 2001

The Oil and Gas Conservation Commission met on January 8, 2001 at 8:30 a.m. at the Chancery Building, 1120 Lincoln Street, Denver, Colorado, for a hearing in Cause Nos. 1 (2 matters), 232, (3 matters), 388 (1 matter) and Cause No. 517 (3 matters).

Those present were:

Steve Sonnenberg           Chair

Daniel Skrabacz               Vice Chair

Bruce Johnson                 Commissioner

Michael Klish                    Commissioner

Tom Ann Casey               Commissioner

Brian Cree                        Commissioner

Abe Phillips                      Commissioner

Carol Harmon                   Assistant Attorney General

Richard Griebling             Director

Brian Macke                     Deputy Director

Patricia Beaver                Hearings Manager

Director’s Report: Director Griebling provided a written report and discussed the following: Staff processed 1,529 Applications for Permit-to-Drill ("APDs") in 2000, 1,010 more than in 1999. COGCC staff will no longer regulate Class II injection wells south of the Ute line to avoid duplication with the EPA who has primacy over UIC wells on tribal lands. The 3M CBM Model Final Report is now available on the COGCC web site.

Executive Director’s Report: DNR Executive Director Greg Walcher discussed the following: Thanked Commissioners for the time and energy they have devoted to the high profile matters recently before the Commission; relayed Governor Owens’ thanks for the Commission’s hard work; stated changing the makeup of the Commission is not the answer to the problems citizens are concerned about; described the three components of the proposed legislation 1) property owner notification, 2) surface damages and 3) dormant oil and gas interests.

AG’s Report: AG Harmon informed the Commission that the Barrett order was not appealed.

Commissioner Comments: Commissioner Phillips attended the Colorado Oil and Gas Association ("COGA") lunch in November and does not agree with the letter Chair Sonnenberg wrote in opposition to speaker comments at the lunch. Commissioner Cree mentioned a reporter had contacted him regarding the conflict of interest bill.

Audience Comments: Ken Wonstolen, COGA, made the following comments: Stated Jim Dyer will run the conflict of interest bill again and a coordinated effort from DNR will be needed to defeat it; invited the Commissioners to attend a legislative reception on January 17 at 5 p.m. in the Grant-Humphries Mansion; believes the industry is waiting on changes to Rule 508 before filing applications affected by the rule. On January 10, COGA’s Board will be deciding their position on DNR’s proposed oil and gas legislation; they will not oppose the legislation but may not support it. Mr. Wonstolen presented the Commission with proposed language to be included on the APD Form 2.

Commissioner Skrabacz announced his resignation from the Commission after the March hearing due to family commitments. The other Commissioners stated their thanks to Commissioner Skrabacz for his work.

Commissioner Cree stated his desire for staff to communicate with the Commissioners on the last working day prior to a hearing if docketed matters will not be heard at the upcoming hearing.

Chair Sonnenberg stated that: AAG Harmon will review COGA’s language proposed to be added to the APD; staff should bring suggested changes for Rule 508. to the February hearing for an informal discussion; and a meeting to discuss staff participation in hearings will be held prior to the February hearing for discussion with the Commissioners at the hearing.

The hearing in Cause No. 517, Docket No. 0101-UP-04, request by Cedar Ridge, LLC to pool non-consenting interests in certain 160-acre units in Townships 30 & 31 South, Range 66 West, 6^th P.M., has been cancelled due to settlement between the parties.

The hearing in Cause No. 254, Docket No. 0101-SP-02, request by Renegade Oil and Gas Company to re-establish 320-acre drilling and spacing units for certain lands in Township 2 South, Range 62 West, 6^th P.M. and to suspend "J" Sand Formation production from the Habel #A-2 Well, has been continued to the February hearing to allow the applicant time to amend its application.

The hearing in Cause No. 1, Docket No. 0101-GA-01, City of Longmont’s request to designate certain lands in the E½ of Section 7 and the W½ SW¼ of Section 8, both in Township 2 North, Range 68 West, 6^th P.M., as an outside activity area under Rule 603.b., has been continued to the March hearing. A field tour of the application lands has also been continued to the March hearing.

The hearing in Cause No. 1, Docket No. 0012-GA-09, request by TOP Operating Company to determine the Director’s authority to administratively place directional drilling conditions on drilling permits, has been continued to the March hearing.

The Commission unanimously approved the Consent Agenda, which included the following:

Cause Nos. 1 and 232, Docket No. 0101-SP-01, Mountain Petroleum Corporation, request to establish a 160-acre exploratory unit for the "D" Sand Formation, to pool non-consenting interests for development and operation of the "D" and "J" Sand Formations, and to grant an exception well location in Section 26, Township 1 North, Range 65 West for production from the "J" Sand Formation.

Cause No. 517, Docket No. 0101-UP-01, Cedar Ridge, LLC, request to pool non-consenting interests in the NW¼ of Section 5, Township 31 South, Range 66 West, 6^th P.M. for development and operation of the Raton and Vermejo Formations.

Cause No. 517, Docket No. 0101-UP-02, Cedar Ridge, LLC, request to pool non-consenting interests in certain 160-acre units in Sections 21, 22, 25 & 33, Township 30 South, Range 66 West, 6^th P.M. for development and operation of the Raton and Vermejo Formations.

Cause No. 517, Docket No. 0101-UP-03, Cedar Ridge, LLC, request to pool non-consenting interests in the NW¼ of Section 1, Township 31 South, Range 66 West, 6^th P.M. for development and operation of the Raton and Vermejo Formations.

Cause No. 232, Docket No. 0101-SP-03, Petroleum Development Corporation, request to segregate the 320-acre drilling and spacing unit consisting of the S½ of Section 9, Township 5 North, Range 67 West, 6^th P.M. into two 160-acre drilling and spacing units consisting of the SW¼ and the SE¼ of said Section 9 for production from the "J" Sand Formation.

Cause No. 232, Docket No. 0101-SP-04, Petroleum Development Corporation, request to segregate the 320-acre drilling and spacing unit consisting of the S½ of Section 17, Township 5 North, Range 67 West, 6^th P.M. into two 160-acre drilling and spacing units consisting of the SW¼ and the SE¼ of said Section 17 for production from the "J" Sand Formation.

Cause No. 388, Docket No. 0101-AW-01, Ellora Energy, LLC, request to drill a second well in the 640-acre unit consisting of Section 21, Township 19 South, Range 47 West, 6^th P.M. for production of oil from the Middle Morrow Sand Formation.

Cause No. 1, Docket No. 0101-OV-01, request to approve an Administrative Order by Consent finding Amoco Production Company in violation of Rule 303.a., failure to obtain an approved drilling permit prior to construction of two well sites, and assess a total fine of Two Thousand Dollars ($2,000).

A discussion was held on the February field tour, reception and hearing in Trinidad. Commissioner Phillips requested information on the Las Animas County Commissioners prior to the reception.

A motion to go into and come out of Executive Session was approved unanimously. In Executive Session, a discussion was held on a letter sent by the Citizens Oil and Gas Support Center asking for personal disclosure from the Commissioners.

The Commission directed COGCC staff to pursue Allen Oil and Gas, LLC for money expended from the Environmental Response Fund to plug, abandon and reclaim Allen’s wells.

The meeting adjourned at 11:25 a.m.

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The Secretary was therefore authorized to issue the following orders:

Order No. 1V-206, La Plata County: Approves the Order Finding Violation finding Amoco Production Company in violation of Rule 303.a., failure to obtain an approved drilling permit prior to construction of two well sites, and assesses a total fine of Two Thousand Dollars ($2,000).

Order Nos. 1-91 and 232-232, Wattenberg Gas Spaced Area, Weld County: Approves the request to establish a 160-acre exploratory unit for the "D" Sand Formation, to pool non-consenting interests for development and operation of the "D" and "J" Sand Formations, and to grant an exception well location in Section 26, Township 1 North, Range 65 West for production from the "J" Sand Formation.

Order No. 232-233, Wattenberg Gas Spaced Area, Weld County: Approves the request to segregate the 320-acre drilling and spacing unit consisting of the S½ of Section 9, Township 5 North, Range 67 West, 6^th P.M. into two 160-acre drilling and spacing units consisting of the SW¼ and the SE¼ of said Section 9 for production from the "J" Sand Formation.

Order No. 232-234, Wattenberg Gas Spaced Area, Weld County: Approves the request to segregate the 320-acre drilling and spacing unit consisting of the S½ of Section 17, Township 5 North, Range 67 West, 6^th P.M. into two 160-acre drilling and spacing units consisting of the SW¼ and the SE¼ of said Section 17 for production from the "J" Sand Formation.

Order No. 388-7, Nee Noshe Field, Kiowa County: Approves the request to drill a second well in the 640-acre unit consisting of Section 21, Township 19 South, Range 47 West, 6^th P.M. for production of oil from the Middle Morrow Sand Formation.

Order No. 517-4, Las Animas County: Approves the request to pool non-consenting interests in the NW¼ of Section 5, Township 31 South, Range 66 West, 6^th P.M. for development and operation of the Raton and Vermejo Formations.

Order No. 517-5, Las Animas and Huerfano Counties: Approves the request to pool non-consenting interests in certain 160-acre units in Sections 21, 22, 25 & 33, Township 30 South, Range 66 West, 6^th P.M. for development and operation of the Raton and Vermejo Formations.

Order No. 517-6, Las Animas County: Approves the request to pool non-consenting interests in the NW¼ of Section 1, Township 31 South, Range 66 West, 6^th P.M. for development and operation of the Raton and Vermejo Formations.

Signed:

Patricia C. Beaver, Secretary

Approved:

Stephen Sonnenberg, Chair