BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES               )                                 CAUSE NO. 1V

AND REGULATIONS OF THE COLORADO OIL AND GAS                      )

CONSERVATION COMMISSION BY ENCANA OIL & GAS (USA) INC.,)                                 DOCKET NO. 0411-OV-35

GARFIELD COUNTY, COLORADO                                                                )

TO ALL INTERESTED PARTIES AND TO WHOM IT MAY CONCERN:

                On March 19, 2001, the COGCC approved an Application for Permit-to-Drill ("APD"), Form 2, for Coastal Oil & Gas Corporation to drill the Texaco Fee #1-25 Well located in the SW¼ NE¼ of Section 25, Township 6 South, Range 99 West, 6th P.M. This APD permitted the well for completion into the Sego Formation. The name was changed to the Texaco Fee #6213 Well. Subsequent operator EnCana recompleted the well to the Dakota, Mancos, Corcoran, and Williams Fork Formations without prior approval. This is a violation of Rule 303.b.

                On October 4, 1991, the COGCC approved an APD, Form 2, for LFC Gas Company to drill the Federal #14-1 Well located in the SE¼ NE¼ of Section 14, Township 6 South, Range 99 West, 6th P.M. This APD permitted the well for completion into the Dakota Formation. The name was changed to the Federal #6202 Well. Subsequent operator EnCana recompleted the well to the Williams Fork Formations without prior approval. This is a violation of Rule 303.b.

                On October 9, 1990, the COGCC approved an APD, Form 2, for North American Resources Company to drill the NARCO Federal #33-1 Well located in the NW¼ SE¼ of Section 1, Township 6 South, Range 100 West, 6th P.M. This APD permitted the well for completion into the Dakota Formation. The name was changed to the Cedar Bench Federal #6308 Well. Subsequent operator EnCana recompleted the well to the Rollins, Corcoran, Cozzette, and Williams Fork Formations without prior approval. This is a violation of Rule 303.b.

                On June 24, 1993, the COGCC approved an APD, Form 2, for LFC Gas Company to drill the Federal #26-12 Well located in the NW¼ SW¼ of Section 26, Township 6 South, Range 99 West, 6th P.M. This APD permitted the well for completion into the Sego Formation. The name was changed to the Federal #6205 Well. Subsequent operator EnCana recompleted the well to the Rollins, Corcoran, Cozzette, and Williams Fork Formations without prior approval. This is a violation of Rule 303.b.

                On June 2, 1981, the COGCC approved an APD, Form 2, for Nucorp Energy, Inc. to drill the Gasaway Federal #1-26 Well located in the SE¼ NE¼ of Section 26, Township 6 South, Range 100 West, 6th P.M. This APD permitted the well as a wildcat and was originally completed in the Dakota Formation. The name was changed to the Tate Federal #6211 Well. Subsequent operator EnCana recompleted the well to the Corcoran and Cozzette Formations without prior approval. This is a violation of Rule 303.b.

                On September 22, 1997, the COGCC approved an APD, Form 2, for Venoco, Inc. to drill the Texaco #25-2 Well located in the SE¼ NW¼ of Section 25, Township 6 South, Range 99 West, 6th P.M. This APD permitted the well for completion into the Lloyd Formation. The name was changed to the Texaco #6217 Well. Subsequent operator EnCana recompleted the well to the Sego, Rollins, Corcoran and Williams Fork Formations without prior approval. This is a violation of Rule 303.b.

                On September 15, 2002, the COGCC approved an APD, Form 2, for EnCana to drill the HMU 7-14 (N7) Well located in the NE¼ of Section 7, Township 8 South, Range 92 West, 6th P.M. This APD permitted the well for completion into the Corcoran Formation. EnCana recompleted the well to the Rollins and Williams Fork Formations without prior approval. This is a violation of Rule 303.b.

                On June 8, 2004, seven (7) Notices of Alleged Violation ("NOAVs") were issued to EnCana for violations of Rule 303.b., recompletions without a permit. The NOAVs required EnCana to submit a letter detailing the reason for not complying with Rule 303.b. The abatement date for the NOAV was June 25, 2004. On June 23 and June 24, 2004, COGCC staff received letters from EnCana in response to the NOAVs, explaining the reasons the wells were recompleted without obtaining prior approval.

                EnCana should be found in violation of Rule 303.b., failure to obtain an approved Application for Permit-to-Recomplete prior to recompletion, for seven (7) separate incidents. A monetary penalty of Five Thousand dollars ($5,000.00) should be assessed against EnCana, in accordance with Rule 523.d., for each violation of Rule 303.b., for a total of Thirty-Five Thousand dollars ($35,000). A mitigating factor in determining the fine recommendation under Rule 523.d.(1) is that the violations were self-reported. EnCana has submitted and COGCC staff has approved an Application for Permit-to-Recomplete, Form 2, for each of the well recompletions described above.

                NOTICE IS HEREBY GIVEN, that the Oil and Gas Conservation Commission of the State of Colorado, pursuant to the above, has scheduled the above-entitled matter for hearing on:

                Date:        Monday, November 29, 2004

                Time:        9:00 a.m.

                Place:       Suite 801, The Chancery Building

                                  1120 Lincoln Street

                                  Denver, CO 80203

                In accordance with the Americans with Disabilities Act, if any party requires special accommodations as a result of a disability for this hearing, please contact Angie Gipson at (303) 894-2100 ext. 113, prior to the hearing and arrangements will be made.

                Pursuant to said hearing in the above-entitled matter at the time and place aforesaid, or at any adjourned meeting, the Commission will enter such orders as it deems appropriate to protect the health, safety and welfare of the public and to prevent the waste of oil and gas, either or both, in the operations of said field, and to carry out the purposes of the statute.

                In accordance with Rule 509., any interested party desiring to protest the granting of the application or to intervene on the application should file with the Commission a written protest or intervention no later than November 15, 2004, briefly stating the basis of the protest or intervention. Such interested party shall, at the same time, serve a copy of the protest or intervention to the person filing the application. An original and nine (9) copies shall be filed with the Commission (Rule 503.f.). Anyone who files a protest or intervention must be available to participate in a prehearing conference during the week of November 15, 2004. Pursuant to Rule 503.e., if a party who has received notice under Rule 503.b. wishes to receive further pleadings in the above-referenced matter, that party must file a protest or intervention in accordance with these rules.

                IN THE NAME OF THE STATE OF COLORADO

                                                                    OIL AND GAS CONSERVATION COMMISSION

                                                                    OF THE STATE OF COLORADO

                                                                    By______________________________________

                                                                    Patricia C. Beaver, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

November 8, 2004