BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

REPORT OF COMMISSION

                        This cause came on for hearing before the Commission on August 8, 2011, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order seeking a variance from the financial assurance requirements found in Rule 706.

FINDINGS

The Commission finds as follows:

1.     Sandlin Oil Corporation (“Sandlin Oil”), as applicant herein, is an interested party in the subject matter of the above‑referenced hearing.

2.     Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

3.     The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order pursuant to the Oil and Gas Conservation Act.

4.     Rule 706. of the Rules and Regulations of the Oil and Gas Conservation Commission requires, in pertinent part, that an operator shall provide financial assurance to the Commission to ensure the protection of the soil, the proper plugging and abandonment of the well, and the reclamation of the site in accordance with law, in the amount of sixty thousand dollars ($60,000) for statewide blanket financial assurance.

5.     On May 19, 2011, Sandlin, by its President, submitted an application (the “Application”) for an order seeking a variance from the financial assurance requirements found in Rule 706.

                        6.  On August 8, 2011 the Commission heard this matter.  Sandlin President, Gary Sandlin appeared and testified, explaining the rationale for his request. Staff took no position in the matter.  The Commission was satisfied that the intent of the financial assurance requirements of Rule 706 would still be satisfied if the Application was approved.

7.     Based on the facts stated in the verified Application, having received no protests, and based on the testimony at the hearing, the Commission should enter an order granting a variance from the financial assurance requirements found in Rule 706.

ORDER

NOW, THEREFORE IT IS ORDERED, that Sandlin Oil Corporation is hereby granted a variance to Rule 706, in that Sandlin may satisfy a portion of the financial assurance requirements of Rule 706. by providing an Open-Ended or Perpetual Letter of Credit in favor of the Commission for a total financial assurance in the amount otherwise required by Rule 706.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective immediately.

IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this Order to be final agency action for purposes of judicial review within 30 days after the date this Order is mailed by the Commission.

IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

                        ENTERED this    12^th   day of August, 2011, as of August 8, 2011.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By____________________________________    

                                                                                    Robert A. Willis, Acting Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

August 12, 2011