IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE EXEMPTION FROM BONDING REQUIREMENTS OF RULE 304 OF THE OIL AND GAS CONSERVATION COMMISSION RULES AND REGULATIONS ARCHULETA COUNTY, COLORADO

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CAUSE NO. 1

ORDER NO. 1-4 (Formerly 1-68)

REPORT OF THE COMMISSION

This cause came on for hearing for before the Oil and Gas Conservation Commission on April 18, 1988 at 9:00 a.m.; in Room 110, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the request of Raymond Shahan and Betty L. Shahan to be exempt from the bonding requirements a provided for in Rule 304 for well Osterhoudt No. 1 - Schmitz and Shafer, Crowley Heirs, located approximately 2,809 f feet FNL and 1,152 feet FEL of Section 7 and well Osterhoudt No. 2 - Yeakley, Crowley Heirs, located approximately 2,200 feet south and 800 feet west of the surveyed northeast corner of Section 7, both in Township 32 North, Range 2 East N.M.P.M. Archuleta County, Colorado.

FINDINGS

1. Raymond Shahan and Betty L. Shahan, as applicants, are 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.

4. The gas from said wells, of extremely low volume, is to be used for domestic purposes on the Shahan’s property.

5. The Shahans, as owners of the wells, should assume full liability relating to the production of gas from said wells as well as the responsibilities to properly plug and abandon the wells at such time as production is no longer available.

6. Security in the sum of not less than five hundred ($500.00) dollars should be posted with the Oil and Gas Conservation Commission.

7. The Shahans should record this Order with the Clerk and Recorder of Archuleta County, Colorado.

ORDER

NOW THEREFORE IT IS ORDERED, that Raymond Shahan and Betty L. Shahan shall post security with a the Oil and Gas Conservation Commission in the sum of not less than five hundred ($500.00) dollars for operation of well Osterhoudt No. 1-Schmitz and Shafer, Crowley Heirs, located approximately 2,809 feet FNL and 1,152 feet FEL of Section 7 and well Osterhoudt No. 2-Yeakley, Crowley Heirs, located approximately 2,200 feet south and 800 feet west of the surveyed northeast corner of Section 7, both in Township 32 North, Range 2 East, N.M.P.M., Archuleta County, Colorado.

IT IS FURTHER ORDERED that the Shahans shall assume full liability relating to the production of gas from said wells and the responsibility to properly plug and abandon said wells at such time as production is no longer available.

IT IS FURTHER ORDERED that the Shahans shall record this Order with the Clerk and Recorder of Archuleta County, Colorado.

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

Entered this second day of May, 1988, as of April 18, 1988.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Dennis R. Bicknell, Secretary