IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES AND REGULATIONS OF THE COLORADO OIL AND GAS CONSERVATION COMMISSION BY OILFIELD SALVAGE & SERVICE COMPANY, ARAPAHOE COUNTY, COLORADO Cause No. 1V, 1 Order No. 1V-113

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 5, 1996, at 8:30 a.m., in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing as required by law, on why Oilfield Salvage & Service Company is not in violation of Rule No. 603.g., requiring all locations, including wells and surface production facilities, be kept free of equipment, vehicles, weeds, rubbish, supplies and other waste materi al not necessary for use on that lease; and Rule No. 908.e., requiring the remediation of oily soil, of the Oil and Gas Conservation Commission, and why it should not invoke the provisions of 34-60-121 C.R.S., as amended, providing for penalties for violations of the Rules and Regulations of the Commission.

FINDINGS

The Commission finds as follows:

1. Oilfield Salvage & Service Company, 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.

4. On March 3, 1996, COGCC staff engineer Robbins inspected the JoAnn No. 1 Well and the Vince No. 1 Well located in the NE1/4NE1/4 and SW1/4NE1/4 of Section 31, Township 4 South, Range 63 West, 6th P.M. Both wellsite locations were found to have equipment and supplies not necessary for use on the lease in violation of Rule 603.g.

5. On April 18, 1996, COGCC staff received a letter from Oilfield Salvage & Service Company stating a number of reasons why the work being requested should not and/or would not be done.

6. On May 1, 1996, the site was re-inspected by COGCC staff engineer Robbins. Several items requested on the March 3, 1996 inspection report had been addressed although junk at the wellsites still had not been removed. The Vince No. 1 Well was additionally cited for violation of Rule 908.e. due to an oil spill around the wellhead. The operator was sent a copy of the field inspection report requiring corrective action by June 15, 1996.

5. On June 3, 1996, COGCC staff engineer Robbins responded to Oilfield Salvage & Service Company's April 18, 1996 letter. The response stated that an inspection had been done on May 1, 1996 and found that the junk at the wellsites had not been removed nor had the oil saturated soil around the wellhead been remediated as required. The response further stated that Oilfield Salvage & Service Company was in violation of Rule 603.g. and reiterated the June 15, 1996 deadline for corrective action of both alleged violations.

6. On June 18, 1996, COGCC staff received another letter from Oilfield Salvage & Service Company again stating a number of reasons why the work being requested should not and/or would not be done.

7. On June 24, 1996, two (2) Notices of Alleged Violation (NOAVs) were sent to Oilfield Salvage & Service Company alleging violations of Rule Nos. 603.g. and 908.e., requiring removal of the equipment and supplies not necessary for lease operation and remediation of the oil saturated soil by July 8, 1996.

8. On July 15, 1996, COGCC staff engineer Robbins re-inspected the wellsites and found them in the same condition as the previous inspections.

9. An order of the Commission should be entered finding that Oilfield Salvage & Service Company is in violation of Rule No. 603.g., requiring all locations, including wells and surface production facilities, be kept free of equipment, vehicles, weeds, rubbish, supplies and other waste material not necessary for use on that lease; and Rule No. 908.e., requiring the remediation of oily soil, and assessing a fine of Two Thousand Dollars ($2,000).

O R D E R

NOW, THEREFORE, IT IS ORDERED, that Oilfield Salvage & Service Company is in violation of Rule No. 603.g., requiring all locations, including wells and surface production facilities, be kept free of equipment, vehicles, weeds, rubbish, supplies and other waste material not necessary for use on that lease; and Rule No. 908.e., requiring the remediation of oily soil, for the JoAnn No. 1 Well and the Vince No. 1 Well located in the NE1/4NE1/4 and SW1/4NE1/4 of Section 31, Township 4 South, Range 63 West, 6th P.M.

IT IS FURTHER ORDERED, that Oilfield Salvage & Service Company shall be assessed a total fine of Two Thousand Dollars ($2,000), payable within thirty (30) days of the date the order is entered.

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

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.

ENTERED this day of September, 1996, as of September 5, 1996.

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 March 25, 1997 ??

(1V#113)