IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES          CAUSE NO. 1
AND REGULATIONS OF THE COLORADO OIL AND GAS
CONSERVATION COMMISSION BY PLENERGY                               ORDER NO. 1V-131
DEVELOPMENT LTD., ADAMS COUNTY, COLORADO

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 21, 1997, 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 Plenergy Development Ltd. is in violation of Rule 319.b.(3), failure to obtain Director approval for continuing shut-in status, and Rule 326.b., failure to perform a mechanical integrity test within two (2) years of initial shut-in date for the United Bank of Denver #3 Well located in the NE¼ SW¼ of Section 14, Township 1 South, Range 67 West, 6th P.M., 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. Plenergy Development Ltd. 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 September 2, 1996, COGCC staff conducted a routine inspection of the United Bank of Denver #3 Well located in the NE¼ SW¼ of Section 14, Township 1 South, Range 67 West, 6th P.M. The well was determined to be incapable of production as a result of the surface production equipment being removed. On September 6, 1996, COGCC staff issued a Notice of Alleged Violation (NOAV) to Plenergy Development Ltd. ("Plenergy") for the United Bank of Denver #3 Well. The NOAV cited violation of Rule 319.b.(3), failure to obtain Director approval for continuing shut-in status and Rule 324.b., failure to perform a mechanical integrity test within two (2) years of initial shut-in date. Commission records indicate that the well has not produced since November 1994. The NOAV specified an abatement date of March 5, 1997. Per return receipt, the NOAV was accepted on September 10, 1996. On February 4, 1997, COGCC staff contacted Mr. Bob Baker with Plenergy by telephone. Mr. Baker was reminded of the available options and upcoming compliance deadline for the well. On February 19, 1997, in a telephone conversation with Mr. Baker, COGCC staff granted a sixty (60) day extension until May 5, 1997. Mr. Baker indicated the well had a casing leak within the interval of 3,800-4,000’. The extension would give him additional time to evaluate new methods of repairing the casing leaks in the well. On May 7, 1997, Mr. Baker requested plugging orders for the United Bank of Denver #3 Well. Mr. Baker indicated the well would be plugged within thirty (30) days. On June 6, 1997, COGCC staff inspected the well and found it was still in noncompliance. On June 10, 1997, COGCC staff contacted Mr. Baker by telephone. He was informed that an Administrative Order of Consent (AOC) would be issued if the well was not brought into compliance immediately. Mr. Baker said the work would commence on Monday, June 16, 1997. On June 17, 1997, COGCC staff inspected the well and found it was still in noncompliance.

5. On June 19, 1997, an AOC was proposed to Plenergy. On August 21, 1997, the AOC was signed by Bob Baker, President of Plenergy.

6. An order of the Commission should be entered finding Plenergy in violation of Rule 319.b.(3)., failure to obtain Director approval for continuing shut-in status and Rule 326.b., failure to perform a mechanical integrity test within two (2) years of initial shut-in date for the United Bank of Denver #3 Well located in the NE¼ SW¼ of Section 14, Township 1 South, Range 67 West, 6th P.M., and assessing a fine of two thousand dollars ($2,000) payable within thirty (30) days from the date the order is issued.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that Plenergy Development Ltd. shall be found in violation of Rule 319.b.(3)., failure to obtain Director approval for continuing shut-in status and Rule 326.b., failure to perform a mechanical integrity test within two (2) years of initial shut-in date for the United Bank of Denver #3 Well located in the NE¼ SW¼ of Section 14, Township 1 South, Range 67 West, 6th P.M.

IT IS FURTHER ORDERED, that Plenergy Development Ltd. shall be assessed a fine of two thousand dollars ($2,000) payable within thirty (30) days from the date the order is issued.

IT IS FURTHER ORDERED, that Plenergy Development Ltd. shall be required to either: 1) perform a successful mechanical integrity pressure test; or 2) properly plug and abandon; or 3) return to production within thirty (30) days of the date the order is entered.

IT IS FURTHER ORDERED, that if Plenergy Development Ltd. does not comply with this Order, the Commission staff shall make a claim on the blanket plugging bond to properly plug and abandon the well. If plugging costs exceed the bond amount, Commission staff shall confiscate available equipment and tubulars for salvage.
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 12th day of November, 1997, as of October 21, 1997.

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 12, 1997

(1V#131)