IN THE MATTER OF ALLEGED VIOLATIONS OF THE CAUSE NO

IN THE MATTER OF ALLEGED VIOLATIONS OF THE          CAUSE NO. 1
RULES AND REGULATIONS OF THE COLORADO OIL
AND GAS CONSERVATION COMMISSION BY                     ORDER NO. 1V-165
C. H. FLETCHER EXPLORATION, INC.,                                   CORRECTED
PROWERS COUNTY, COLORADO

REPORT OF THE COMMISSION

This cause came on for hearing before the Colorado Oil and Gas Conservation Commission on December 3, 1998 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 C.H. Fletcher Exploration, Inc. is in violation of Rule 326.d. and why the Commission should not invoke the provisions of §34-60-121 C.R.S., as amended, to assess penalties for violations of the Rules and Regulations of the Commission.

FINDINGS

1. On November 12, 1996 Colorado Oil and Gas Conservation Commission (“COGCC”) staff sent a Notice of Alleged Violation (“NOAV”) to C. H. Fletcher Exploration, Inc. (“Fletcher”) for the Bamber #1 Well located in the NW¼ SE¼ of Section 15, Township 26 South, Range 46 West, 6th P.M. The NOAV cited a violation of Rule 326.b., all shut-in wells shall pass a mechanical integrity test (“MIT”). The abatement action required that the well be either put on production, pass a mechanical integrity test, or be plugged and abandoned. The NOAV had an abatement date of May 12, 1997.

2. On October 22, 1997 COGCC staff witnessed a MIT for the Bamber #1 Well. The well did not pass the mechanical integrity test.

3. On October 28, 1997 COGCC staff sent a NOAV to Fletcher for the Bamber #1 Well located in the NW¼ SE¼ of Section 15, Township 26 South, Range 46 West. The NOAV cited a violation of Rule 326.d., all wells shall maintain mechanical integrity, all wells which lack mechanical integrity shall be repaired or plugged and abandoned within six (6) months of failing a MIT. The abatement action required that the well be either repaired or plugged and abandoned. The NOAV had an abatement date of April 28, 1998.

4. On August 17, 1998 COGCC staff sent an Administrative Order by Consent (“AOC”) to Fletcher for the Bamber #1 Well. Per return receipt the AOC was received on August 20, 1998.

5. As of September 18, 1998, Fletcher has not notified the COGCC that the Bamber #1 Well has been either repaired or plugged and abandoned.

6. Staff learned before the hearing that Fletcher finally plugged and abandoned the Bamber #1 Well on October 27, 1998. At the time of the December hearing COGCC indicated that the Bamber #1 Well had been plugged and abandoned on October 27, 1998, nearly one (1) year after staff issued the October 28, 1996 NOAV, and six (6) months after the abatement date required therein.

7. The Director finds that Fletcher's failure to timely repair or plug and abandon the Bamber #1 Well waiting six months after the required abatement date is a violation of Rule 326.d. by Fletcher.

8. A monetary penalty of Two Thousand Dollars ($2,000.00) should be assessed against Fletcher for violation of Rule 326.d. in accordance with Rule 523.a. The base fine for violation of Rule 326.d. is One Thousand Dollars ($1,000.00) per day.

9. Per Rule 523.d. the Director considers the following to be aggravating factors to be used in determining the fine amount; 523.d.(1), the violation was intentional or reckless; 523.d.(2), the violation had a significant negative impact, or threat of significant negative impact on the environment or on public health, safety, or welfare; 523.d.(6), the violation involved recalcitrance or recidivism upon the part of the violator; 523.d.(8), the violation resulted in economic benefit to the violator.

ORDER

NOW, THEREFORE, IT IS ORDERED, that C. H. Fletcher Exploration, Inc. shall be found in violation of Rule 326.d., all wells shall maintain mechanical integrity, all wells which lack mechanical integrity shall be repaired or plugged and abandoned within six (6) months of failing a mechanical integrity test, for the Bamber #1 Well located in the NW¼ SE¼ of Section 15, Township 26 South, Range 46 West, 6th P.M.

IT IS FURTHER ORDERED, that C. H. Fletcher Exploration, Inc. shall be assessed a fine of Two Thousand Dollars ($2,000.00) for the violation, payable within thirty (30) days of the date the Order is issued.

ENTERED this 15th day of December, 1998 as of December 3, 1998.

CORRECTED this 27th day of January , 1999 as of December 3, 1998.

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 January 26, 1999

(1V#165a)