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-210
DUNCAN OIL, INC., WELD COUNTY, COLORADO

ADMINISTRATIVE ORDER BY CONSENT

FINDINGS

1. Duncan Oil, Inc. is an interested party in the subject matter of the above referenced administrative order.

2. The Commission has jurisdiction of the subject matter, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

3. The Maddy 1-31 Well was drilled and abandoned on October 11, 2000. The plugging procedure for the Maddy 1-31 Well was specified in the conditions of approval attached to the Application for Permit-to-Drill, Form 2 approved on September 27, 2000. The approved plugging procedure required that a 40 sack cement plug be set at a depth of 800 feet to cover an aquifer used in the immediate area. Based on the Well Abandonment Report, Form 6 submitted January 16, 2001, the required plug at 800 ft was not set. All other plugs were set as required.

4. On February 23, 2001, COGCC staff issued a Notice of Alleged Violation (“NOAV”) to Duncan Oil, Inc. The NOAV cited a violation of Rule 301., failure to receive approval to change previously approved work plans. The corrective action required that a written response be submitted to explain Duncan Oil’s actions when plugging the Maddy 1-31 Well. The abatement date of this NOAV was March 3, 2001.

5. A written response was received March 2, 2001, explaining that the Maddy 1-31 Well was plugged using the same procedure as the State 1-22 Well which had been plugged 2.5 to 3 miles to the east of this location. The conditions of approval on the approved Application for Permit-to-Drill, Form 2 were not used or consulted to determine the plugging procedure that was followed at the Maddy 1-31 Well.

6. A monetary penalty of One Thousand dollars ($1,000.00) should be assessed against Duncan Oil, Inc., in accordance with Rule 523.a. and Rule 523.d., for violation of Rule 301.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Duncan Oil, Inc. shall be found in violation of Rule 301., failure to receive approval to change previously approved work plans as substantiated by Well Abandonment Report submitted for the Maddy 1-31 Well. The Maddy 1-31 Well is located in the SE¼ SE¼ of Section 31, Township 10 North, Range 57 West, 6th P.M.

IT IS FURTHER ORDERED, that Duncan Oil, Inc. shall be assessed a total fine of One Thousand dollars ($1,000.00) for the violation listed above, payable within thirty (30) days of the date the order is approved.

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.

RECOMMENDED this 16th day of March, 2001.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Morris Bell, Hearing Officer

Dated at Suite 801, 1120 Lincoln Street Denver, Colorado 80203 March 14, 2001

(1V#210)