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. IV-220
WOOLSEY OIL COMPANY, 
MONTEZUMA COUNTY, COLORADO

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 12, 2002 at 10:00 a.m. at the Holiday Inn, 3125 Toupal Drive, Trinidad, Colorado, after giving Notice of Hearing as required by law, on why Woosley Oil Company was in violation of Rule No. 326.b. of the Rules and Regulations 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. The Ken Decker #1 Well is located in the NE¼ NW¼ of Section 9, Township 35 North, Range 13 West, N.M.P.M. The well was purchased by Woosley Oil Company (“Woosley”) in April of 1984. The well was inspected by Colorado Oil and Gas Conservation Commission (“COGCC”) staff on July 26, 2000 and was found to be temporarily abandoned. On February 12, 2001, Woosley was issued a Notice of Alleged Violation (“NOAV”) that it was in violation of COGCC Rule 326.b., failure to perform a mechanical integrity test (“MIT”) for the Ken Decker #1 Well. The violation was to be corrected by June 1, 2001.

2. The Hackathorn #1 Well is located in the NE¼ NW¼ of Section 8, Township 35 North, Range 13 West, N.M.P.M. The well was purchased by Woosley in April of 1985. The well was never produced. The well was inspected by COGCC staff on July 27, 2000 and was found to be temporarily abandoned. On February 12, 2001, Woosley was issued a NOAV that it was in violation of COGCC Rule 326.b., failure to perform a MIT for the Hackathorn #1 Well. The violation was to be corrected by June 1, 2001.

3. The Kent Woosley #1 Well is located in the SW¼ NE¼ of Section 6, Township 35 North, Range 13 West, N.M.P.M. The well was drilled by Woosley in November of 1982. Cumulative production from the well was approximately 1900 MCFG. The well was inspected by COGCC staff on July 27, 2000 and was found to be temporarily abandoned. On February 12, 2001, Woosley was issued a NOAV that it was in violation of COGCC Rule 326.b., failure to perform a MIT for the Kent Woosley #1 Well. The violation was to be corrected by June 1, 2001.

4. The NOAVs were sent by registered mail to Woosley’s last known address. The notices were never claimed.

5. To date, no MIT’s have been performed on the three wells listed above.

6. On November 21, 2001, Administrative Orders by Consent finding Woosley in violation of Rule 326.b. for the three wells and recommending a monetary penalty of Three Thousand Dollars ($3,000) were sent to Woosley at two different addresses via registered mail. Neither letter was claimed.

7. Woosley should either perform MIT’s, return to production, or plug, abandon and reclaim the wells by May 1, 2002. If Woosley does not perform MIT’s, return to production, or plug, abandon and reclaim the wells by this date, the Commission should authorize COGCC staff to claim Woosley’s financial assurance and plug, abandon and reclaim the three wells.

8. A monetary penalty of Six Thousand Dollars ($6,000) should be assessed against Woosley in accordance with Rule 523.a.

ORDER

NOW, THEREFORE IT IS ORDERED, that Woosley Oil Company shall be found in violation of Rule 326.b., for failure to perform MIT’s on the Ken Decker #1 Well, the Hackathorn #1 Well, and the Kent Woosley #1 Well.

IT IS FURTHER ORDERED, that Woosley Oil Company shall be assessed a total fine of Six Thousand dollars ($6000) for the violations of the above rule payable within thirty (30) days of the date the order is issued.

IT IS FURTHER ORDERED, Woosley Oil Company shall either perform a MIT, return to production, or plug, abandon and reclaim the above-described wells by May 1, 2002.

IT IS FURTHER ORDERED, that if Woosley Oil Company does not either perform MIT’s, return to production, or plug, abandon and reclaim the above-described wells and no other party becomes operator of these wells by May 1, 2002, the Commission shall authorize the COGCC staff to make a claim on the Thirty Thousand Dollar ($30,000) bond posted by Woosley Oil Company in order to plug, abandon and reclaim the wells.

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 25th day of February, 2002, as of February 12, 2002.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Dated at Suite 801 Patricia C. Beaver, Secretary 1120 Lincoln Street Denver, Colorado 80203 February 25, 2002.

(1V#220)