BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

ADMINISTRATIVE ORDER BY CONSENT

(Pursuant to Rule 522.b.(3) of the Rules and Regulations of the

Colorado Oil and Gas Conservation Commission, 2 CCR 404-1)

FINDINGS

1.    On November 4, 2008, the Colorado Oil and Gas Conservation Commission (“COGCC” or “Commission”) approved an Application for Permit-to-Drill (“APD”), submitted by Whiting Oil & Gas Corporation (“Whiting”) for the Boies Well Pad (the “Well Pad”) to facilitate the drilling of seven wells listed below, located in the NE¼ SE¼ of Section 30, Township 2 South, Range 97 West, 6^th P.M.:

2.    On or before June 24, 2008, Whiting constructed the Well Pad at a different location than where it had been permitted, and drilled and set conductor casing for the seven wells listed above.  COGCC became aware of the issue when a drilling report was submitted showing that they had moved the Well Pad from the originally permitted location.

3.   On October 9, 2008, COGCC Staff issued Notice of Alleged Violation (“NOAV”) #200196387 to Whiting for commencing operations without a valid permit.  Said NOAV cited violation of the following rule:

a.    Rule 303.a., which requires an operator, prior to commencing operations for the drilling of a well, to file with the Director an APD and obtain the Director’s approval before commencement of operations with heavy equipment. 

Said NOAV required Whiting to submit a Sundry Notice, Form 4, by November 7, 2008 to explain the reasons for the violation and the procedures that would be implemented to prevent future violations.

4.    On November 3, 2008, Whiting submitted a Sundry Notice in response to the NOAV, explaining that due to the proximity to power lines they had moved the Well Pad.  The error arose because by moving the Well Pad they were aware they were in the same section, but were not aware they shifted quarter sections.  Whiting did not have a surveyor render a preliminary plat before they moved the Well Pad, and thus missed the location shift.

5.    In order to prevent future violations, Whiting had a new section plat made showing the original position, and the moved position. Whiting commented this procedure would be followed anytime they move a well pad in the future.

6.    To date, Whiting has not had any additional violations of Rule 303. that resulted in commencing operating without a valid permit.

7.   Rule 523. specifies a base fine of One Thousand dollars ($1,000) for each day of violation of Rule 303.  Rule 523.a.(3) specifies that “the maximum penalty for any single violation shall not exceed Ten Thousand dollars ($10,000) regardless of the number of days of such violation,” unless the violation results in significant waste of oil and gas resources, damage to correlative rights, or a significant adverse impact on public health, safety or welfare or the environment.

8.   Whiting violated Rule 303.a. because it commenced drilling the Boise wells, identified in Finding No. 1, before the Director of COGCC approved the APD for the drilling of the wells on the new Well Pad.  It appears that the violation was a one-time occurrence and did not result in significant waste of oil and gas resources, damage to correlative rights, or a significant adverse impact to public health, safety or welfare.  The parties agree to an adjusted fine of Seven Thousand dollars ($7,000) which takes into consideration the mitigation factor that Whiting has demonstrated a history of compliance with COGCC rules, regulations and orders.

9.    COGCC Staff specifically reserve the right to proceed as to alleged violations of Rule 303. if this matter is not resolved by this Administrative Order by Consent (“AOC”).  Nothing within this AOC should be construed as the COGCC Staff waiving their right to prosecute any violation set forth in this AOC in the event that this AOC is not executed by the parties and approved by the Commission of present evidence which alters the days of violation set forth in this AOC.

10.   Payment of the fine pursuant to this AOC does not relieve the operator from its obligations to complete corrective actions set forth in the NOAV, as may be amended or modified by Staff.

11.   Whiting should execute this AOC no later than fourteen (14) days after the date it is executed by Staff for recommendation to the Commission for expedited approval.  Fines may increase if this matter is not recommended for expedited approval.    

12.   Whiting, or its successors or assigns, should be required to remain responsible for complying with this AOC, in the event of any subsequent sale of property.

                                                                                   ORDER

NOW, THEREFORE, IT IS ORDERED, that Whiting is hereby found in violation of the Rule 303.a. for its oil and gas operations at the Boies Well Pad, located in the NE¼ SE¼ of Section 30, Township 2 South, Range 97 West, 6^th P.M.

IT IS FURTHER ORDERED, that Whiting is hereby assessed an adjusted fine of Seven Thousand dollars ($7,000) for the Rule violation set forth above, which shall be payable within thirty (30) days of the date the order is approved by the Commission.

IT IS FURTHER ORDERED, that this AOC does not relieve the operator from undertaking and completing abatement or corrective actions that may be required by the NOAV described in Finding No. 3, above, or any amendments or modifications thereto specified by the COGCC Staff.

IT IS FURTHER ORDERED, that the operator shall execute this AOC no later than fourteen (14) days after the date it is executed by the COGCC Staff for recommendation of expedited approval by the Commission.  

IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.

                        IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.

                        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                 day of November, 2010.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                                                                                                By                                                                            ____ 

                                                                                    Rob Willis, Enforcement Officer

Dated at Suite 801

1120 Lincoln St.

Denver, Colorado 80203

November 15, 2010

                        AGREED TO AND ACCEPTED this _________day of_______________, 2010.

                                    WHITING OIL & GAS CORPORATION                               

                                    By __________________________________________

                                                Signature of Authorized Company Representative

                                    ____________________________________________                                                Print Signatory Name

                                    ____________________________________________

                                                Title