BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                              OF THE STATE OF COLORADO

IN THE MATTER OF THE VIOLATION OF THE RULES               )                    CAUSE NO. 1

AND REGULATIONS OF THE COLORADO OIL AND GAS          )                    ORDER NO. 1V-60

CONSERVATION COMMISSION BY GERRITY OIL AND            )                                (1-147)

GAS COMPANY, WELD COUNTY, COLORADO                            )

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission on May 17, 1993 at 8:30 a.m., in the 2nd Floor Auditorium, 4201 East Arkansas Avenue, Denver, Colorado, after giving notice of Hearing as required by law, on why Gerrity Oil and Gas Company was not in violation of Rule 303.a. of the Rules and Regulations of the Commission and why it should not be subject to the provisions of 34-60-121, C.R.S., as amended.

FINDINGS

                        The Commission finds as follows:

                        1.  Gerrity Oil and Gas Company as applicant herein, 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.  At approximately 8:00 a.m. on May 3, 1993, the Oil and Gas Conservation Commission staff received notification from Gerrity Oil and Gas Company that the Parker Blue No. D23-13 Well located in the SW1/4 SW1/4 of Section 23, Township 3 North, Range 64 West, 6th P.M. was spudded on April 30, 1993, prior to the approval of the Application for Permit-to-Drill submitted on April 23, 1993. 

                        5.  On May 6, 1993, the Commission issued a Cessation Order with respect to the Parker Blue No. 23-13 Well and directed Gerrity Oil and Gas Company to cease operations immediately after production casing was cemented and the well was closed to the atmosphere.  In addition, the operator was directed to pump all fluids from the pit and install a berm and fence around the pit.

                        6.  On May 14, 1993, Commission staff met with representatives from Gerrity Oil and Gas Company to discuss the alleged violation of Rule 303.a. of the Rules and Regulations of the Commission.  At the time of the meeting, the Commission staff recommended that a fine of seven thousand ($7000) dollars be assessed.  The following three mitigating factors were presented:  1) Gerrity Oil and Gas Company self-reported on the Parker Blue No. D23-13 Well on May 3, 1993, 2) The Well was the subject of a pending Application for Permit-to-Drill, 3) Gerrity Oil and Gas Company has implemented three new procedures in their administrative process which will help prevent wells from being drilled prior to the issuance of Application for Permit-to-Drill.  Due to these mitigating factors, the staff recommended that two thousand five hundred ($2500) dollars of the penalty be suspended, for a total penalty of four thousand five hundred ($4500) dollars to be assessed on Gerrity Oil and Gas Company.

                        7.  At the time of the hearing on May 17, 1993, the staff reported that Gerrity Oil and Gas Company was in agreement with the proposed penalty assessment.  The staff recommended that a penalty for the violation of Rule 303.a., failure to secure the Director's approval before proceeding with the drilling of a well, should be assessed for seven thousand ($7000) dollars, with a suspension of two thousand five hundred ($2500) dollars of said penalty, for a total penalty assessment of four thousand five hundred ($4500) dollars.

                        8.  A penalty of four thousand five hundred ($4500) dollars should be assessed on Gerrity Oil and Gas Company, due within thirty (30) days of the receipt of this order.

ORDER

                        NOW, THEREFORE, IT IS ORDERED, that Gerrity Oil and Gas Company is in violation of Rule 303.a., and that a penalty of seven thousand ($7000) dollars shall be assessed and that based on mitigating factors, two thousand five hundred ($2500) dollars of the penalty shall be suspended.

                        IT IS FURTHER ORDERED, that Gerrity Oil and Gas Company is hereby assessed a total penalty of four thousand five hundred ($4500) dollars, due within thirty (30) days of the receipt of this order.

                        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 ____________ day of _____________________, 1993, as of May 17, 1993.

                                                                             OIL AND GAS CONSERVATION COMMISSION

                                                                                   OF THE STATE OF COLORADO

                                                                             BY _____________________________________

                                                                                        Patricia C. Beaver, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203

June 17, 1993