BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                             OF THE STATE OF COLORADO

IN THE MATTER OF PLUGGING, ABANDONMENT,                  )                    CAUSE NO. 1

RECLAMATION, AND RESTORATION OF A WELL                    )

IN BOULDER COUNTY, COLORADO                                            )                    ORDER NO. 1V-69

                                                                                                                                                (1-178)

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission at 8:30 a.m. on January 19, 1994, February 22, 1994, and May 16, 1994 in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado on the application of Birch Mountain Limited Liability Company for an order to require the following action to be taken on the McKenzie No. 1-21 Well located in the NW1/4 NW1/4 of Section 21, Township 1 North, Range 70 West, 6th P.M., Boulder County:  (1) declare the well to be abandoned, (2) require the well to be plugged and abandoned, (3) require the removal of the well head, pump jack, overflow pit, storage tank, and all facilities used for the development, production, and storage of oil at the site, (4) require reclamation of the site to a condition as near as possible to its original condition, to require clean up and environmental remediation of the land and water at the site for pollution and environmental degradation caused by the operation of the well, and (5) require damages as such may be found in favor of Birch Mountain Limited Liability Company and against the operator.

FINDINGS

                        The Commission finds as follows:

                        1.  Birch Mountain Limited Liability 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.  The 300 Series of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission establish, among other things, provisions for abandoning non-productive wells, reclaiming the surface location, and prevention of pollution of waters of the state, surface and subsurface.

                        5.  The McKenzie No. 1-21 Well located in the NW1/4 NW1/4 of Section 21, Township 1 North, Range 70 West, 6th P.M., Boulder County was drilled and found productive in the Pierre Formation in approximately 1902.

                        6.  On January 1, 1994, The Meyer Oil Company, Inc. filed with the Commission, a Form 10, Change of Operator, from Inter-Global Petroleum Reserves, Inc. to The Meyer Oil Company, Inc.  On January 16, 1994 The Meyer Oil Company, Inc. produced thirty (30) barrels of oil from the McKenzie No. 1 Well.

                        7.  At the time of the January 19, 1994 hearing, the Commission found that based on the recent production from the McKenzie No. 1-21 Well, the well, although previously shut-in for over twenty (20) months, could not be considered to be abandoned and thus required to be plugged and abandoned, equipment removed, and the site restored.

                        8.  At the time of the February 22, 1994 hearing, Commission staff reported that a review of the two environmental assessments provided by the Applicant did not result in conclusive evidence that the McKenzie No. 1-21 well was causing pollution to occur at the site.  The Commission directed the Commission staff to prepare a letter to Birch Mountain Limited Liability Company requesting additional information on the allegation that the McKenzie No. 1-21 Well was polluting the waters of the state.  On March 22, 1994, the applicant responded in writing to this request by stating that they did not believe that it was the duty of the surface owner to conduct further investigation of the possible pollution at the McKenzie site.  

                        9.  At the time of the April 18, 1994 hearing, the Commission directed the Commission staff review Underground Storage Tank records to try to determine if an old gas station may be a pollution source at the McKenzie site.  The Commission further directed the Commission staff to witness mechanical integrity tests of surface facilities, including the piping and tank, at the McKenzie No. 1-21 Well.  In addition, the Commission directed The Meyer Oil Company, Inc. to fence the pit site unless the pit was backfilled.

                        10.  Testimony presented by the staff at the May 16, 1994 hearing indicated that there had been no reports of leaking underground storage tanks near the McKenzie No. 1-21 well site, nor reports of underground storage tanks having been removed.  Additional information provided by the State Oil Inspector's office indicated that the owner of record for the gas station is Boulder 66 and required fees have not been paid to the State.   Further testimony indicated that on May 11, 1994, Commission staff witnessed a mechanical integrity test at the McKenzie site and the flowline did pass the mechanical integrity test.  Testimony presented by the applicant at the May hearing indicated that the pit at the McKenzie No. 1 Well had not been backfilled, nor had the site been fenced.

                        11.  Based on the facts stated in the application, the testimony presented by the applicant and The Meyer Oil Company, Inc. the Commission should enter an order denying the application.

ORDER

                        NOW, THEREFORE, IT IS ORDERED that the application of Birch Mountain Limited Liability Company for an order to require reclamation of the site to a condition as near as possible to its original condition, to require clean up and environmental remediation of the land and water at the site for pollution and environmental degradation caused by the operation of the well, and require damages as such may be found in favor of Birch Mountain Limited Liability Company and against the operator, at the McKenzie No. 1-21 Well located in the NW1/4 NW1/4 of Section 21, Township 1 North, Range 70 West, 6th P.M., Boulder County, is hereby denied.

                        IT IS FURTHER ORDERED, that the pit at the McKenzie No. 1 Well shall be fenced no later than May 31, 1994, unless the pit is backfilled prior to that date.

                        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 ,1994, as of May 16, 1994.

                                                                        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 7, 1994