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 OIL AND GAS )

CONSERVATION COMMISSION BY TROJAN OIL AND ) ORDER NO. 1V-74

GAS, WALSH FIELD, BACA COUNTY, COLORADO ) (1-185)

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 23, 1994 at 8:30 a.m., in Room 620, State Services Building, 1525 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on why Trojan Oil and Gas was not in violation of Rule No. 304. 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 orders of the Commission.

FINDINGS

The Commission finds as follows:

1. Trojan Oil and Gas 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. On June 6, 1994, the Commission received a letter from EOG (New Mexico) Inc. requesting assistance in resolving non-compliance issues regarding the Forgey #1 Well located in the NE¼ of Section 32, Township 31 South, Range 43 West, 6th P.M. EOG sold the well to National Cattle Company Inc. on April 1, 1992, who then sold the well to Trojan Oil and Gas. On June 8, 1994, Commission staff sent a certified letter to Trojan Oil and Gas requiring submittal of a plugging bond and Form 10 Change of Operator, by July 8, 1994 for this well and ten (10) other wells owned by Trojan Oil and Gas. On July 4, 1994, Commission staff inspected the Forgey wellsite and found the well capable of production but not operating at the time of inspection. On July 9, 1994, the Commission had not received the required plugging bond and change of operator forms

5. Testimony presented at the hearing on August 23, 1994 indicated that Trojan Oil and Gas was in violation of Rule 304., failure to submit plugging bond within thirty (30) days of taking over operations, for thirty-seven (37) days from July 9, 1994 through August 15, 1994.

6. The Commission should suspend a penalty in the amount of fifteen thousand ($15,000) dollars for violation of Rule 304., failure to submit a plugging bond, provided a thirty thousand ($30,000) dollar plugging bond and Form 10, Change of Operator forms are submitted for the eleven wells owned by Jackie Woodall d/b/a Trojan Oil and Gas no later than September 15, 1994. The penalty amount is calculated by assessing one-half the economic benefit of thirty thousand ($30,000) dollars, the value of a plugging bond. The suspended penalty should be payable within thirty (30) days of September 15, 1994, should the plugging bond and Form 10's not be submitted in accordance with the order.

7. The Commission should further require that said wells be brought into compliance with Rules 317.b.(3) and 324.b.(1) of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission which require the wells to pass a mechanical integrity test or be plugged and abandoned, including site restoration, no later than November 15, 1994. In lieu of plug and abandonment or mechanical integrity testing, the wells should be placed on production no later than November 15, 1994.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that Jackie Woodall d/b/a Trojan Oil and Gas is hereby ordered to post a thirty thousand ($30,000) dollar plugging bond and submit Form 10, Change of Operator forms for the below-listed wells no later than September 15, 1994:

Township 31 South, Range 43 West, 6th P.M.

Silvey #1-27, NW1/4 SE1/4, Section 27

Ernsting #1-28, NW1/4 SE1/4, Section 28

Forgey #1, NE1/4, Section 32

Farmer #1-34, NW1/4 SE1/4, Section 34

Township 32 South, Range 43 West, 6th P.M.

Holt #1-3, NE1/4 SW1/4, Section 3

Burchfield #1-4, NE1/4 SW1/4, Section 4

Baughman #1-5, NW1/4 SE1/4, Section 5

Self #1-8, NE1/4 NE1/4, Section 8

Self #1-9, NE1/4 SW1/4, Section 9

Griffin #1-17, NE1/4 SW1/4, Section 17

Petrowsky #1-18, SE1/4, Section 18

IT IS FURTHER ORDERED, that the penalty in the amount of fifteen thousand ($15,000) dollars shall be suspended. The penalty shall be payable within thirty (30) days of September 15, 1994, should the plugging bond and Form 10's not be submitted in accordance with the order.

IT IS FURTHER ORDERED, that said wells shall be brought into compliance with Rules 317.b.(3) and 324.b.(1) of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission which require the wells to pass a mechanical integrity test or be plugged and abandoned, including site restoration, no later than November 15, 1994. In lieu of plug and abandonment or mechanical integrity testing, the wells shall be placed on production no later than November 15, 1994.

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 August 23, 1994.

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

Patricia C. Beaver, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203

September 12, 1994