REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 20, 1995 at 8:30 a.m., in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing as required by law, on why Pease Oil & Gas Company, was not in violation of Rule No. 902.e., 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 Ru les and Regulations of the Commission.

FINDINGS

The Commission finds as follows:

1. Pease Oil & Gas Company 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 September 28, 1995, Commission staff inspected the Vortex tank battery located in the NW1/4 NE1/4 Section 8, Township 2 South, Range 55 West, 6th P.M., and found violations of Rule 902.e, oil on produced water pit, Rule 902.f., holes in skim pit screen and Rule 604, inadequate berms and diked area capacity around tanks. On September 29, 1995, the Commission issued a Notice of Alleged Violation (NOAV) with abatement required by October 6, 1995. N o reply was received to the NOAV. On November 17, 1995, staff reinspected the Vortex lease and found the same violations in existence. On December 2, 1995, Pease Oil & Gas Company informed the Commission of their intent to close the pit.

5. On December 18, 1995, an Administrative Order by Consent was issued by Commission staff with the agreement of Pease Oil & Gas Company and the Hearing Officer recommends that Pease Oil & Gas Company be found in violation of Rule No. 902.e., accumulation of oil in the produced water pit for more than twenty-four (24) hours. Further, the Hearing Officer recommends that a fine of seven hundred fifty dollars ($750) be assessed and that the produced wate r pit should be closed by May 31, 1996.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that Pease Oil & Gas Company shall be found in violation of Rule 902.e., accumulation of oil in the produced water pit for more than twenty-four (24) hours.

IT IS FURTHER ORDERED, that Pease Oil & Gas Company shall be assessed a total fine of Seven Hundred Fifty Dollars ($750) payable within thirty (30) days from the date the order is issued.

IT IS FURTHER ORDERED, that Pease Oil & Gas Company shall close the aforementioned produced water pit no later than May 31, 1996.

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 , 1996, as of December 20, 1995.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary Dated at Suite 801 1120 Lincoln Street Denver, Colorado 80203 January 15, 1996 ??