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 Nos. 902.e. and 907.a., 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 violatio ns of the Rules 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 18, 1995, Commission staff inspected the Schwartz No. 1-X Well located in the NE1/4 NE1/4 Section 28, Township 3 South, Range 50 West, 6th P.M., and found violations of Rule 902.e, oil on produced water pit, Rule 907.a., unreported and unremediated release of oil. On September 19, 1995, the Commission issued a Notice of Alleged Violation (NOAV) with abatement by September 25, 1995. On November 24, 1995, staff reinspected the Schwartz N o. 1-X Well and found the oil located next to the tank battery had been removed, but oil still remained on the evaporation pit. On December 4, 1995, staff reinspected the site and found oil located next to the tank battery and oil on the evaporation pit. The same conditions existed when staff and Pease Oil & Gas Company were present at the site on December 7, 1995.

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 the well shall be plug ged and abandoned and the site reclaimed no later than 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 plug and abandon and reclaim the site for the Schwartz No. 1-X Well 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 ??