BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF ALLEGED VIOLATIONS OF THE                                     )                         CAUSE NO. 1V

RULES AND REGULATIONS OF THE COLORADO OIL                                   )

AND GAS CONSERVATION COMMISSION BY                                                  )                         ORDER NO. IV-282

LIFESTYLE ENERGY CORP., ELBERT COUNTY, COLORADO                    )

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission on January 10, 2005, at 9:00 a.m. in Suite 801, the Chancery Building, 1120 Lincoln Street, Denver, Colorado after giving Notice of Hearing as required by law, as to why Lifestyle Energy Corporation is in violation of Rule 1004.a. of the Colorado Oil and Gas Conservation Commission ("COGCC") and why the Commission should invoke the provisions of §34-60-121, C.R.S., as amended, providing for penalties for violations of the Rules and Regulations of the Commission.

FINDINGS

                        1. The Leischuck #1 Well, located in the NW¼ SE¼ of Section 22, Township 8 South, Range 61 West, 6^th P.M., was drilled by Lifestyle Energy Corporation and completed as a dry hole in June 1980.

                        2. Inspection of the well site by COGCC staff on October 5, 2004 showed the well site to be improperly reclaimed. The reserve pits remain open and were breached to allow the bentonitic drilling mud to drain into an adjacent pasture which has been impacted. Service rig anchors and miscellaneous trash (thread protectors, 5 gallon metal buckets, etc.) have not been removed as required by Rule 1004.a.

                        3. Lifestyle Energy Corporation filed for Chapter 11 bankruptcy on May 28, 1982. Correspondence received from the St. Paul Insurance Company on October 25, 1985 stated that "Lifestyle Energy Corporation was purchased by Shanley Oil Corporation." An Internet search for Shanley Oil Corporation in Texas provided no information and this company also appears to be out of business.

                        4. COGCC staff should be authorized to make a claim on Thirty Thousand dollar ($30,000) plugging bond posted by Lifestyle Energy Corporation in order to reclaim the well site.

ORDER

                        NOW, THEREFORE IT IS ORDERED, that Lifestyle Energy Corporation shall be found in violation of Rule 1004.a., failure to reclaim the Leischuck #1 well site, located in the NW¼ SE¼ of Section 22, Township 8 South, Range 61 West, 6^th P.M.

                        IT IS FURTHER ORDERED, that COGCC staff shall be authorized to make a claim on the Thirty Thousand dollar ($30,000) blanket plugging bond posted by Lifestyle Energy Corporation in order to reclaim the Leischuck #1 well site.

                        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.

                        IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.

                        IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.

                        ENTERED this day of January, 2005, as of January 10, 2005.

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 18, 2004