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                                          )

D J PRODUCTION SERVICES INC.,                                                         )                   DOCKET NO. 0209-OV-10

WELD COUNTY, COLORADO                                                                   )                    

                                                                          NOTICE OF HEARING

TO ALL INTERESTED PARTIES AND TO WHOM IT MAY CONCERN:

On October 26, 2001, Colorado Oil and Gas Conservation Commission (“COGCC”) staff received a complaint from the landowner of the Sargent Farms “B” tank battery operated by D J Production Inc. (“D J Production”) located in the SE¼ NE¼ of Section 25, Township 2 North, Range 63 West, 6th P.M.  The complaint involved royalty issues and a “mess” inside the berms at the subject tank battery where the operator was allegedly draining produced water into the berm in order to sell the oil.  On October 26, 2001, COGCC environmental staff conducted a field inspection of the subject facility in response to the landowner complaint.  Oil saturated soils and oily water were observed within the bermed area surrounding the stock tanks.  Additionally, salt staining was also observed on soils within the berm.

On November 2, 2001, COGCC environmental staff issued a Notice of Alleged Violation (“NOAV”) to D J Production for the presence of oil saturated soils and oily water within the berms.  The NOAV cited violation of Rule 324A.a., failure to prevent significant adverse environmental impacts to air, water, soil, or biological resources and failure to prevent the unauthorized discharge or disposal of oil, gas, or Exploration & Production (“E&P”) waste, Rule 907.a., failure to ensure that E&P waste is properly stored, handled, transported, treated, recycled, or disposed to prevent threatened or actual significant adverse environmental impacts to air, water, soil or biological resources, and Rule 910.a., for exceeding the COGCC Allowable Concentrations for Organics in Soil for non-sensitive areas.  The NOAV specified an abatement date of November 30, 2001 to submit a Site Investigation and Remediation Workplan, Form 27, for the cleanup of the oily soils.  Per return receipt, D J Production accepted the NOAV on November 20, 2001.  A Form 27 or other correspondence from D J Production was not received by the abatement date of November 30, 2001.

            On February 15, 2002, COGCC environmental staff conducted a field inspection of the Sargent Farms “B” tank battery.  Oily soil and oily water was observed within the bermed area.  A representative sample was collected from the impacted soil and submitted for analyses.  Laboratory results indicated a Total Recoverable Petroleum Hydrocarbon (“TRPH”) concentration at 120,000 mg/kg.  This significantly exceeds the COGCC Allowable Concentrations for Organics in Soils for non-sensitive areas at 10,000 mg/kg.  In COGCC correspondence dated March 19, 2002, D J Production was sent a copy of the laboratory analyses and was required to submit a Form 27 by April 15, 2002.  A Form 27 or other correspondence from D J Production was not received by the extended abatement date of April 15, 2002.

In accordance with Rule 522.c.(1)., the Director requests the Commission issue an Order Finding Violation of Rules 324A.a., 907.a., and 910.a., and assess a fine of One Thousand dollars ($1,000) for the above violations.

NOTICE IS HEREBY GIVEN, that the Oil and Gas Conservation Commission of the State of Colorado, pursuant to the above, has scheduled the above-entitled matter for hearing on:

Date:                            Monday, September 23, 2002

Time:                            10:00 a.m.

Place:                           Suite 801, The Chancery Building

                                    1120 Lincoln Street

                                    Denver, CO 80203

            In accordance with the Americans with Disabilities Act, if any party requires special accommodations for this hearing as a result of a disability, please contact Shannon Haliw at (303) 894-2100, extension 114, prior to the hearing and arrangements will be made.

Pursuant to said hearing in the above-entitled matter at the time and place aforesaid, or at any adjourned meeting, the Commission will enter such orders as it deems appropriate and necessary to protect public health, safety and welfare and to prevent the waste of oil and gas, either or both, in the operations of said field, and carry out the purposes of the statute.

In accordance with Rule 509., any interested party desiring to protest or to intervene should file with the Commission a written protest or a notice to intervene no later than September 9, 2002 briefly stating the basis of the protest or intervention.  Such interested party shall, at the same time, serve a copy of the protest or notice to intervene to the person filing the application.  An original and nine (9) copies shall be filed with the Commission.

      IN THE NAME OF THE STATE OF COLORADO

                                                                  OIL AND GAS CONSERVATION COMMISSION

                                           OF THE STATE OF COLORADO

                                    By_________________________________

Dated at Suite 801                                                   Patricia C. Beaver, Secretary

1120 Lincoln Street

Denver, Colorado, 80203

August 28, 2002