RECORD OF PROCEEDINGS

March 19, 2001

The Oil and Gas Conservation Commission met on March 19, 2001 at 9:30 a.m. in the Council Chambers of the City Hall Building, 350 Kimbark, Longmont, Colorado, for a hearing in Cause No. 1 (3 matters).

Those present were:

Stephen Sonnenberg             Chair

Daniel Skrabacz                     Vice Chair

Tom Ann Casey                      Commissioner

Brian Cree                               Commissioner

Bruce Johnson                        Commissioner

Michael Klish                           Commissioner

Abe Phillips                             Commissioner

Carol Harmon                          Assistant Attorney General

Richard Griebling                    Director

Brian Macke                            Deputy Director

Patricia Beaver                       Hearings Manager

Director’s Report: Director Griebling provided a written report.

AAG’s Report: AAG Harmon provided the Commissioners with two confidential memos for their review. She requested that her confidential memo distributed last week to the Commissioners be discussed in today’s executive session.

Commissioner Elections: Commissioner Johnson’s motion to accept Steve Sonnenberg as Commission Chair and Brian Cree as Vice Chair was approved unanimously. Commissioner Phillips suggested the Chair position be rotated every two years.

Audience Comments: Linda Flis announced the 100 year anniversary of the discovery of oil in Boulder Field. Ken Wonstolen reported that all pending oil and gas legislation will be heard by the Colorado Legislature on Thursday, March 23.

The hearing in Cause No. 1, Docket No. 0103-GA-02, request by the Hirschfeld Family Partnership Ltd., Braly Family LLC and Robin Nissen for an order revoking the drilling permit issued to HS Resources for the HSR-Hirschfeld 13-14A Well in the SW¼ SW¼ of Section 14, Township 2 North, Range 68 West, 6^th P.M., has been continued to the April 2001 hearing.

A hearing was held in Cause No. 1, Docket No. 0012-GA-09, request by TOP Operating Co. ("TOP") to determine the Director’s authority to administratively place directional drilling conditions on Applications for Permits-to-Drill ("APDs"). Present were: Erika Enger, attorney for Applicant TOP, Ken Wonstolen, attorney for Intervenor Colorado Oil and Gas Association ("COGA") and Phillip Barber and James Rourke, attorneys for Protestant City of Longmont ("Longmont").

When asked by the Commission Chair if any Commission members have a conflict of interest in the matter, Commissioner Phillips stated that although he could make an unbiased ruling he will recuse himself due to business dealings with TOP in another state.

Statements were made and legal authorities provided by Ms. Enger, Mr. Barber and Mr. Wonstolen in support of their clients’ positions. Rule 510. statements were made by Gene Burk and David Siple, for Patina Oil and Gas ("Patina"), both who have leasehold positions in the subject lands, regarding their concerns for precedent-setting permit conditions. AAG Harmon provided comments on the definitions of "administer" and "enforce" as they relate to the Director’s authority under the Oil and Gas Conservation Act. In response to a question from Commissioner Klish on the Director’s authority to impose directional drilling conditions, AAG Harmon opined that due to the absence of rules to address directional drilling, the Director does not have the authority to administratively impose such requirements on APDs. She further stated that due process requires a hearing to impose directional drilling conditions. The Director was questioned by the Commission about which rules he relied upon to approve APDs and what conditions he was attempting to mitigate by requiring directional drilling for the wells in this matter.

Commissioner Cree stated for the record that he was a previous employee of Patina and that he was unaware of Patina’s involvement in this matter prior to the Rule 510. statement made by Mr. Siple.

After deliberation, the Commission voted unanimously finding that the Director does not have the authority to impose directional drilling conditions on APDs absent a hearing. In response to a question raised by Ms. Enger regarding the disposition of the APDs, Chair Sonnenberg indicated the APDs issued by the Director are rescinded and the matter to determine appropriate well locations would be docketed for the May 31-June 1 hearing. Mr. Wonstolen stated that he would continue to be an intervenor in that matter.

A motion to go into and come out of executive session was approved unanimously. La Plata County litigation and the language COGA recommended for inclusion on APDs were discussed in executive session.

A tour of Sandstone Ranch was conducted by Paula Fitzgerald, City of Longmont Park Planner with the Commissioners, COGCC staff, and attorneys for TOP, COGA and Longmont in attendance.

A hearing was held in Cause No. 1, Docket No. 0101-GA-01, request by City of Longmont to designate certain lands in the E½ of Section 7 and the W½ SW¼ of Section 8, both in Township 2 North, Range 68 West, 6^th P.M. as an outside activity area under Rule 603.b. Present were Phillip Barber and James Rourke, attorneys for Applicant Longmont and Erika Enger, attorney for Protestant TOP.

Commissioner Phillips recused himself from this matter due to the conflict of interest caused by his business dealings with TOP.

Opening statements were made by Mr. Rourke and Ms. Enger. Testimony in support of Longmont’s position was presented by Mayor Leona Stoecker and Paula Fitzgerald. Rebuttal testimony was presented by Rodney Herring of TOP. All witnesses were cross-examined and questioned by the Commission. Ken Wonstolen made a Rule 510. statement regarding his concern that cities may create plans without input from the oil and gas leaseholders and then bring their plans to the Commission for approval. Director Griebling and Deputy Director Macke presented a brief staff analysis.

After closing statements and deliberation, the Commission voted unanimously to designate the NW¼ NE¼ of Section 7 as an outside activity area with setback boundaries for wells of 350 feet from the boundaries of the actual facilities, i.e., ball fields, concession stand and parking lot. The Commission continued the matter of where to designate specific well locations to the May 31-June 1, 2001 hearing, provided the parties cannot reach an agreement on the surface locations.

The Commission unanimously approved the Consent Agenda, which included the following:

Cause No. 1, Docket No. 0103-OV-02, request to approve an Administrative Order by Consent finding Rocky Mountain Gas Supply, LLC in violation of Rule 907.d.(2)., failure to properly dispose of oil-based drilling fluids, and assess a total fine of One Thousand Dollars ($1,000).

The meeting adjourned at 7:54 p.m.

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The Secretary was therefore authorized to issue the following orders:

Order No. 1-93, Wattenberg Gas Spaced Area, Weld County: Finds that the Director does not have the authority to administratively place directional drilling conditions on Applications for Permits-to-Drill.

Order No. 1-94, Wattenberg Gas Spaced Area, Weld County: Approves the request to designate the NW¼ NE¼ of Section 7 as an outside activity area with setback boundaries for wells of 350 feet from the boundaries of the actual facilities, i.e., ball fields, concession stand and parking lot.

Signed:

Patricia C. Beaver, Secretary

Approved:

Stephen Sonnenberg, Chair