BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

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

RULES AND REGULATIONS OF THE COLORADO OIL                      )

AND GAS CONSERVATION COMMISSION BY                                     )                             ORDER NO. 1V-132.5

BARRETT RESOURCES CORPORATION                                         )

GARFIELD COUNTY, COLORADO                                                         )

                        1. On September 15, 1997, Barrett Resources Corporation ("Barrett") lost well control while drilling the Bernklau # RMV 108-4 (the "Bernklau Well") located in the NW¼ NE¼ of Section 4, Township 7 South, Range 94 West, Garfield County, Colorado. The loss of well control resulted in an underground blowout which directly impacted the Wendell Goad water well (the "Water Well") located approximately ¾ of a mile to the northwest of the Bernklau Well.

                        2. During production casing cementing operations, the Bernklau Well began flowing gas to surface. The gas flow was caused by reduced hydrostatic pressure across the producing gas formations. The reduction in hydrostatic pressure occurred after Barrett pumped lower density fluids prior to pumping the cement slurry to cement the production casing.

                        3. During production cementing operations, Barrett shut-in the Bernklau Well to prevent the cement slurry from blowing out of the hole through the well control equipment.

                        4. After Barrett shut-in the Bernklau Well, pressure in the annulus between the production casing and the open-hole increased to levels sufficient to allow gas in the annulus to escape from the Bernklau Wellbore and to migrate to the Water Well.

                        5. After the blow-out, Barrett voluntarily conducted ground water sampling and testing and methane monitoring in the area surrounding the Bernklau Well to determine potential ground water contamination and methane concentrations caused by the blow-out to protect the health and safety of the area residents.

                        6. Analysis of samples from the Water Well detected a benzene concentration of 1,700 parts per billion. This concentration significantly exceeds the standard of 5 parts per billion set by the Water Quality Control Commission for ground waters of the state.

                        7. The Director finds that this incident resulted in a violation of Rule 324A.b. which states "[n]o operator, in the conduct of any oil or gas operation shall perform any act or practice which shall constitute a violation of water quality standards or classifications established by the Water Quality Control Commission for waters of the state,….."

                        8. The Director finds that this incident resulted in a violation of Rule 327 which states "[t]he operator shall take all reasonable precautions, in addition to fully complying with Rule 317. to prevent any oil, gas or water well from blowing uncontrolled". During the cementing operations of the Bernklau Well, all reasonable precautions were not taken to maintain adequate hydrostatic pressure on the gas formations to prevent gas influx into the wellbore and resulting loss of well control.

                        9. The Director finds that this incident resulted in a significant adverse impact on public health, safety and welfare.

                        10. A monetary penalty should be assessed against Barrett for these Rule violations in accordance with Rule 523.a.

                        11. Based on Barrett’s response, investigation and mitigation of the effect of these violations and Barrett’s historic operations within the Williams Fork development area, the following mitigating factors shall be applied to any monetary penalty:

                        12. Barrett recognizes the Director’s authority to provisionally resolve alleged violations through negotiation and execution of Administrative Orders by Consent ("AOC") prepared for Commission approval pursuant to Rule 522.b. The Director’s consent to enter into this AOC is conditioned upon the Director’s finding that Barrett violated Rules 324A.b. and 327. In entering into this AOC with the Director, Barrett does not admit any violation of these Rules.

                        1. Barrett Resources Corporation be found in violation of Rules 324A.b. and 327.

                        2. This incident at the Bernklau Well caused significant adverse impact on public health, safety and welfare.

                                                                                                            OIL AND GAS CONSERVATION COMMISSION

                                                                                                                        OF THE STATE OF COLORADO

                                                                                                            By____________________________________

                                                                                                                                    #9; #9; Morris Bell, Hearing Officer

Dated at Suite 801

1120 Lincoln St.

Denver, Colorado 80203

October 24, 1997

AGREED TO AND ACCEPTED THIS _______ DAY OF ______________, 1997.

BARRETT RESOURCES CORPORAITON

By ____________________________________

Title: Executive Vice President-Operations______