REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 12, 1999, 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 Sunset Hill Oil Company Inc., is in violation of Rule 1004. failure to remove remaining oilfield junk and contour and re-vegetate the wellsite for the Doll Estate #1 Well located in the NW1/4 SW1/4 of Section 14, Township 7 North, Range 58 West and why the Commission should not 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

The Commission finds as follows:

1. Sunset Hill Oil Company Inc. 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 of the subject matter, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

4. On June 5, 1997 Colorado Oil and Gas Conservation Commission ("COGCC") staff issued a Notice of Alleged Violation ("NOAV") for the Doll Estate #1 Well located in the NW1/4 SW1/4 of Section 14, Township 7 North, Range 58 West. The NOAV cited a violation of Rule 1004. which required that the remaining oilfield junk be removed and the wellsite contoured and re-vegetated. The Doll Estate #1 Well was plugged and abandoned on November 27, 1990. The NOAV required as abatement that the Doll Estate #1 wellsite be reclaimed no later than June 30, 1997.

5. K.P. Kauffman Company ("KPK") was appointed as bankruptcy trustee for Sunset Hill Oil Company Inc.

6. On June 13, 1997, KPK responded to the NOAV stating "It is KPK's belief that the captioned well has never been under the operation of KPK nor has the well or lands ever been assigned to KPK".

7. The Doll Estate #2, Doll Estate #3 and Copland #1 Wells were plugged in 1990 yet all three (3) wellsites still require minor cleanup and reclamation. Based on the information provided by KPK, the Sunset Hill Oil Company Inc. plugging bond in the amount of Thirty Thousand Dollars ($30,000) should be claimed and the monies used to remove any remaining equipment and debris such as risers, anchors, piping and gravel and to reclaim the wellsites.

8. COGCC staff has estimated the cleanup and wellsite reclamation costs for the wells at approximately Six Thousand Dollars ($6,000).

9. The Commission finds that failure to complete restoration operations is a continuing violation of Rule 1004. by Sunset Hill Oil Company.

ORDER

NOW THEREFORE IT IS ORDERED, that Sunset Hill Oil Company Inc. is in continuing violation of COGCC Rule 1004., failure to reclaim four (4) wellsites in Section 14, Township 7 North, Range 58 West.

IT IS FURTHER ORDERED, that the Commission make a claim on Sunset Hill Oil Company Inc.'s plugging bond to complete restoration activities at the Doll Estate #1, Doll Estate #2, Doll Estate #3 and the Copeland #1 Wells located in Section 14, Township 7 North, Range 58 West.

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 July, 1999, as of July 12, 1999.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia Beaver, Secretary

Dated at Suite 801 1120 Lincoln Street Denver, Colorado 80203 July 19, 1999