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-247

ANTELOPE ENERGY CO., WELD COUNTY, COLORADO )

ADMINISTRATIVE ORDER BY CONSENT

FINDINGS

                       1. On October 15, 2001, a Form 2, an Application for Permit to Re-enter, was approved for Antelope Energy Company, LLC (“Antelope”) to re-enter the Maddy # 1 Well located in the SE¼ SW¼ of Section 31, Township 10 North, Range 57 West, 6th P.M.

                        2. Because no information was submitted by Antelope regarding the re-entry, Colorado Oil and Gas Conservation Commission (“COGCC”) staff contacted Antelope by telephone on April 2, 2003 to inquire as the status of the Application for Permit to Re-Enter.  As a follow-up to that conversation, on April 8, 2003, Antelope submitted Form 4 Sundry Notice, summarizing the operations performed on the well and stating that due to complications during the re-entry and the possibility that Antelope would continue to work on the well, the well bore was left open.

                        3. COGCC staff conducted a field inspection on the Maddy #1 Well on April 11, 2003. The COGCC inspector determined that the well had been re-entered and was left in an unsecured manner with an unwelded steel plate on top of the surface casing and the reserve drilling pits were left open.

                        4. On April 12, 2003, COGCC staff contacted Antelope. Antelope indicated that they had attempted to re-enter the well on December 3, 2001, but were unsuccessful due to wellbore problems encountered while drilling out the previously placed cement plug at 647 feet in depth. Antelope did not set any new plugs and the rig was released on December 11, 2001.

                        5. On April 14, 2003, staff issued a Notice of Alleged Violation (“NOAV”) for violations of Rule 308A., for not submitting a Form 5, Drilling Completion Report, within thirty (30) days of the suspension of commenced drilling activities prior to reaching total depth, Rule 301., for not providing written notice of intention to change plans previously approved, Rule 319.b.(1), for not receiving approval of the Director for temporarily abandoning the well and for not closing the well to the atmosphere prior to the temporarily abandonment, Rule 1003.b. for not reclaiming the location within twelve (12) months after drilling operations. The NOAV specified abatement of plugging and abandoning the well and reclaiming the site by May 15, 2003. The NOAV also directed Antelope submit by May 15, 2003, a written response explaining their temporary abandonment of the well.

                        6. On May 6 and 7, 2003, Antelope plugged and abandoned the Maddy #1 Well.

                        7. By letter dated May 9, 2003, Antelope submitted the written response required in the NOAV. The letter stated that Antelope had overlooked the Maddy #1 Well until contacted by the COGCC.

                        8. Antelope should be found in violation of Rule 308A., for not submitting a Form 5, Drilling Completion Report, within thirty (30) days of the suspension of commenced drilling activities prior to reaching total depth, Rule 301., for not providing written notice of intention to change plans previously approved, Rule 319.b.(1), for not receiving approval of the Director for temporarily abandoning the well and for not closing the well to the atmosphere prior to the temporarily abandonment, Rule 1003.b. for not reclaiming the location within twelve (12) months after drilling operations.

9. Rule 523. specifies a base fine of One Thousand dollars ($1,000) for each violation of Rules 301., 319., and 1003. and a base fine of Five Hundred dollars ($500) for each violation of Rule 308.

                        10. A monetary penalty of One Thousand dollars ($1,000.00) should be assessed against Antelope, in accordance with Rule 523.a. and Rule 523.d., for violation of Rules 308A., 301., 319.b.(1) and 1003.b. A mitigating factor in determining the fine recommendation is Antelope demonstrated prompt, effective and prudent response to the violation.

ORDER

                        NOW, THEREFORE, IT IS ORDERED, that Antelope Energy Company shall be found in violation of Rule 308A., for not submitting a Form 5, Drilling Completion Report, within thirty (30) days of the suspension of commenced drilling activities prior to reaching total depth, Rule 301., for not providing written notice of intention to change plans previously approved, Rule 319.b.(1), for not receiving approval of the Director for temporarily abandoning the well and for not closing the well to the atmosphere prior to the temporarily abandonment, Rule 1003.b. for not reclaiming the location within twelve (12) months after drilling operations for the Maddy #1 Well located in the SE¼ SW¼ of Section 31, Township 10 North, Range 57 West, 6th P.M..

                        IT IS FURTHER ORDERED, that Antelope Energy Company shall be assessed a fine of One Thousand dollars ($1,000) payable within thirty (30) days of the date the order is approved by the Commission for the Maddy #1 Well.

                        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 8, 2003, as of July 8, 2003.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        By

Morris J. Bell, Hearing Officer

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

July 8, 2003

                        AGREED TO AND ACCEPTED THIS _________DAY OF JULY, 2003.

                                                                                      ANTELOPE ENERGY COMPANY

                                                                        By ____________________________________________

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