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. 1V-277

ENCANA OIL & GAS (USA) INC.,                                                                            )

GARFIELD COUNTY, COLORADO                                                                          )

                        1. On February 11, 2004, EnCana Oil and Gas (USA) Inc. ("EnCana") recompleted the Williams Fork Formation in the Sheffield No. 6209 Well ("Well) located in the NE¼ SW¼ of Section 17, Township 6 South, Range 99 West, 6th P.M.

                        2. On March 30, 2004, the Colorado Oil and Gas Conservation Commission ("COGCC") received an Application for Permit to Recomplete, Form 2, the Williams Fork Formation in the Well.

                        3. On May 13, 2004, a Notice of Alleged Violation ("NOAV") was issued to EnCana for violation of Rule 303.b., recompletion to the Williams Fork Formation without a permit. The NOAV required Encana to submit a letter detailing the reason for not complying with Rule 303.b. The abatement date for the NOAV was May 28, 2004.

                        4. On May 27, 2004, COGCC staff received a letter from EnCana explaining its actions. The letter stated that EnCana believed it "had been given verbal permission to recomplete the subject well."

                        5. For the unauthorized completion of the Williams Fork Formation in the Sheffield No. 6209 Well, EnCana should be found in violation of Rule 303.b., failure to obtain an approved Application for Permit to Recomplete to the Williams Fork Formation.

                        6. Rule 523. specifies a base fine of One Thousand dollars ($1,000) per day for violation of Rule 303. The time of the violation is approximately forty-eight (48) days.

                        7. A monetary penalty of Ten Thousand dollars ($10,000.00) should be assessed against EnCana, in accordance with Rule 523.d., for violation of Rule 303.b. An aggravating factor in determining the fine recommendation under Rule 523.d.(1) is that the violation was reckless.

ORDER

                        NOW, THEREFORE, IT IS ORDERED, that EnCana Oil and Gas (USA) Inc. shall be found in violation of Rule 303.b., failure to obtain an approved Application for Permit to Recomplete to the Williams Fork Formation, for the Sheffield No. 6209 Well located in the NE¼ SW¼ of Section 17, Township 6 South, Range 99 West, 6th P.M.

                        IT IS FURTHER ORDERED, that EnCana Oil and Gas (USA) Inc. shall be assessed a fine of Ten Thousand dollars ($10,000.00) for the above violation, payable within thirty (30) days of the date the order is approved by the Commission.

                        IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

and hearing, to alter, amend, or repeal any and/or all of the above orders.

                        IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.

                        IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.

                        Recommended this day of June, 2004.

                        OIL AND GAS CONSERVATION COMMISSION

By

Morris J. Bell, Hearing Officer

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

June 3, 2004

AGREED TO AND ACCEPTED THIS _________DAY OF June, 2004.

ENCANA OIL AND GAS (USA) INC.