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HomeMy WebLinkAbout1.0 ApplicationI7at�: APPLICATION SPECIAL/CONDITIONAL USE PERMIT September 22, 1995 Applicant: Snyder Oil Corporation 1625 Broadway, Suite 2200, Denver, Colorado 80202 Address of Applicant Special/Conditional Use: Water Evaporation Pit Legal Description: Township 6 Smith, Ranges 91 West6rh P.M. - Seri -inn 26: SI E.11; Practical T7ecscription (location with respect to highways,- county roads, and residences):- From the intersection of County Roads 346 and 319, thence south approximately 1.5 miles. Proposed Evaporation Pit will be on the east side of County Raod 319. Requirerncats: 1_ Plans and specifications for proposed use (hours of operation, number of vehicles/day, location and size of structures, etc.)_ 2. Existing or proposed method of sewage, source of disposal and water. Road access and other information deemed necessary to explain proposed use. 3. A vicinity map drawn to scale depicting the subject property, Iocation. and use of building and structures on adjacent lots. tions S_03-5.03.12 of 4. An impact staternent on the proposed use where required by Sec Zoning Regulations. property 5_ A copy of Assessor's map showing property: and a listing of all adj3 oining pro Pe owners of saidS property. fe 6. A base fee of 425.00 shall be charged for each application and shall be submitted with the application, additional charges may beim posed if county review costs exceed the base fee. yourproperty d title insurance)- 7. Attach a copy of proof of ownership for ( eed If public notice is required, notice provided by the Planning Depart shall be sent out at 'least fifteen (15) days prior to hearing by return -receipt mail to all the above noted adjor� g p ap bey owners. Mailing is the applicant's rponsibihty and proof of mailing must be p ntedhearing. Additionally. the same no lice shall be publ ished one (I) time in the official County .ews cr at least fifteen (15) days prior to such hearing date. Applicant shall bear the cost of p u.blication and be icsponsible for presenting the "Proof of Publication" at the hearing. The above information is correct to the best of my kr:owl Applicant - Snyder ail Corporation September 22, 1995 Date SNYDII=R 01L CORPORATION DENVER, COLORADO SWNE-SECTION 26 - T6S - R93W, 6th P.M. GARFIELD COUNTY, COLORADO l!- 4 —q< Snyder Oil Corporation September 22, 1995 Mr. Mark L. Bean, Director Planning Department Garfield County, Colorado 109 Th Street, suite 303 Glenwood Springs, Co. 816012 RE: Special Use Permit - Produced Water Evaporation Pit Dear Mr Bean: 1625 Broadway Suite 2200 Denver, CO 80202 303/592-8500 Fax 303/592-8600 Attached, please find an application for the captioned facility. Along with the application you will find the following Exhibits A - N: Exhibit "A" - Property description Exhibit "B" - Adjoining property owners Exhibit "C" - Surface topographic map Exhibit "D" - Assessors map Exhibit "E" - Garfield County Driveway Permit Exhibit "F" - Map of the facility with detail Exhibit "G" - Letter from surface owner Exhibit "H" - Fire control measures Exhibit "I" - Water production estimates Exhibit "J" - Aeration system Exhibit "K" - Evaporation/ Aeration calculations Exhibit "L" - Liner installation procedures Exhibit "M" - Soil features Exhibit "N" - Description of the berms *Please note that the final lease has not been negotiated with Mr. Benzel, the surface owner, hence the letter from him. The lease that we are negotiating does contain a right-of-way grant. The purpose of this facility will be to serve as collection point for produced water from the 34 producing wells that SOCO has in proximity to the proposed facility. We are currently producing approximately 150 - 200 barrels of water today which is being collected and hauled to the waste disposal facility in Debeque. We believe that once operational, this facility will significantly cut down on the truck traffic that is associated with our current operations and will alleviate some of the increased traffic that is sure to come in the future as we expand our operations. EXHIBIT "B" ADJOINING PROPERTY OWNERS OF THE RIFLE WATER EVAPORATION PIT 1. Rifle Land Association, Ltd. (Vacant Land - Wooded Areas) 165 South Union Blvd., Suite 758 Lakewood, Colorado 80228-2213 No Telephone Listing 2. United States Department of the Interior (Vacant Land - Heavily Wooded - Steep Slopes) Bureau of Land Management Glenwood Springs Resource Area 50629 Highway 6 & 24 P. O. Box 1009 Glenwood Springs, Colorado 81602 970-945-2341 3. Robert T. Lazier (Vacant Land - Wooded Areas) P. O. Box 1325 Vail, Colorado 81658-1325 Non -Published Telephone Number 4. Thomas B. Kell (Vacant Land - Wooded Areas) 1954 Perrin Road Manteca, California 95337-9439 209-823-3639 5. Phillip A. Miller (Cabin Home - Pasture Land - Wooded Areas) 3035 Anderson Snow Road Brooksville, Florida 34609-5202 904-796-0906 6. Harlan R. and Ronnie Lee Runion (Cabin Home - Wooded Areas) 6269 Clearwater Drive Spring Hill, Florida 34606-5905 Non Published Telephone Number 7. Shaeffer, Ltd. (Farming Operations - No Dwellings) 5957 Road 319 Rifle, Colorado 81650 970-876-2819 8. Harold B. and Roberta Shaeffer (Shaeffer Residence - Farming Operations) 5957 Road 319 Rifle, Colorado 81650 970-876-2819 9. K. R. K., Ltd. (Farming Operations - No dwellings) c/o Katherine Rogers 7010 West Oregon Drive Lakewood, Colorado 80232 303-985-1929 10. B. J. M., Ltd, (Farming Operations - No Dwellings) c/o Barbara Morris 20 S. 35th Street Boulder, Colorado 80303 303-494-9258 11. Benzel Livestock Company (Farming and Pasture Operations - No Dwellings) c/o John Benzel 7260 Highway 179 Sedona, Arizona 86351 602-284-0716 1 1 District: 1 Road: 1 Permit #: III 319 040-95 U GARFIELD COUNTY APPLICATION F O R DRIVEWAY PERMIT Application Date 09-06-1995 I, SNYDER OIL COMPANY (herein called "Applicant"), hereby requests permission and authority from the Board of County Commissioners to construct a driveway approaches) on the right-of-way of Garfield County Road Number 319 adjacent to Applicant's property located on the EAST side of the road, a distance of 1.5 mile(s) from INT. OF CO RD 352 for the purpose of obtaining access to DRILL SITE Applicant submits herewith for the consideration and approval of the Board of County Commissioners, a sketch of the proposed instal- lation showing all necessary specification detail including (1) front- age of lot along road, (2) distance from centerline of road to property line, (3) number of driveways requested, (4) width of pro- posed driveway(s) and angle of approach, (5) distance from driveway to road intersection, if any, (6) size and shape of area separating driveways if more than one approach, and (7) setback distance of building(s) and other structures or improvements. GENERAL PROVISIONS FIRST: The Applicant represents all parties in interest, and affirms that the driveway approach(es) is to be constructed by him for the bona fide purpose of securing access to his property and not for the purpose of doing business or servicing vehicles on the road right-of-way, SECOND: The Applicant shall furnish all labor and materials, perform all work, and pay all costs in connection with the construction of the driveway(s) and its appurtenances on the right-of-way. All work shall be completed within 30 days of the Permit date. THIRD: The type of construction shall be as designated and/or approved by the Board of. County Commissioners or their representative, and all materials used shall be of satisfactory quality and subject to inspec- tion and approval of the Board of County Commissioners or their representative. FOURTH; The traveling public shall be protected during the instal- lation with proper warning signs and signals and the Board of County Commissioners and their duly appointed agents and employees shall -be held harmless against any action for personal injury or property damage sustained by reason of the exercise of the Permit. FIFTH: The Applica.nt`-shall assume responsibility --(or the removal or clearance of snow, ice or sleet upon any portion of the driveway ap- proach(es) even though deposited on the driveway(s) in the course of the County snow removal operations. SIXTH: In the event it becomes necessary to remove any right-of-way fence, the posts on either side of the entrance shall be securely braced before the fence is cut to prevent any slacking of the remain- ing fence, and all posts and wire removed shall be turned over to the District Road Supervisor of the Board of County Commissioners. SEVENTH: No revisions or additions shall be made to the driveway(s) or its appurtenances on the right-of-way without the written permis- sion of the Board of County Commissioner_, EIGHTH: Provisions and specifications outlined herein shall apply on all roads under the jurisdiction of the Board of County Commissioners of Garfield County, Colorado, and the Specifications, set forth on the attached hereof and incorporated herein as conditions hereof. SPECIAL CONDITIONS RESPONSIBLE FOR TWO YEARS FROM DATE OF COMPLETION 15" CULVERT REQUIRED MUST GRAVEL 100 FT FROM COUNTY ROAD In signing this application and upon receiving authorization and permission to install the driveway approach(es) described herein the Applicant signifies that he has read, understands and accepts the foregoing provisions and conditions and agrees to construct the drive- way(s) in accordance with the accompanying specificat" n plan reviewed and approved by the Board of County Commissioie—. Witness: 'Signed: (Signa ure of Applicant) (Address) CC- /�GG(Telephone Number) PERMIT GRANTED THIS (10161- DAY OF y�I fYt3LL19 `1-`l , SUBJECT TO THE PROVISIONS, SPECIFICATIONS, AND CONDITIONS STIPULATED HEREIN. For Board of County Commissioners of Garfield County,• Colorado BY: SPECIFICATIONS 1. A driveway approach is understood to be that portion of the high- way right-of-way between the pavement edge and the property line which is designed and used for the interchange of traffic between the road- way pavement and the abutting property. 2. At any intersection, a driveway shall be restricted for a suf- ficient distance from the intersection to preserve the normal and safe movement of traffic. (It is recommended for rural residence entrances that a minimum intersection clearance of 50 feet be provided and for rural commercial entrances a minimum of 100 feet be provided.) 3. All entrances and exits shall be so located and constructed that vehicles approaching or using them will be able to obtain adequate sight distance in both directions along the highway in order to maneuver • safely and without interfering with highway traffic. 4. The Applicant shall not be permitted to erect any sign or display material, either fixed or movable, on or extending over any portion of the highway right-of-way. 5. Generally, no more than one approach shall be allowed any parcel or property the frontage of which is less than one hundred (100) feet. Additional entrances or exits for parcels or property having a frontage in excess of one hundred (100) feet shall be permitted only after showira of actual convenience and necessity. 6. All driveways shall be so located that the flared portion adjacent to the traveled way will not encroach upon adjoining property. 7. No commercial driveway shall have a width greater than thirty (30) feet measured at right angles to the centerline of the driveway, except as increased by permissible radii. No noncommercial driveway shall have a width greater than twenty (20) feet measured at right angles to the centerline of the driveway, except as increased by permissible radii. 8. The axis of an -approach to the road may be at a right angle to the centerline of the highway and of any angle between ninety (90) degrees and sixty (60) degrees but shall not be less than sixty (60) degrees. Adjustment will be made according to the type of traffic to be served and other physical conditions. 9. The construction of parking or servicing areas on the highway right-of-way is specifically prohibited. Off-the-road_pa.rking facil- ities should be provided by commercial establishments ror customers venlcles, 10. The grade of entrance and exit shall slope downward and away from the road surface at the same rate as the normal shoulder slope and for a distance equal to the width of the shoulder but in no case less than twenty (20) feet from the pavement edge. Approach grades are restricted to not more than 10 percent (10%), 11. All driveways and approaches shall be so constructed that they shall not interfere with the drainage system of the street or highway. The .Applicant will be required to provide, et his own expense, drain- age structures at entrances and exits which will become an integral part of the existing drainage system. The dimensions of all drainage str'uctur'es must be approved by the Board of County Commissioners or their representative prior to installation. NOTE_ This permit s=hall be made available at the site where and when work is being done, A work sketch or drawing of the proposed driveway(') must accompany application, No permit will be issued without drawing, blueprint, or `.'ketch. <+> GARFIlh D COUNTY ROAD & BRIDGE DEP,-r,TMENT +=> SPECIAL PROVISIONS FOR EXCAVATION OF ROAD SURFACE AND INSTALLATION RMIT #: 040-95 U PERMITTEE: SNYDER OIL COMPANY INSPECTOR: EARL JOHNSON SUB—CONTRACTOR: SMITH PIPELINE 1) ANY OVERSIZED MATERIAL (LARGER THAN 10 INCHES IN DIAMETER); THAT IS NOT UTILIZED IN BACKFILL WILL BE HAULED OFF BY PERMITTEE. FURTHER, ANY FROZEN MATERIAL WILL BE REMOVED FROM SITE BY PERMITTEE. 2) WHEN A PAVED OR CHIPPED SURFACE IS CUT, IT IS TO BE REPLACED WITH A MINIMUM TWO INCH (2") HOTMIX ASPHALT PATCH. A TEMPORARY PATCH WITH COLD MIX ASPHALT WOULD BE ALLOWED, WHICH WOULD BE REPLACED 'WITH HOTMIX ASPHALT WHEN THE WEATHER OR AVAILABILITY OF MATERIALS ALLOWS THE WORK TO BE COMPLETED. AN ASPHALT OR CHIPPED SURFACE CUT WOULD REQUIRE THE ROAD TO BE STRAIGHT CUT AND SQUARED BY MEANS OF A PAVEMENT CUTTER OR SAW. A CHIPPED SURFACE CUT 'WILL REQUIRE A SEAL CUT OF THE PATCH WHICH WILL BE FULL WIDTH OR HALF WIDTH OF ROADWAY OVERLAPPING EDGES BY TWO FOOT MINIMUM WHICHEVER IS REQUIRED TO INSURE AN ADEQUATE SEAL OVER THE UNDISTURBED PORTION OF THE ROADWAY IN THE VICINITY OF THE EXCAVATION. ASPHALT HOTMIX OR COLD PATCHES WILL BE COMPLETED IN A MAXIMUM OF FIVE WORKING DAYS, WEATHER PERMITTING. :3) WHEN POSSIBLE ALL INSTALLATIONS SHOULD AVOID THE TOP EDGE OF A FILL SLOPE, 4) INSTALLATIONS IN DRAINAGES SUBJECT TO FLASH FLOODING, WILL HAVE A MINIMUM BURY OF 4 FEET DEEPER THAN NORMAL FLOW LINE AT NEAREST ABUTMENT OR 'WING WALL. 5) INSTALLATIONS AT CULVERT CROSSINGS 'WILL BE BURIED BENEATH THE CULVERT WITH A MINIMUM SEPARATION OF 18 INCHES BETWEEN INSTALLATION AND THE BOTTOM OF THE CULVERT, 6) OPEN TRENCHES ADJACENT TO THE TRAVELED ROADWAY SHALL BE BACKFILLED DAILY TO WITHIN 100 OF THE WORKING AREA OF THE TRENCH, AND SHALL BE BARRICADED 'WITH WARNING DEVICES AFTER DARK. 7) IN AREAS BEING DISTURBED 'WHERE VEGsET,ATION IS ESTABLISHED, RESEEDING WITH A GRASS AND CLOVER MIXTURE EITHER BY BROADCASTING OR DRILLING, 'WITH SEED MIXTURES SUITABLE TO THE CLIMATIC CONDITIONS OR EXISTING VEGETATION WILL BE PERFORMED, USE ONLY CERTIFIED WEED—FREE SEED, NOXIOUS WEED CONTROL WILL BE ONGOING ALONG WITH REVEGET.ATION. 8) THE PERMITTEE SHOULD CHECK THE R—O—W OF SURROUNDING, LANDOWNERS TO SEE IF OTHER PERMITS ARE REQUIRED, I.E., BLM, FOREST SERVICE. FORELDA OU T SNYDER CSL COMPANY (PERMITTEE) 10" Steel Manifold 4" Fiberglass Linepipe -c N m v o) o Ec w LL p - o c o w t -0 Q� d O c 0 O u co o a, U rn o �= v N E ` c o o O 6" Butterfly Val c cc c rn 7 _ V N O 3 > > a, rn - o ---- ✓ o. a, E r .°- 0_ p N c O � E 0 00 m O ▪ X v � O X EXHIBIT "F" attach. W_ 0 SOCO WATER DISPOSAL FACILITY OIL SKIMMING SYSTEM ac O 3g 12 a c — o o °U o - N• c m c o+ O Q C 6 � N , ° • o E 0.7, L O V O � O > O O m 0 4" Vent Line ,0Z ,91 10. rn v 0 o�I r� r 771 J L _ 1L L_ s s S H N \ ° O co- -c �- 1- 0) m'n aa -o ,£ --► ,rt T 1 IL` o 0 t W V N rZilz- + r — -------=moi -- —---I-111I.L L -- i ,OZ r -i 22 oo„, 3a� EXHIBIT "F" attach. 2 FRONTAL VIEW ( INTERNAL PIPING H LL • 2 W Oo cn W a • ? C W co 43 5 O 0 0 N Exhaust Stack 0 w c c c ,OZ „9 ,9t Q' E O d V.n r v 0 s E z° c 1 ,OZ „ 9 - ,91 „E „E c c - y w E D 0 O N EXHIBIT "F' attach. 3 (EXTERNAL PIPING) SOCO WATER DISPOSAL FACILITY OIL SKIMMING SYSTEM IJ i C__��J O s • a N O LL 0l 1::.L I:r L•' n- o N a_ LE T— O o N (INTERNAL PIPING) 0 H EXHIBIT "F" attach. 4 485580 B-959 P-46 11/20/95 03:29P PG 1 OF 2 REC DOC NOT MILDRED ALSDORF GARFIELD COUNTY CLERK AND RECORDER 11.00 MEMORANDUM OF SURFACE LEASE AGREEMENT State (situs of land): Colorado County (situs of land): Garfield Lessor: Benzel Livestock Company 980 E. Saddlehorn Lessor's Address: Sedona, AZ 86351 Lessee: Snyder Oil Corporation 1625 Broadway, Suite 2200 Lessee's Address: Denver, CO 80202 Date Executed: November 16, 1995 Effective Date: November 6, 1995 As of the Effective Date stated above, Lessor, named above, executed and delivered to Lessee, named above, a Surface Lease Agreement (the "Lease") in which Lessor granted, leased, and let to Lessee lands (the "Lands") located in the County and State named, described as follows: Township 6 South, Range 93 West, 6th P.M. Section 26: SW/4NE/4 and that portion of the SE/4NE/4 which contains the tract beginning at a point in the NE/4 of Section 26 which bears S. 44°53'54" W. 1841.48 feet from the Northeast Corner of said Section 26; thence S. 00°32'00" W. 700.00 feet; thence N. 89°28'00" W. 530.00 feet; thence N. 00°32'00" E. 700.00 feet; thence S. 89°28'00" E. 530.00 feet to the point of beginning. Basis of bearings is the East line of the NE/4 of said Section 26, which is assumed from G.L.O. information to bear North. Containing 40.5 acres more or less Lessee shall have the right to use the demised premises for the construction of one (1) or more evaporation pits. Lessee may also use the demised premises as an ancillary use for storage purposes of equipment, materials, supplies and a storage tank for the storage of liquid hydrocarbons, together with piping lines and other facilities necessary for its operation. 2510-LK-H:\W P\DOCS\AGREMENT. 95\BENZEL.SUR 1 of2 Sn Lie✓ o;I Corp0✓Qr'ov,. Io2 $road wa 5Uiie 220 Denver, Co go ?. Attu! Mare-L'ltov✓ \\1' 485580 B-959 P-47 11/20. 5 03:29P PG 2 OF 2 This Memorandum of Surface Lease Agreement is executed by the Lessee and placed of record in the County in which the Lands are located for the purpose of placing all persons on notice of the existence of the Lease which Lease is not, at the request of both parties, being placed of record. LESSEE: SNYDER OIL CORPORATION By: STATE OF COLORADO CITY AND ) ss. COUNTY OF DENVER Mark J. Chf6ury Attorney -in -Fact The foregoing instrument was acknowledged before me this 6,7k day of A/oven/l,beV , 1995, by Mark J. Choury, Attorney -in -Fact of SNYDER OIL CORPORATION, a Delaware corporation. WITNESS my hand and official seal. 7vla G'.. i AL Notary Public My Commission Expires: Address: 1625 Broadway, Suite 2200 Denver, Colorado 80202 2510 -LK -HA W PIDOCSUGREMENT.9S'BENZEL.SUR 2of2 reloYi1 401 Shade( al (2o vp &KA -110,,,% r�yS Proadway, 5, e y200 penvev,eO 01 : j 1ai-L✓ ahoC / SNYDER OIL TEL Nov 14"5 1D:U4 No.UUL r.u. SURFACE LEASE AGREEMENT A. PARTIES The parties to this Agreement are BENZEL LIVESTOCK COMPANY, a Colorado partnership (Lessor), and SNYDER OIL CORPORATION, a Delaware corporation authorized to do business in the State of Colorado (Lessee). E. RECITALS The reason and purpose for entering into this Agreement is premised upon the following_ 1. Lessor is the owner of a tract of land located in the County of Garfield and State of Colorado which Lessee believes is suitable for its use for the purposes hereinafter set forth. 2. Lessee is in the business of the extraction and distribution of oil, gas and petroleum products. Lessee desires to construct upon the land of Lessor one or more evaporation pits and to use other portions of the Lessor's property for storage for incidental spare equipment to be used in the ongoing operations of Lessor. C. AGREEMENT The parties agree as follows: 1. Recitals True and Correct. The recitals set forth herein are true and correct. 2. Premises. Lessor hereby leases to Lessee the real property described as follows: Township Q South. Range 93 West. 6tb P.M Section 26: SW/4NE/4 and that portion of the SE/4NE/4 which contains the tract beginning at a point in the NE/4 of Section 26 which bears S. 44°53'54" W. 1841.48 feet from the Northeast Corner of said Section 26; thence S. 00°32'00" W. 700.00 feet; thence N. 89°28'00" W. 530.00 feet; thence N. 00°32'00" E. 700.00 feet; thence S. 89°28'00" E. 530.00 feet to the point of beginning. Basis of bearings is the East line of the NE/4 of said Section 26, which is assumed from G.L.O. information to bear North. Containing 40.5 acres more or Tess Garfield County, Colorado 251V.Lw.11:.WI'I13UL,AGM12 MLNT.93WENZGL2.LEC Page / lofty SNYDER OIL TEL:9-1-303-592-4617 Nov 14'5 i :u5 NO.uub r .u.) 3. Roadway. Included with the lease of the demised premises described in paragraph C.2 above, Lessee shall be entitled to the use of an access road twelve (12) feet in width extending from the county road now located westerly of the demised premises to the demised premises, the northerly boundary of which shall be at all points ninety (90) feet southerly of the northerly boundary of said Section 26. The roadway shall be constructed at the sole cost and expense of the Lessee in conformity with the following: (a) A cattle guard shall be installed at the westerly end of the roadway just prior to its intersection with the county road. (b) The surface shall be gravel or asphalt at the option of Lessee. (c) The roadway shall be maintained at the sole cost and expense of Lessee. 4. Use of Premises. Lessee shall have the right to use the demised premises primarily for the construction of one (1) or more evaporation pits approximately two hundred fifty (250) feet square, four (4) to ten (10) feet deep, with a three (3) to four (4) foot earthen berm surrounding each pit. Each pit will be Tined with impermeable plastic and covered with netting to protect fowl_ Lessee may also use the demised premises as an ancillary use for storage purposes of equipment, materials, supplies and a storage tank for the storage of liquid hydrocarbons, together with piping lines and other facilities necessary for its operation. 5. Term. The term of this Lease shall commence on date of execution hereof and shall extend for a period of two (2) years and so long thereafter as Lessee continues to utilize the demised premises for the purposes herein stated and otherwise complies with all of the terms and conditions of this Lease. Rental. Lessee shall pay to Lessor as rental for the demised premises the following: (a) For the period November 6, 1995 through November 5, 1997, Two Thousand Four Hundred Dollars ($2,400.00) per year. (b) For the annual periods commencing November 6, 1997 through November 5, 1999, Three Thousand Six Hundred Dollars ($3,600.00) per year. (c) For the annual periods commencing November 6, 1999, through November 5, 2001, Four Thousand Eight Hundred Dollars ($4,800.00) per year. (d) For each annual period commencing November 6, 2002, and thereafter, Six Thousand Dollars ($6,000.00) per year. Lessee shall pay to Lessor the first two (2) year rent in advance, receipt of which is Page 2 of 8 25111-I K -H ! W? Cq\ACRFM1IENT 93\BENLEL2. LES SNYDER OIL TEL :9-1-303-532-4b1r hereby confessed and acknowledged. Nov 14'b NO.vub r.uu 7. Permits and Licenses. Lessee shall obtain from all local and state governments having jurisdiction in the premises al! permits and licenses necessary to operate the premises. The use of the leased premises shall not commence until such time as all such permits and licenses have been obtained. Lessee shall not use the demised premises or permit anything to be done in or about the premises which will in any way conflict with any law, state ordinance or government rule or regulation which may be hereinafter enacted or promulgated by any entity having jurisdiction. 8. Compliance With Laws. Lessee shall, at Lessee's sole cost and expense, promptly comply with all laws, statutes, ordinances or governmental rules, regulations or requirements now in force or which may hereafter be in force relating to or affecting the condition, use or occupancy of the premises. The judgment of any court of competent jurisdiction or the admission of Lessee in any action against Lessee, whether Lessor be a party thereto or not, that Lessee has violated any law, statute, ordinance or governmental rule, regulation or requirement, shall be conclusive of the fact as between Lessor and Lessee. Lessee shall keep the premises free and clear from any liens arising from any work performed, materials furnished or obligations incurred by Lessee. If Lessee shall be in default in paying any charge for which a mechanic's lien claim or suit to foreclose a lien has been recorded or filed, Lessor may (but without being required to do so) pay said lien or claim and any costs. The amounts so paid, together with reasonable attorney's fees incurred in connection therewith, shall be immediately due and owing from Lessee to Lessor with interest at the rate of eighteen percent (18%) per annum from date of Lessor's payments. Should any claim or lien be filed or recorded against the leased property, or any action affecting title thereto be commenced, Lessee shall give Lessor written notice thereof as soon as it has knowledge thereof. Lessor shall have the right to demand lien waivers from all contractors, subcontractors and materialmen working on the premises. 9. No Assignment. Lessee shall not assign, transfer, mortgage, hypothecate, pledge or encumber this Lease or any interest therein and shall not sublet the same or any part thereof, or any right or privilege appurtenant thereto, or suffer any other person (the employees, agents, servants and invitees of Lessee excepted) to occupy or use the premises or any portion thereof without the written consent of Lessor being first obtained. Any such assignment or subletting without such consent shall be void and shall, at the option of Lessor, constitute a default under this Lease. Lessor's consent shall not be unreasonably withheld. 10. Insurance. Lessee shall, at Lessee's expense, obtain and keep in force during the entire period that this Lease remains in effect, a policy or policies of public liability insurance insuring Lessee against liability for personal injury and property damage arising out of the use, occupancy or maintenance of the premises. The limits of coverage under such 2510 -LK -H `.U'P,DLICS AGKlh1YN'1'.'lSWYNLYL2.LYS Page 3 of 8 SNYDER OIL TEL:9-1-303-592-4617 Nov 14'95 15:ub Nu.uub r.135 insurance shall not, however, limit Lessee's liability to Lessor under other provisions of this Lease. Said insurance carried by Lessee shall have Lessor's protective liability endorsements thereto. Lessor may, but shall not be obligated to, obtain such insurance if Lessee shall fail to procure and maintain the same, but any such insurance obtained by Lessor shall be at the expense of Lessee. Insurance required hereunder shall be at minimum in the amount of One Million Dollars ($1,000,000) per person, One Million Dollars ($1,000,000) per occurrence, and One Million Dollars ($1,000,000) property damage. Such policy shall provide for ten (10) days prior written notice to Lessor of lapse, cancellation or reduction of coverage for any reason whatsoever. Lessee shall deliver to Lessor prior to occupancy of the premises copies of policies of liability insurance required hereunder or certificates evidencing the existence and amount of such insurance with Lessor named as an additional named insured. 11. Inspection. Lessor reserves and shall have at all times the right to enter the premises to inspect the same. 12. Indemnity of Lessee. Except for any claims arising out of or due to acts or omissions of Lessor, Lessee shall indemnify and hold Lessor harmless against and from all claims arising from Lessee's use of the premises or from any activity, work or other thing done permitted or suffered by Lessee in or about the premises. Lessee shall further indemnify and hold Lessor harmless against and from any and all claims arising from any breach or default in the performance of any obligation on Lessee's part to be performed under the terms of this Lease, or arising from any act or negligence of Lessee or any officer, agent, employee, guest or invitee of Lessee, and from all and against all costs, attorney's fees, expenses and liabilities incurred in or about such claim or action or proceeding brought thereon. in any case, upon notice from Lessor, Lessee shall defend the same at Lessee's expense by counsel chosen by Lessee. Lessee, as material part of the consideration to Lessor, hereby assumes all risk of damage to property or injury to persons in or about the leased premises from any cause other than Lessor's negligence, acts or omissions. Lessee hereby waives all claims in respect thereof against Lessor. Lessor or its agents shall not be liable for any damage to property entrusted to employees of Lessee, nor from loss or damage to any property by theft or otherwise, nor from any injury to or damage to persons or property resulting from fire, explosion, water or rain which may leak from the premises. It is specifically understood and agreed that the indemnity herein contained shall include any and all forms of hazardous waste which may be brought upon, allowed to escape from or emanate in any fashion from the premises. 13. Termination of Lease. Upon termination of this Lease, Lessee shall remove all structures, pipes, tanks and other equipment, materials and supplies placed upon the premises and shall restore the surface to a condition as nearly as possible as existed prior to the execution of this Lease, including revegetation. The restoration and reclamation of the premises shall be completed at the sole cost and expense of Lessee within three (3) months of the date of the termination of this Lease. As security therefor, 25 i 9, LK.l l \N' P\DUCSUGRPMPNT.95\DPNZPLl.LPS P..gc 4 of 8 SNYDER OIL TEL:9-1-303-592-4617 Nov 14'95 15:0? No.006 P.06 Lessee shall maintain during the term of this Lease a bond issued by an entity or institution acceptable to Lessor and for the benefit of Lessor in the amount of Fifty Thousand Dollars ($50,000.00). Evidence of the bond acceptable to Lessor shall be delivered to Lessor prior to Lessee taking possession of the premises. 14. Fencing. Prior to Lessee commencing use of the evaporation pond or ponds, Lessee shall fence the premises in a manner which will prevent livestock and third persons from entering the premises. Entrance to the premises shall be gated in such a fashion that third parties cannot gain entrance to the premises. Lessee shall also maintain the premises in a neat, orderly and weed -free condition and shall landscape the same in a fashion to mitigate the view from the County road. 15. Default by Lessee. The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Lessee: (a) The vacating or abandonment of the premises by Lessee; (b) The failure by Lessee to make any payment of rent as and when due where such failure shall continue for a period of fifteen (15) days after Lessor provides written notice to Lessee of its failure to pay the rent. Such notice shall be sent to Lessee in the manner provided in paragraph C.18 hereafter. In the event rental is not paid within a period of five (5) days after the due date. Lessee shall pay a penalty of five percent (5%) of the annual rental in addition to all other rental due and payable hereunder. (c) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, where such failure shall continue for a period of thirty (30) days after written notice thereof by Lessor to Lessee. 16. Lessor's Remedies. In the event of any default or breach by Lessee, Lessor may at any time thereafter, with or without notice or demand and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or breach: (a) Terminate Lessee's right to possession of the premises by any (awful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the premises to Lessor. In such event Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee's default, including but not limited to the cost of recovering possession of the premises, expenses of reletting including necessary renovation and alteration to the premises, reasonable attorney fees, and recourse to the benefit of the bond posted pursuant to paragraph C.13 above. 2310-LK.11.\\VV CS1AGRCAtQNI'.93WENZLL2.LHS %Ggi,5of8 SNYDER OIL TEL:9-1-303-592-4617 Nov 14'95 15:07 No.U06 N.U( 17. Eminent Domain. If the premises shall be taken or appropriated by any public or quasi - public authority under the power of eminent domain, this Lease shall terminate and Lessor shall be entitled to any and all income, rent, award or any interest therein whatsoever which may be paid or made in connection with such public or quasi -public use or purpose for such taking. Lessee shall have no claim against Lessor for the value of any unexpired term of this Lease. If any part of the premises may be so taken or appropriated, Lessor shall have the right, at its option, to terminate this Lease and shall be entitled to the entire award resulting from such taking. 18. Notices. All notices and demands which may or are to be required or permitted to be given by either party to the other hereunder shall be in writing. All notices and demands shall be sent by United States mail, certified, return receipt requested, postage prepaid, addressed as follows: Lessor: 980 E. Saddlehorn Sedona, AZ 86351 Lessee: 1625 Broadway, Suite 2200 Deriver, CO 80202 All notices and demands given hereunder shall be considered to be given and delivered upon deposit in the United States mail as herein provided. 19. Binding Effect. The terms and conditions hereof shall extend to and be binding upon the parties hereto, their successors and assigns of all kinds. 20, Memo of Lease Recorded. A short form of this Lease may be recorded by the parties and, if recorded, Lessee covenants and agrees to record a release and quit claim deed to the premises within thirty (30) days following the termination of the Lease. 21. Quiet Possession. Lessee shall have the quiet possession of the leased premises for the entire term hereof subject to all the provisions of this Lease. 22. Entire Agreement. This Lease contains all the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease. No prior agreements or understandings pertaining to any such matters shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties or the respective successors in interest. 23. Attorney Foos. In the event any action or proceeding is brought by either party against the other under this Lease, the prevailing party shall be entitled to recover all costs and expenses, including the fees of its attorneys in such amount as the court may adjudge reasonable as attorney's fees. 2510 LIC 41:\U'PU,O,:ti1A(:RF.I.I1,NT OMBF..NIFI.31.[$ Page 6 oJ 8 SNYDER DIL TEL:9-1-303-592-4617 Nov 14'95 15:08 No.006 P.08 24. Sale of Premises. In the event of any sale of the premises, Lessor shall be, and is hereby, freed and relieved of liability under any and ail of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after consummation of such sale. Upon any such sale or portion thereof containing the premises, Lessee shall attorn to the purchaser in all respects under the terms and provisions of this Lease. 25, Remedies Not Exclusive. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all the remedies at law or in equity. 26. Governing Law. This Lease shall be governed by the laws of the State of Colorado. 27. Signage. Lessee shall not place any sign upon the premises without Lessor's prior written consent, with the exception of such signs as may be required by governmental entities having jurisdiction. IN WITNESS WHEREOF, the parties hereto have set their hands and seals on the day and year set opposite the name of each. Date: /% /65 " `ls Date: 11(005- 25 1(00`7 25 Io-LK.H'. W PU)(K:\SAf:RFMFNT 0.S1BFNZEL2.LES BENZEL LIVESTOCK COMPANY John Benzel e: President SNYDER OIL CORPORATION By: Mark J. Chour Title: Attorney -in -Fact l'age 7 af.9 SNYDER OIL TEL STATE OF COLORADO CITY AND COUNTY OF DENVER The foreg Adorn Nov 14'95 15:U3 No.UUb V.U'J ACKNOWLEDGEMENTS To Surface Lease Agreement ) as. nt was acknowledged before me this b day of i! -C,612-, ER OIL CORPORATION, a Delaware corporation. STATE OF ARIZONA COUNTY OF YAVAPAI lal seal. ) ss ) , 1995, by Mark J Choury, • Lary Publ. Address: 1625 Broadway, Suite 2200 Denver, Colorado 80202 On this I day of /`1o'eniLe'v 1995, before me personally appeared John Benzel, to me personally known, who, being by me duly sworn, did say that he is the President of BENZEL LIVESTOCK COMPANY, and that said instrument was signed and sealed In behalf of said partnership by authority of the partnership agreement, and said John Benzel acknowledged said instrument to be the free act and deed of said partnership. WITNESS my hand and official seal. OFFlCIAL $PAL. ANNA L.NUANEZ Nouiy Public • gots of Mimi AVAPAICOUNIY l di Apr* 7. MO 2 IU.LK-H,WYJYX St&LiRFAMTIT 05mRFP17F.L3. LES Notary Public Page 8 of 8 SURFACE LEASE AGREEMENT— p�p�TI� This Lease is entered into this 1st day of qus�ps0.4)t' ani ptween BENZEL LIVESTOCK COMPANY, aartnershi °` p p, whose c�kess is 980 E. Sa!d Pehorn, Sedona, AZ 86351, hereinafter called "Lessor", and SNE7ER OfE"i27R"FOI!.AT whose 01'0 address is 1625 Broadway, Suite 2200, Denver, CO 8, 1Tei`Eicialitrer called "Lessee". WITNESSETH: THAT Lessor, as owner of the tract of lands hereinafter described, does hereby exclusively let, lease and demise to Lessee, its successors and assigns for the term of two (2) years, and so long thereafter as Lessee or its successors or assigns shall use such lands as contemplated hereunder, commencing on the day first mentioned above, for the purposes hereinafter stated, a tract of land in Garfield County, State of Colorado, as follows, to -wit: (to be added based on survey) as depicted on Exhibit "A" attached hereto and by this reference made a part hereof. Lessee shall have the right to use said tract as a storage and supply yard for the storing, warehousing, supplying and handling of oil field tools, equipment, materials and supplies, with the right to erect and maintain thereon such buildings, structures, fences and roadways as Lessee may elect to erect and maintain and to construct, install, maintain, operate, repair, replace and remove therefrom an evaporation pit and associated tanks, pumps and structures, including, but not limited to, above -ground storage tanks for the storage of liquid hydrocarbons from whatever source collected or gathered, drain lines, pumps, drain pits, pipes and other appurtenant equipment -- - oaid lands and adjacent lando of Grantor. In consideration of the rights granted herein, Lessee agrees to pay in advance 'YS •.,;ear ' _x s o the annual rental for each year after the initial two (2) year period, the sum being as follows: a) for the annual periods commencing August 1, 1997 and August 1, 1998, $2400 per year; and b) for the annual periods commencing August 1, 1999 and August 1, 2000, $3600 per year; and c) for the annual periods commencing August 1, 2001 and August 1, 2002, $4800 per year; and d) for each y ar hr? hod commencing August 1, 2003 and thereafter, $6000 per year. The receipt and sufficiency of the consideration for the initial two (2) year term, is hereby acknowledged by Lessor, and it is mutually understood and agreed between the parties as follows: 1. Lessee agrees to comply with all applicable state and local regulations, and to secure all applicable permits required by governmental authority t' 1 =:d 2. Lessee shall have unlimited access to the leased premises. However, Lessee agrees to take reasonable efforts to limit such access to employees, agents and business invitees for related business; 3. Failure of Lessee to tender the annual rental on or before the date due 2510-LK-H:IWPIDOCS W GREMENT.95\BENZEL. LES Page 1 of 3 shall not cause an automatic termination of this Lease. Rather, in such event Lessor shall provide Lessee with written notice of the failure to pay. Such notice shall be sent by Certified Mail. If Lessee fails to tender such payment within thirty (30) days of its receipt of such notice, this Lease will automatically terminate. Provided, however, if Lessee continues to tender the advanced annual rental described above, this Lease shall continue beyond the expiration of the initial two (2) year term so long as Lessee or its assigns shall use the leased premises as contemplated herein. Lessee shall pay a late penalty of five percent (5%) of the annual rental for any annual rental payment tendered by Lessee after it is due. In the event Lessor owns less than the entire undivided fee simple surface estate, then the annual rental as provided herein shall be proportionately reduced to the extent that Lessor's interest in the entire undivided fee simple surface estate bears to the entire undivided fee simple surface estate; 4. Lessee agrees damages leased premises. to indemnify and hold Lessor harmless for any and all dtoATh °, caused by Lessee's operations on the Lccoor agrcco to indcmnify and hold Lcoocc harmlcao for ATifay— aS SXR 5. In the event Lessee ceases to occupy said premises and removes its property therefrom, this Surface Lease Agreement shall terminate and all rights hereunder shall revert to Lessor. In such event, Lessee shall be under no further obligation to tender rental payments hereunder. Lessee shall, within thirty (30) days of termination of this lease, file of record a release of this Surface Lease Agreement and shall provide Lessor a recorded copy thereof; 6. Upon the termination of this Lease, Lessee shall remove all structures, pipes, tanks, and other equipment, materials and supplies placed upon the leased premises and shall restore the surface to a condition, as nearly as possible, as existed prior to the execution of this Surface Lease Agreement, at Lessee's sole cost and within three (3) months of the date of termination of this lease. Lessee shall maintain during the term of this lease a bond for the benefit of Lessor and in the amount of Twenty- ee Thot1S 9 bars as security for surface restoration and ash:,, . reclamation x d � a-onstructang any ? 7. Lessee shall adequately fence the site in a manner to protect Lessor's livestock a -� •`117, 7e."-4SaoMrgt-iona, and shall install a gate or cattle guard at the entrance to the leased premises; 8. Lessee shall have the exclusive use of the leased premises and Lessor agrees not to interfere with Lessee's operations on the leased premises; 9. This Agreement is governed by the laws of the State of Colorado and the prevailing party in any litigation shall be entitled to recover its reasonable attorney's fees; 10. For the same consideration as provided above, Lessor hereby grants to Lessee for the term of this Agreement, the right to use existing roads for ingress and egress to the leased premises and the right to construct, build, maintain and use Meblnrag, road and roadway over and across Lessor's adjacent property located in the SWNE of Section 26, Township 6 South, Range 93 West at aFdYF.,.�'u°� M„d leased premises. , to access the 11. This Surface Lease Agreement and all of the terms, conditions, covenants and other provisions shall extend to and be binding upon the parties hereto and their heirs, devisees, successors and assigns. 2510-LK-H:IW P\D0CS\AGREMENT.951BENZEL.LES Page 2 of 3 LN WITNESS WHEREOF, Lessor and Lessee have executed this Agreement the day and year first above written. LESSOR: BENZEL LIVESTOCK COMPANY By: LESSEE: SNYDER OIL CORPORATION STATE OF ) so COUNTY OF John Benzel General Partner By: Steven G. Van Hook Attorney -in -Fact On the day of , 1995, personally appeared before me John Benzel, who being by me duly sworn, did say that he is the General Partner of BENZEL LIVESTOCK COMPANY, a partnership, and that said instrument was signed in behalf of said partnership by authority of the partnership agreement. WITNESS my hand and official seal. Notary Public My Commission Expires: Residing at: STATE OF COLORADO CITY AND ) ss COUNTY OF DENVER The foregoing instrument was acknowledged before me this day of , 1995, by Steven G. Van Hook, Attorney -in -Fact of SNYDER OIL CORPORATION, a Delaware corporation. WITNESS my hand and official seal. My Commission Expires: 2510-LK-H:1W P1DO C S W G REM ENT.951B E NZE L. LE S Notary Public Address: 1625 Broadway, Suite 2200 Denver, Colorado 80202 Page 3 of 3 Attached to and made a part of that certain Surface Lease Agreement dated August 1, 1995, by and between BENZEL LIVESTOCK COMPANY, a partnership, and SNYDER OIL CORPORATION, a corporation. EXHIBIT "A" LANDS: 2570 -LK -H 1W P\OOCS W GR EMENT.95\B ENZEL. LES SNYDER OIL TEL:9-1-303-592-4617 Nov 03'95 11:52 No.003 P.01 EM p Fax Note 7671 Fax N Dale Fr Ci Pho Fa, i - ANALYTICAL TELITING LAHORATDRY tee W OU 4I n, Subs eic.4. Qtmd J.i. an, CO 11 eae1240 (303) 242-0164, Fix (303) 3454270 Toe 40 5. 7th Suites 1200 Rifle, CO 81650 SAMPLE INFORMATION DAM Egi?E3 'f..'"9'399 Submitted By Terry Dick Date Sampled' Oct. 11, 1995 Sample I .D. n Water. Shaffer 18-3 Date Received. Oct. 11, 1995 Comments' Kept 4C till tested Dater Tested' Oct. 11-13, 1993 TEST RESULTS Parameters Results pH 7.18 Conductivity 10,120 umbos/cm Resistivity 0.9881 ohms/m Specific Brevity 60/60 F 1.0016 Chloride 5,898.17 mg/L Bicarbonate 1,217.0 mg/L 'Sulfate- (1 mg/L Iron <1 mg/L Sodium 323.6 my/L. Marneaium 18.15 mg/L Calcium 134.76 mg/L Potassium 59.40 mg/L_ Total Dissolved Solids Total Suspended Solids Nitrate Hydrocarbon Scan Tectal Volatile Hydrocarbons 10,530.00 mg/L 50.0 mg/L 0.31 mq/L gasoline ranges. light ends 0.642 mq/L Results submitted by Envira—Chwm Analyti.canl, Inc. L ieee K. Thtmpsan Chemist C 33/11/95 1E:25 COI3CC -4 9197094577E-5 • DEPARTMENT' OF NATURAL RESOURCES 011 AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO • • RULES AND REGULATIONS, RULES OF PRACTICE AND PROCEDURE, and OIL AND GAS CONSERVATION ACT (As Amended) NO.280 WS Revised O6/95 03/11/95 1525f COGCC 9197094j57785rO /y �Q�/jNOO.280 P06 eS tIK POINT OF COMPLIANCE means one or more points or locations at which compliance with applicable groundwater standards established under Water Quality Control Commission Basic Standards for Groundwater, Section 3_11.4, must be achieved. POLLUTION means man-made or man -induced contamination or other degradation of the physical, chemical, biological, or radiological integrity of air, water, soil, or biological resource. The words POOL, PERSON, OWNER, PRODUCER, OIL, GAS, WASTE, CORRELATIVE RIGHTS and COMMON SOURCE OF SUPPLY are defined by the Act, and said definitions are hereby adopted in these Pules and Regulations. The word "operator" is used in these rules and regulations and accompanying forms interchangeably with the same meaning as the term "owner" except in Rules 301, 323, 401 and 530 where the word "operator" is used to identify the persons designated by the owner or owners to perform the functions covered by those rules. PRODUCED AND MARKETED. These words, as used in the Act, shall mean, when oil shall have left the lease tank battery or when natural gas shall have passed the metering point and entered into the stream of commerce as its first step toward the ultimatensumer. PRODUCTION PITS shall mean those pits used after drilling operations and initial completion of a well, and include: • SKIMMING/SETTLING PITS used to provide retention time for settling of solids and separation of residual oil. PRODUCED WATER PITS used to temporarily store produced water prior to injection for enhanced recovery or disposal, off-site transport, or surface -water discharge. PERCOLATION PITS used to dispose of produced water by percolation and evaporation through the bottom and/or sides of the pits into surrounding soils. EVAPORATION PITS used to contain produced waters which evaporate into the atmosphere by natural thermal forces. —� RESERVE PITS shall mean those pits used to store drilling fluids for use in drilling operations or to contain E&P waste generated during drilling operations. RESPONDENT shall mean a party against whom a proceeding is instituted, or a PROTESTANT who protests the granting of the relief sought in the application as provided in Rule 509. RESPONSIBLE PARTY shall mean a person who conducts an oil and gas operation in a manner which is in contravention of any then -applicable provision of the act, or of any rule, regulation, or order of the Commission, or of any permit, that threatens to cause, or actually causes, a significant adverse environmental impact to any air, water, soil, or biological resource. RESPONSIBLE PARTY includes any person who disposes of any other waste by mixing it with exploration and production waste so as to threaten to cause, or actually cause, a significant adverse environmental impact to any air, water, soil, or biological resource. SENSITIVE AREA is an area vulnerable to potential significant adverse groundwater impacts, due to factors such as the presence of shallow economically usable groundwater or pathways for communication with deeper economically usable groundwater; proximity to surface water, including lakes. rivers, perennial or intermittent streams, creeks, irrigation canals, and wetlands. The procedure for identifying Sensitive Areas is set forth in the Sensitive Area Identification Decision Tree and Guidance Document. SHUT-IN WELL means any well capable of production or injection that has been closed down temporarily for repairs, cleaning out, building up pressure, lack of market, or any other similar condition. SPECIAL FIELD RULES shall mean those rules promulgated for and which are limited in their application to individual pools or fields within the State of Colorado. 100-3 03/11/95 16:26 COGCC -> 9197094577_5 322A. POLLUTION -5QQ NO. 280 D07 e operator shall take precautions to prevent significant adverse environmental impacts to air, water, soil, or biological resources to the extent necessary to protect public health, safety and welfare, by using cost-effective and technically feasible measures to protect environmental quality and to preverK the unauthorized discharge or disposal of oil, gas, E&P waste, chemical substances, trash, discarded equipment or other oil field waste. b. No 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, or any point of compliance established by the Director pursuant to Rule 322D- The Director may establish one or more points of compliance for any event of pollution, which shall be complied with by all parties determined,to be a responsible party for such pollution. n. No owner, in the conduct of any oil or gas operation, shall perform any act or practice which shall constitute a violation of any comprehensive plan adopted by the Air Quality Control Commission for the prevention, control and abatement of pollution of the air of the state. d. No injection shall be authorized pursuant to Rule 323 or Rule 401 unless the person applying for authorization to conduct the injection activities demonstrates that those activities will not result in the presence in an underground source of drinking water of any physical, chemical, biological or radiological substance or matter which may cause a violation of any primary drinking water regulation in effect as of July 12, 1982 and found at 40 C.P,R. Parr 142, as amended, or may otherwise adversely affect the health of persons. An underground source of drinking water is an aquifer or its portion: (1) A. which supplies any public water system; or B. which contains a sufficient quantity of ground water to supply a public water system; and currently supplies drinking water for human consumption; or contains fewer than ten thousand (10,000) milligrams per liter tot -1 dissolved solids; and (2) which is not an exempted aquifer. -, e. No person shall accept water produced from oil and gas operations, or other oil �/ field waste for disposal in a commercial disposal facility, without first obtaining a Certificate of Designation from the County in which such facility is located, in accord with the regulations pertaining to solid waste disposal sites and facilities as promulgated by the Colorado Department of Health. 322B. EXEMPT AQUIFERS a- An aquifer or a portion thereof may be designated by the Director or the Commission as an exempted aquifer, in connection with the filing of an application pursuant to Rule 323 or Rule 401 if it meets the following criteria: (11 it does not currently serve as a source of drinking water; and (21 it cannot now and will not in the future serve as a source of drinking water because: A, it is mineral, hydrocarbon or geothermal energy producing, or can be demonstrated by a person filing an application pursuant to Rule 323 or Rule 401 to contain minerals or hydrocarbons that considering their quantity and location are expected to be commercially producible; B. it is situated at a depth or location which makes recovery of water for drinking water purposes economically or technologically impractical; C. it is so contaminated that it would be economically or technologically lap impractical to render the water fit for human consumption; or 300-14 16:27 COGCC 4 919709457785 EXPLORATION & PRODUCTION (E&P) WASTE MANAGEMENT NU. 2db WNd 901. INTRODUCTION General. The rules and regulations of this series establish the permitting, construction, operating and closure requirements for all pits, methods of E&P waste management, and procedures for spill response, reporting and remediation. b. COGCC reporting forms. The reporting required by the rules and regulations of this series shall be made on forms provided by the Director. c. COGCC Environmental Guidance Document. The COGCC Environmental Guidance Document ICOGCC/EGD) as described herein shall be adopted and revised by Order of the Commission after a public hearing. d. Pit inventory. No later than December 31, 1995, each operator shall submit a Sundry Notice, Form 4, identifying all production pits, buried or partially buried produced water vessels, blowdown pits, and basic sediment and tank bottom pits existing on June 30, 1995. Such listing shall include facility name, a description of the location, type, capacity and use of pit/vessel, whether netted or fenced, lined or unlined, and where available, water quality data. e. Additional requirements. Notwithstanding the provisions of this 900 Series, whenever the Director has reasonable cause to believe_thet an operator, in the conduct of any oil or gas operation, is performing any act or practice which results in a violation of water quality standards or classifications established -by the Water Quality Control Commission for waters of the state, the Director may invoke additional requirements, including but not limited to, permitting and the establishment of points of compliance. Any action taken pursuant to this Rule 901.e, shall com•I with the .rovisions of the 500 Series Rules. f. Variances. Variances to these Rules may be granted by the Director upon written request and a showing by the applicant that the requested variance will not violate the basic intent of the Rule. 902. PITS - GENERAL RULES a, All pits used for exploration and production of oil and gas shall be constructed and operated so as to rotect the waters of the state from significant adverse environmental impacts from pollution, except as permitted by applicable laws and regulations. b. Topsoil and subsoil removed in the construction of the pit shall be segregated and stockpiled in p manner described in Rule 1003 and used for reclamation of the site. c. All pits shall be constructed and operated to provide for a minimum of two (2) feet of freeboard between the top of the pit wall and the fluid level of the pit d. No unlined pit shall be constructed on fill material. e. Any accumulation of oil in a pit shall be removed within twenty-four (24) hours of discovery. f. Where necessary to prevent access to a pit b wildlife mirato birds dome animals, and members of the general pu• ic, e = or may require appropriate netting and/or fencing. 903. DRILLING PITS a_ Permitting requirement. (1) Specific approval on an Application for Permit to Drill, Deepen, Re- enter or Recomplete and Operate (Form 2) shell be required for any drilling pit which will be used in conjunction with oil-based drilling fluids or salt -based drilling fluids with a chloride concentration exceeding fifteen thousand 115,000) ppm inside a Sensitive Area or fifty thousand (50,000) ppm outside a Sensitive Area, or where the well will encounter a salt section which would increase the chloride concentration of the drilling fluid at total depth to 900-1 r 03/11/95 16:28 COGCC -r 919709457795 NO. 280 IM9 greater than fifteen thousand (15,000) ppm in a Sensitive Area or fifty thousand (50. ppm outside a Sensitive Area. (2) An Application for Permit for Unlined Pit, Form 1 5, for a drilling ph subject to Rule 903.a.(1) shall be submitted for approval by the Director with a filing and service fee of two hundred dollars (9200) and shall include the following: A. Drilling location layout plan; B. Pit size: C, Type of mud or completion program; D. Anticipated time pit will be in use; E. Plan for mud or completion fluid disposal; and F. A topographic map of scale no less than 1:24,000 indicating surface drainage and distance from rivers, streams, springs or any other body of water. (3) The Director may approve the permit application as submitted within thirty (30) days after submittal or, where additional terms, provisions, or requirements are necessary to prevent a significant adverse environmental impact to soil, air, water or any biological resource, shall condition approval of the permit upon the operator's compliance with those additional terms, provisions, or requirements. The operator shall comply with all terms, provisions and requirements of the permit es approved by the Director. b. Recycling of drilling fluids. Drilling pit contents may be recycled to another drilling pit. Salt -based or oil-based drilling fluids shall be transferred in accordance with Rule 903.a.(1). Transfers of oil-based or salt -based drilling fluids shall be indicated on a Sundry Notice, Form 4. c. Salt- or oil-based drilling mud requirements. Steel work tanks will be required on the drilling rig circulating system and reserve pits may need to be properly lined in accordance with Rule 904.6.2. when drilling with ail -based mud or a salt -based mud with a chloride concentration exceeding fifteen thousand (15,000) ppm in a Sensitive Area or fifty thousand (50,000) ppm outside a Sensitive Area, or where the well will encounter a salt section which would increase the chloride concentration of the drilling fluid at total depth to greater than fifteen thousand (15,000) ppm in a Sensitive Area or fifty thousand (60,000) ppm outside a Sensitive Area. 904. PRODUCTION PITS a. Sensitive Area Identification for production pits. (1) For all existing unlined production pits to be kept in service after July 1, 1997, operators shall make a determination using the Sensitive Area Identification Decision Tree and Guidance Document as to whether the pit is located inside or outside a Sensitive Area and submit data evaluated and analysis used in the determination on a Sundry Notice, Form 4, or a permit application, by such date. (2) For all new unlined production pits put into service after July 1, 1905, operators shall make a determination using the Sensitive Area Identification Decision Tree and Guidance Document as to whether the pit is located inside or outside a Sensitive Area and submit data evaluated and analysis used in the determination on a Sundry Notice, Form 4, or a permit application. b. (11 Production pit permit requirements. Production pits inside Sensitive Areas - A. A permit shall be required for new unlined production pits in Sensitive Areas put into service after July 1, 1995. Permits for new unlined 900-2 03/11/95 16:28 COGCC 919709457765 d 1 (2) NO.280 D1© production pits in Sensitive Areas shall not be after July 1, 1995 unless an exception for such a pit is granted by the Director pursuant to Rule 904.e.(1). Points of compliance shall be established by the Director. B. A permit shall be required for existing unlined production pits in Sensitive Areas which are not closed prior to July 1, 1997. If such a pit is not closed by July 1, 1997, a permit for such pit shall be obtained pursuant to Rule 904.e.(2) not later than such date. C. No permit shall be required for existing unlined production pits in Sensitive Areas in which liners are installed on or before July accordance with the lining requirements of Rule 904.d.(2)- A Sundry Notice, Form 4, shall be submitted for all such pits containing the information set forth in Rule 904.d.(1) including the date the lining was installed. D. No permit shall be required for new lined production pits in Sensitive Areas put into service after July 1, 1995 which are lined in accordance with the lining requirements of Rule 904.d.(2). A Sundry Notice, Form 4, shall be submitted for lined pits under Rule 904.d.(1). Production pits outside Sensitive Areas. A. A permit shall be required for new unlined production pits outside Sensitive Areas put into service after July 1, 1995, and points of compliance shall be established by the Director as appropriate• B. The permit requirement may be waived by the Director pursuant to Rule 904.e.(1) for new production pits which receive produced water at n average daily rate of five (5) or less barrels per day calculated on a monthly basis for each month of operation. A Sundry Notice, Form 4, shall be filed and include the name, address, and phone number of the primary contact person operating the production pit for the operator, the facility name, a description of the location, type, capacity and use of pit, and water quality data, if available. C. No permit shall be required for new lined production pits outside Sensitive Areas put into service after July 1, 1995 which are {hied in accordance with the a lining requirements of Rule 904.d,(21. D. No permit shall be required for existing production pits outside Sensitive Areas. c. Treatment of produced water. (1) All produced water shall be treated, prior to placement in the production pit, to ensure that crude oil is separated from the produced water and not placed into the pit. Such treatment may include, but is not limited to, the following: A. The use of a separator or fired vessel, including heater treaters. electrostatic treaters, or other treaters. B. The use of a leak -proof, covered, skimming vessel. C. The use of risers, acting as siphons, between a skimming tank and production pit, and between any successive production pit. Risers shall be installed so that the water elevation at the riser inlet is at least one (1) foot below the elevation of the riser outlet. ED. No new unlined skim pits shall be allowed after July 1, 1995. 900-3 03/11/95 16:29 COGCC -, 919709457785 d. r Lined production pits - technical requirements. (11 A Sundry Notice, Form 4, shall be submitted for all lined production pits put into service after July 1, 1995 and shall include the name, address, and phone number of the primary contact person operating the production pit for the operator, the facility name, a description of the location, type, capacity and use of pit, and water quality data, if available. in addition, documentation of engineering design and installation procedures shall be submitted for approval by the Director. NU. 25b (2) Pit lining requirements. A. All production pits in Sensitive Areas put into service after July 1, 1995 shall be Tined. The Director may waive the lining requirement if the operator can demonstrate using points of compliance that the unlined pit in a Sensitive Area will cause no significant adverse environmental impact and that water quality standards will be met at the points of compliance established by the Director_ B. All materials used in lining pits must be impervious, weather resistant and resistant to deterioration when in contact with hydrocarbons, aqueous acids, alkali, fungi or other substances in the produced water. All pit lining materials must be approved by the Director prior to use. C. All soil liners, shall have a minimum thickness of six (6) inches after compaction and shall cover the entire bottom and interior sides of the pit, and shall have sufficient thickness so that the hydraulic conductivity of the liner shall not exceed 1.0 X 104 cm/sec. Bentonite liners may be less than six (6) inches but shall meet the same hydraulic conductivity standard. Post -construction tests shall be performed and may be conducted either in a laboratory or in the field. All test results shall be filed with the Director. D. Any synthetic or fabricated liner shall have a minimum thickness of twelve (12) mils and shall be resistant to deterioration by ultraviolet light, weathering, chemicals, punctures and tearing, and designed for the life of the well. The foundation for the liner shall be prepared so that no punctures in the liner can occur from soils or other materials beneath the liner. The synthetic or fabricated liner shall Cover the bottom and interior sides of the pit with the edges secured with et least a twelve (12) inch deep anchor trench around the pit perimeter. E. In Sensitive Areas, the Director may require a leak detection system for the pit or other equivalent protective measures, including but not limited to, increased record-keeping requirements, monitoring systems and underlying gravel fill sumps and lateral systems. In making such determination, the Director shall consider the surface and subsurface geology, the use and quality of potentially - affected groundwater, the quality of the produced water, and the hydraulic conductivity of the surrounding soils and the type of liner. e. Unlined production pits - technical requirements. (1) The Director shell allow the use of unlined pits, where, due to the surface or subsurface geology, the use and quality of the potentially -affected groundwater, the quarny of the produced water, the hydraulic conductivity of the surrounding soils, or the cation f tthe pit, the pit will not cause a significant adverse environmental impact to groundwater. (2) The application for en unlined production pit permit when required by Rule 904.b. shall be submitted for approval by the Director with a filing and service fee of two hundred dollars (5200) and shall consist of a completed APPlication for Permit for Unlined Pit, Form 'n 15, and the following additional information. 500-4 03/11/95 16:29 COGCC -> 919709457785 NO.280 1:712 0 A. The name, address, and phone number of the primary contact person operating the production pit for the operator. B. A pit location plat showing the location of the proposed pit and the associated production facility, including but not limited to, wellheads, storage tanks, buildings, metering facilities, other pfts, berms, structures and treatment facilities. C. A topographic map of scale no less than 1:24,000 showing the location of all natural streams, lakes or ponds, all man-made ditches, wells and irrigation systems within one (1) mile of the proposed pit. D. The amount and source of water to be received daily by the proposed production pit, both initially and at full capacity, E. A chemical analysis of the produced water to be disposed in the pit. The chemical analysis shall include tests for total dissolved solids, chlorides, sulfates, benzene, toluene, ethyl -benzene and xylene, and such other tests as deemed necessary by the Director. The operator can satisfy this chemical analysis requirement by submitting existing Chemical analyses of water from well(s) producing from the same zone in a common producing area provided the well(s) are within one (1) mile of the well producing the water which the operator proposes to dispose in the pit. F. Calculations used to design the pit, including but not limited to, surface area, storage capacity, and expected daily evaporative Toss adjusted for daily precipitation. G. All permit applications for unlined pits in Sensitive Areas shall include A. through F. above and the following additional information: i. A detailed description of the surface and subsurface geology of the pit area including, but not limited to, a description of the soils and the lithology from the surface to the top of the nearest source of groundwater. The description shall be based upon soil borings, well borings, excavations or other equivalent methods or sources approved by the Director. If the description is based upon soil borings or well borings, a copy of the boring logs with the driler's name, drilling date, drilling method, sampling intervals and field screening measurements shall be submitted with permit application. i. The depth to the nearest source of groundwater as determined by use of well borings or monitor wells, State Engineer records, piezometers or other equivalent method approved by the Director, and, where available, groundwater quality data. ii. Any other information deemed necessary by the Director to ensure that the unlined pit will not result in a significant adverse environmental impact. (3) The Director may approve the permit as submitted, and, where additional terms, provisions or requirements are necessary to protect the waters of the state, public health, or the environment, shall condition approval of the permit upon the operator's compliance with those terms, provisions, or requirements. The operator shall comply with all terms. provisions and requirements of the permit as approved by the Director. 900-5 03/11/95 16:30 COGCC • 919709457785 APPENDIX PART 11 SENSITIVE AREA IDENTIFICATION GUIDANCE DOCUMENT A. PURPOSE OF THE GUIDANCE DOCUMENT The Sensitive Area Identification Guidance Document specifically applies to the determination of areas in which unlined earthen produced water pits installed for use by oil & gas production operations may be restricted. rs and COGCC staff for tion This S guidance document was developed to supports the imde pto both lemental on of tithe proposed amendments tor the900 of Sensitive Areas (SAS). This document P Series of COGCC Rules which establish the permitting, construction, operating and closure requirements for all pits used in oil and gas operations. This document has been prepared with the assistance of our stakeholders, including the oil & gas industry and the Water duality Control Commission (WQCC). This document may be revised periodically, when additional facts and data indicate a change is needed. Each document revision wilt be presented to the COGCC Commissioners for adoption by order of the Commission after a public hearing - The COGCC anticipates developing additional guidance to provide further detailed information regarding technical aspects of implementation of the elements of this document. Topics to be researched include permit requirements, sampling and analysis, paints of compliance, and best management practices. Guidance documents will be developed by the workshop group with COGCC staff to clarify these items and provide direction for implementation. NU.2t10 lrt.; B. ME HOD .f IDENTIFICATION OF SENSITIVE EAS Identification criteria were chosen to ensure the protection of groundwater in accordance with WQCC standards and classifications, relative to oil and gas production operations. After much discussion, the initial list of criteria was narrowed to the factors which would result in the most accurate identification of SAs using reasonable sources of available information- These on criteria include: - quality of the produced water, - presence of unconfined aquifers or recharge areas, - hydraulic conductivity of soils and geologic material under pit, - presence of a WQCC classified area or wellhead protection area, - proximity to public or domestic water supply wells, - depth and quality of groundwater_ The decision tree method was employed for easy use by operators. The operator may determine whether a location is a SA by answering the questions posed in the following decision tree. The operator will evaluate each existing and new pit for a SA determination only once. Various sources of information available for answering the questions are noted. If vital information or data are incomplete or missing, -then it is the responsibility of the operator to provide the minimum information necessary. The operator may also provide field observations and data to fulfill determination requirements. When a discrepancy or question regarding the sensitivity of an area arises, the COGCC staff should be consulted. The COGCC will make the final determination in any dispute over whether a location is in a Sensitive Area. C THE DECISION TREE The decision tree consists of several technical questions that are structured as shown on the attached graphic tree. Explanations of each step, or box follow. 03/11/55 16:31 COGCC 4 919705457785 COGCC GUIDANCE DOCUMENT - SENSITIVE AREAS !DENTJEICA_TJON OUTSIDE SENSITIVE AREAS -New unlined pit must be permitted under Rule 904 and Points of Compliance shall be established as appropriate. -Existing pits need only file a Sundry Notice. Restrictions and Points of Compliance may be established upon investigation of any complaint raised. - Exemption for pits receiving < 5 bbl produced water/day applies to all existing pits and to those new pits so designated by the Director. SENSITIVE AREA IDENTIFICATION Decision Tree tN0 NO BOX 1' Is discharge water: >1.25 x background ppm TDS >250 ppm Chloride or background >250 ppm Sulfate or background 5 ppb Benzene 1000 ppb Toluene > 680 ppb Ethyl Benzene > 10,000 ppb Xylene YES YES BOX 2: is the location underlain by an unconfined aquifer or recharge zone? YES T BOX 3: is the hydraulic conductivity of the underlying soils and geologic material less than or equal to 10 $ cm/sec? NO BOX 4A: Is the existing pit location within an area classified for domestic use by WQCC, or a local (water supply) wellhead protection area (WHPA) as of 7/1/95? 80X 48: Is the new pit location within an area classified for domestic use by WQCC, or a local (water supply) wellhead protection area (WHPA). at the date of construction? YES NO INO I BOX 5: Is the location within 1/8 miofa domestic water well, or 1/4 mi. of a public water Supply well, using the same aquifer? YES NO UjiLk -r - 5u/ , C,t2)60 BOX 6: From he pit bottom, Is the depth to the avg high groundwater table c 2D', including irrigation influence? YES NO. 280 D14 INSIDE SENSITIVE AREAS -Unlined pits are not authorized, unless the operator demonstrates no significant adverse impact. -Permit must be obtained for all unlined pits, and Points of Compliance shall be established_ YOt)'L'1anab t wind "tspnsr=ti vY-Areal' aha`{ 03/11/95 34-60-101. 34-60-102. 34-60-103. 34-60-104. 16:31 CUGCC • 919709457785 34-60-104.5 34-60-105. 34-60-106- 34-60-107. 34-60-108. 34-60-109. 34-60-110. 34-60-111. 34-60-112. 34-60-113 34-60-114. 34-60-115. i APPENDIX PART V OIL AND GAS CONSERVATION ACT Calbrad° SVA- Title 34, Article 60 (As Amended) Short Title. Legislative Declaration. Definitions. Conservation Commission Report -Publication Director of Commission - Duties. Powers of Commission. Additional Powers of Commission. Waste of Oil and Gas. Rules -Hearings -Process. Commission May Bring Suit. Witness -Suits for Violation. Judicial Review. Plaintiff Post Bond. Trial to be Advanced. Action for Damages. Limitations on Actions. 34-60-116. 34-60-117. 34-60-118. 34-60-118. 34-60-119. 34-60-120. 34-60-121. 34-60-122. 34-60-123. 34-60-124. 34-60-125. 34-60-126. Drilling Units Interest. Prevention of Protection of Rights. Agreements for Development and Unit Operations. 5 Payments of Proceeds. Production -Limitation. Application of Article. Violations and Penalties. Expenses -Fund Created. Interstate Compact to Conserve Oil and Gas Oil and Gas Environmental Response Fund. Repealed. Repealed. NO. 280 815 and Pooling Waste and Correlative Ii 5 ptk 03/11/95 18:32 COGCC - 919709457735 NO. 298 34-60-101. Short title. This article shall be known and may be cited as the "Oil and Gas Conservation Act." 34-60-102. Legislative declaration. (1)It is declared to be'in the . bile interest to foster, encoura .roduction, and utiliza io b t natural' res .woos oiroif-and ".- in - =te of Colorado in a er consistent with protection of public health, safety, and welfare; to protect the public and private interests against the evils of waste in the production and utilization of oil and gas by prohibiting waste; to safeguard, protect, and enforce the coequal and correlative rights of owners and producers in a common source or pool of oil and gas to the end that each such owner and producer in a common pool or source of supply of oil and gas may obtain a just and equitable share of production therefrom. It is not the intent nor the purpose of this article to require or permit the proration or distribution of the production of oil and gas among the fields and pools of Colorado on the basis of market demand. It is the intent and purpose of this article to permit each oil and gas pool in Colorado to produce up to its maximum efficient rate of production, subject to the prohibition of waste, and subject further to the enforcement and protection of the coequal and correlative rights of the owners and producers of a common source of oil and gas, so that each common owner and producer may obtain a just and equitable share of production therefrom. e and om e the develo 918 "mfr (2) It is further declared to be in the public interest to assure that producers and consumers of natural gas are afforded the protection and benefits of those laws and regulations of the United States which affect the price and allocation of natural gas and crude oil, including the federal "Natural Gas Policy Act of 1978", 16 U.S.C. 3301, and particularly that the oil and gas conservation commission, established by section 34-60-104, be empowered to exercise such powers and authorities as may be delegated to it by the laws or regulations of the United States, including said "Natural Gas Policy Act of 1978", and, in the exercise of such powers and authorities, to make such rules and regulations and to execute such agreements and waivers as are reasonably required to implement such power and authority. 34-60-103. Definitions. As used in this article, unless the context otherwise requires: (1) "And" includes the word "or" and the use of the word "or" includes the word "and". The use of the plural includes the singular and the use of the singular includes the plural.... (2) "Commission" means the oil and gas conservation commission. (3) "Common source of supply" is synonymous with "pool" as defined in this section. (4) "Correlative rights" means that each owner and producer in a common pool or source of supply of oil and gas shall have an equal opportunity to obtain and produce his just and equitable share of the oil and gas underlying such pool or source of supply.. )4-5) "Exploration and production waste" means those wastes that are generated during the drilling of and production from oil and gas wells or during primary field operations and that are exempt from regulation as hazardous wastes under Subtitle C of the Federal "Resource Conservation and Recovery Act of 1976", 42 U.S.C. Sec. 6901 to 6934, as amended. (5) "Gas" means all natural gases and all hydrocarbons not defined in this section as oil. 16) "Oil" means crude petroleum oil and any other hydrocarbons, regardless of gravities. which are produced at the well in liquid form by ordinary production methods, and which are not the result of condensation of gas before or after it leaves the reservoir. ACT - 1 • 03/11/95 16:32 COGCC y 919709457795 N0.280 1:17 fomTo1A-- la (1) of this section, shall file a return with the commission showing the'volume of oil, gas, or condensate produced or purchased during the preceding calendar quarter, and the actual sales value of such oil, gas, or condensate, including the total consideration due or received at the point of delivery. Such return shall be accompanied by the total amount of the charges due on all interests in the oil or gas except those interests exempted under the provisions of subsection (4) of this section. (b) Each producer shall advise the commission whether he or the purchaser will be responsible for reporting and remitting the levy under the provisions of paragraph (a) of this subsection (2). If the return is filed by the producer, the producer shall maintain at his place of business for three years the invoice or statement issued by each purchaser showing the amount of oil or gas purchased, the producing lease from which such purchase was made, and the total sales price paid. Such purchaser invoice or statement may be requested periodically by the commission with the quarterly report. (31 Any producer or purchaser who files a return pursuant to subsection (2) of this section shall pay any such charge or any interest other than his own, and such producer or purchaser is authorized to deduct the amount of such payment from any amount owed by him to the person for whom such charge was paid. Any such charge not paid when required by subsection (2) of this section shall bear interest at the rate of three percent per month from the date of delinquency until paid. (4) The charge imposed by subsection (1) of this section shall not apply to the interest in any oil or gas or the proceeds therefrom of the following: (a) The United States; (b) The state of Colorado or any of its political subdivisions; (c) Any Indian or Indian tribe on production from land subject to the supervision of the United States. (5) It is the duty of the oil and gas conservation commission to collect all charges and penalties under this article and to remit them to the state treasurer for deposit in the special fund known as the oil and gas conservation fund. Moneys credited to said fund shall be expended for the purposes of administering the provisions of this article and for paying expenses in connection with the interstate oil compact commission. At the end of each fiscal year, beginning with the fiscal year ending June 30, 1988. all moneys in the fund, up to an amount equal to ten percent of the appropriation for the next following fiscal year, shall remain in the fund. Beginning with the fiscal year which ends in June 30, 1991, any additional moneys shall revert to the oil and gas environmental response fund created by section 34-60-1 24. The general assembly shall annually make appropriations for said purposes, and warrants shall be drawn against said appropriations as provided by law. 34-60-123. Interstate compact to conserve oil and gas. The governor may execute agreements with other member states for expiration date extensions or other modifications of the terms of the interstate compact to conserve oil and gas. The governor may further take all steps necessary to effect withdrawal of this state from the compact upon his determination that withdrawal is in the best interests of the state of Colorado. 34-60-124. Oil and gas environmental response fund. (1) There is hereby created in the state treasury the oil and gas environmental response fund, to which shall be credited the following moneys: (a) The revenues from the surcharge imposed by the commission pursuant to section 34-60- 122 (1) (b); ► V ``--' I ACT - 19 it *81,8 61L- PV't b6S =f sD LLS4 u s• 03/11/95 • 16:33 CDGCC -, 919709457705 NU. cu0 Illi (b) Moneys reimbursed to or recovered by the commission in payment for fund expenditures; (c) Any moneys appropriated to such fund by the general assembly; (d) Any moneys granted to the commission from any federal agency for the purposes outlined under subsection (4) of this section. le) Prepayments by operators, in situations where a responsible party cannot be identified, as a credit against the surcharge imposed by section 34-60.122 (1) Ib), whether in cash or through the provision of services or equipment, in order that the commission may conduct the activities provided for in subsection (4) of this section: (f) Moneys recovered from the sale of salvaged equipment, as provided for in paragraph (c) of subsection (6) of this section - (2) The moneys in the oil and gas environmental response fund shall not revert to the general fund at the end of any fiscal year. (3) The moneys in the oil and gas environmental response fund shall be subject to annual appropriation by the general assembly. (4) The fund may be expended by the commission, or by the director at the commission's direction, prior to, during, or after the conduct of oil and gas operations to investigate, prevent, monitor, or mitigate conditions thatthreaten to cause, or that actually cause, a significant adverse environmental impact on any air, water, soil, or biological resource. The fund may be expended to gather background or baseline data on any air, water, soil, or biological resource which the commission determines may be so impacted by the conduct of oil and gas operations. The fund may be expended to investigate alleged violations of any provision of this article, or of any rule, regulation, or order of the commission, or of any permit where the alleged violation threatens to cause or actually causes a significant adverse environmental impact. (5) The director of the oil and gas conservation commission shall prepare an annual report for the executive director of the department of natural resources, the general assembly, and the governor regarding the operations of and disbursements from the fund. (6) For the purposes provided for in subsection (4) of this section, the commission is authorized to: (a) Enter onto any lands or waters, public or private; and, except in emergency situations. the commission shall provide reasonable notice prior to such entry in order to allow a surface owner, local government designee, operator, or responsible party to be present and to obtain duplicate samples and copies of analytical reports; (b) Require responsible parties to conduct investigation or monitoring activities and to provide the commission with the results; (c) Confiscate and sell for salvage any equipment abandoned by a responsible party at a location where the conduct of oil and gas operations has resulted in a significant adverse environmental impact; except that this authority shall be subject to and secondary to any valid liens, security interests, or other legal interest in such equipment asserted by any taxing authority or by any creditor of the responsible party; (7) If the commission determines that mitigation of a significant adverse environmental impact on any air. water, soil, or biological resource is necessary as a result of the conduct of oil and gas operations, the commission shall issue an order requiring the responsible party to perform such mitigation. ACT - 20 83/11/95 1G:34 COGCC -> 91978945775 D19 If the responsible party cannot be identified or refuses to comply with such order, the commission shall authorize the necessary expenditure from the fund. The commission shall bring suit in the second judicial district to recover such expenditures from any responsible party who refuses to p r witm a such mitigation or any responsible party who is subsequently identified, such action to be brought -year period from the date that final expenditures were authorized. Moneys recovered as a result of such suit shall first be applied to the commission's legal costs and attorney fees and shall be credited to the fund_ (g) (a) For purposes of this section, "Responsible party" means any person who conducts an oil and gas operation in a manner which is in contravention of any then -applicable provision of this article, or of any rule, regulation, or order of the commission, or of any permit that threatens to cause, oresource. actually causes, a significant adverse environmental impact to any air, water, mixing or biological exploration and "Responsible party" includes any person who disposes of any other waste by production waste that threatens to cause,' or actually causes, a significant adverse environmental impact to any air, water, soil, or biological resource. (b) Except as otherwise provided in paragraph (a) of this subsection (8), "responsible party" does not include any landowner, whether of the surface estate, mineral estate, or both, who does not engage in, or assume responsibility for, the conduct of oil and gas operations. (9) For purposes of this section, any person who is found to be a responsible party shall be deemed to have consented to the jurisdiction of the commission and the courts of the state of Colorado. Each responsible party shall be liable only for a proportionate share of any costs imposed under this section and shall not be held jointly and severally liable for such costs. 34-60-125. Repealed effective June 2, 1994. 34-80-126. Repealed effective June 2, 1994. ACT - 21 EVAPORATION PIT PROCESS NARRATIVE Gas, condensate and water are produced in a combined stream in the wellbore. From the wellbore, this combined stream is piped over to a three(3) phase production separator. At the separator, the water, the condensate and oil are separated. The water is piped over to a storage tank. This tank is at atmospheric pressure. Any condensate that is still present in the water is separated in the storage tank by gravity separation. These tanks typically hold 300 barrels of water. If a well is making five (5) BOWPD, the tank has sixty (60) days of storage capacity. The pumper, at his discretion and in coordination with the water hauling company, calls for a water truck to come and haul the water to the evaporation facility. The tanks on these trucks are at atmospheric pressure and hold between eighty (80) and one hundred and twenty (120) barrels of water. Once the water truck arrives at the evaporation facility, the water is loaded via the load line to the left (north) tank. The water enters the tank near the bottom of the tank. The remaining condensate, if any, separates to the top. The water flows into the "U-tube" piping arrangement through the perforated pipe at the bottom of the tank. The water exits the first tank via this "U- tube" piping and enters the second tank. The process that takes place in the second tank is identical to the process in the first tank. The water is then discharged from the second tank into the evaporation pit. Evaporation of the water in the pit occurs through the normal evaporation at the rates which are published by the NOAH. This rate is enhanced through the aeration system. This system sucks water from the pit into a pump which feeds the twenty four (24) sprinkler heads positioned around the pit. The sprinkler heads mist the water over the pit enhancing the evaporation process. SAFEC SAFECO INSURANCE COMPANY OF AMERICA GENERAL INSURANCE COMPANY OF AMERICA. FIRST NATIONAL INSURANCE COMPANYOF AMEI:I A HOME OFFICE: SAFECO PLAZA SEATTLE. WASHINGTON 98185 PERFORMANCE BOND KNOW ALL BY THESE PRESENTS, That we, Bond 5736963 Snyder Oil Corporation thereinafter called the Principal), as Principal, and SAFECO INSURANCE COMPANY OF AMERICA, a corporation duly organized under the laws of the State of Washington (hereinafter called the Surety) as Surety, are held and firmly bound unto Benzel Livestock, 980 E. Saddlehorn, Sedona, Arizona 86351 ,(hereinafter called the Obligee), in the num of FIFTY THOUSAND AND N0/100 ($ 50, 000.00 ) Dollars, for the payment of which sum well and truly to be made, we, the said Principal and the said Surety, bind ourselves, our heirs, executors, administrators, successors anal assigns, jointly and severally, firmly by these presents. Sealed with our seals and dated this 23rd day of October , 19 95 WHEREAS, said Principal has entered into a Contract with said Obligee, dated for Surface Restoration in connection with evaporation pit. State of Colorado in accordance with the terms and conditions of said Contract, which is hereby referred to and made a part hereof as if Tiri'ty set forth herein; NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, That if the above bounden Principal shall well and truly keep, do and perform each and every, all and singular, the matters and things in said contract set forth Aad specified to be by said Principal kept, done and performed, at the times and in the manner in said contract specified, or shall pay over, make good and reimburse to the above named Obligee, all loss anddamage which said Obligee may sustain by reason of failure or default on the part of said Principal so to do, then this obligation shall be null and void; otherwise shall remain in full force and effect. NO SUIT, ACTION OR PROCEEDING by the Obligee to recover on this bond shall be sustained unless the same be commenced within two (2) years following date on which Principal ceased work on said Contract. Snyder Oil Corporation Principal 4AFECO„1NSURANCE C(JMPA IKY OF Ar(E&TICAL y in F. Hughes torney-in-Faat 9-757/EP 7/93 ®R991steras treeemari 01 SAFECO C9rOOral ie7. PRINTED KNOW ALL BY THESE PRESENTS: That SAFECO INSURANCE COMPANY OF AMERICA and GENERAL INSURANCE COMPANY OF AMERICA, each a Washington corporation. does each hereby appoint •"*• .................LINDA F. HUGHES. Ft. Worth, Texas POWER OF ATTORNEY SAFECO INSURANCE COMPANY OF AMERICA GENERAL INSURANCE COMPANY OF AMERICA HOME OFFICE SAFECO PLAZA SEATTLE. WASHINGTON 98185 No. 1675 its true and lawful attorneys) -in -fact, with full authority to execute on its behalf fidelity and surety bonds or undertakings and other documents of a similar character issued in the course of its business, and to bind the respective comparry thereby. IN WITNESS WHEREOF, SAFECO INSURANCE COMPANY OF AMERICA and GENERAL INSURANCE COMPANY OF AMERICA have each executed and attested these presents this 9th day of March 19 95 CERTIFICATE Extract from the By -Laws of SAFECO INSURANCE COMPANY OF AMERICA and of GENERAL INSURANCE COMPANY OF AMERICA: "Article V, Section 13. - FIDELITY AND SURETY BONDS ... the President. any Vice President. the Secretary. and any Assistant Vice President appointed for that purpose by the officer in charge of surety operations. shall each have authority to appoint individuals as attorneys -in -(act or under other appropriate titles with authority to execute on behalf of the company fidelity and surety bonds and other docunents of similar character issued by the company in the course of its business ... On any instrument making or evidencing such appointment. the signatures may be affixed by facsimile. On any instrument conferring such authority or on any bond or undertaking of the company, the seal. or a facsimile thereof, may be impressed or affixed or in any other manner reproduced: provided. however. that the seal shall not be necessary to the validity of any such instrument or undertaking." Extract from a Resolution of the Board of Directors of SAFECO INSURANCE COMPANY OF AMERICA and of GENERAL INSURANCE COMPANY OF AMERICA adopted July 28. 1970. "On any certificate executed by the Secretary or an assistant secretary of the Company setting out. (i) The provisions of Article V, Section 13 of the By -Laws. and (ii) A copy of the power-of-attorney appointment. executed pursuant thereto. and (iii) Certifying that said power-of-attorney appointment is in full force and effect. the signature of the certifying officer may be by facsimile. and the seal of the Company may be a facsimile thereof." I. R. A. Pierson. Secretary of SAFECO INSURANCE COMPANY OF AMERICA and Of GENERAL INSURANCE COMPANY OF AMERICA, do hereby certify that the foregoing extracts of the By -Laws and of a Resolution of the Board of Directors of these corporations. and of a Power of Attorney issued pursuant thereto. are true and correct. and that both the By -Laws. the Resolution and the Power Of Attorney are still in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the facsimile seal of said corporation 5-974/EP 1/93 this 23rd day of October 19 95 ® Registered trademark of SAFECO Corporation.