(b) Venting or flaring shall only be authorized by the Commission under the following circumstances:

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1 Chapter 3, Section 39. Authorization for Flaring and Venting of Gas. (a) Venting or flaring must be in accordance with Commission requirements to prevent waste as specified in W.S (a)(i)(G), 102(a), (b), and 121. (b) Venting or flaring shall only be authorized by the Commission under the following circumstances: (i) Emergencies or upset conditions: During temporary emergency situations, such as compressor or other equipment failures, relief of abnormal system pressures, or other conditions which result in the unavoidable short-term venting or flaring of gas at a lease, gas plant or other facility, not to exceed forty-eight (48) hours; (ii) Well purging and evaluation tests: During the unloading or cleaning up of a well during routine purging or drill stem, producing, or evaluation tests, not to exceed forty-eight (48) hours; (iii) Production tests: During initial or recompletion evaluation tests not exceeding a period of fifteen (15) seven (7) days or more than a total of 1500 MCF. unless a longer test period is authorized by the Supervisor; (iv) The Commission encourages requires the Owner or Operator to employ technologies that minimize or prevent the venting and flaring of gas during drilling and completion operations. (b c) Low rate casing head gas. Unless it is determined by the Supervisor or the Commission that waste is occurring as defined in Wyoming statutes, up to sixty (60) thirty (30) MCF of gas per day is authorized to be vented or flared from individual oil wells. Venting or flaring is authorized either at the well or at a lease facility which serves several wells. (c d) Unless flaring or venting is authorized under subsection (a b) or (b c) of this section, an Owner/Operator must apply for retroactive or a prospective venting or flaring authorization under subsection (c d) or (d e) of this section. Authorization may only be granted upon review of an application and approval by the Commission, provided that the venting or flaring does not constitute waste as defined in Section (a) above. An application to vent or flare shall contain the following items as a minimum: (90) days; (i) (ii) A statement of reason for venting or flaring; The estimated duration of venting or flaring not to exceed ninety (iii) The estimated daily volume of gas in thousands of standard cubic feet per day (MCFD) not to exceed two hundred fifty (250) MCF per day;

2 (iv) The estimated daily volume and type of associated produced fluids, gas or plant products in barrels, MCFs, gallons or tons per day, as applicable; (v) The estimated value of lost royalty, severance, and ad valorem taxes resulting from the flaring or venting of gas; (vi) A compositional analysis of the gas if hydrogen sulfide is present or if the gas stream has a low BTU content; (vii) A legal description of the well(s), plant or facility and distance to the nearest potential sales point or pipeline(s); and, (viii) A discussion of applicable safety factors and plans such as use of a constant flare igniter, facility pressure release, or emergency protection practices. (ix) Proof of notification sent by the applicant to all mineral and surface owners within one (1) mile of the proposed flaring application. The notification shall inform mineral and surface owners of the proposed flaring application before the Commission and inform them of the date and time it will be heard before the Commission and the requirements to file a protest of the flaring application. (d e) The Supervisor may grant temporary authorization of verbal requests, including plant start-up/shut-down. Follow-up documentation of the request may be requested of the applicant containing, at a minimum, the items set forth in subsection (c d) of this section above within fifteen (15) days of the initial request. (e f) All operations shall be conducted in a safe and workmanlike manner and shall require the following: (i) If the gas stream is sour or venting and would present a safety hazard, a constant flare igniter system or other Commission approved method to safely manage sour gas may will be required; (ii) If flaring operations are within one (1) mile of occupied dwellings noise controls or barriers must be installed; (iii) flares will operate smokeless; flaring. (iv) best available technology will be utilized to limit emissions from (f g) Venting of gas containing a hydrogen sulfide content in excess of 50 PPM is not allowed. Venting does not include emissions associated with fugitive losses from valves, fittings, surface piping, pneumatic devices, and other production equipment, including the wellhead. Supervisor approval is required for venting of gas containing a hydrogen sulfide content in excess of 50 PPM for specific job tasks in controlled environments, such as well

3 repairs, pipeline purging, well failures, decommissioning of facilities, etc., or where necessary as a safety measure where flaring would be dangerous due to the introduction of an ignition source at the work site or when the operation is conducted under the authority and regulations of the Department of Environmental Quality. Chapter 4, Section 4. Workmanlike Operations. (a) The Owner or Operator shall carry on all operations and maintain the property at all times in a safe and workmanlike manner, having due regard for the preservation and conservation of the property and for the health and safety of employees and people residing in close proximity to those operations or those who routinely are in close proximity to those operations. At a minimum, the Owner or Operator must unless otherwise approved by the Supervisor: (i) Take reasonable steps to prevent accumulation and promptly remove any materials that may be deemed to be a fire hazard. Accumulations of oil or hydrocarbon-contaminated soil should be promptly removed from the vicinity of well locations, wellheads/stuffing boxes, lease tanks and inside bermed areas, and/or other production equipment and pits; (ii) Maintain all materials and chemicals in an orderly and safe manner. Material and equipment stored on the lease and or well site shall be limited to serviceable equipment commonly associated with the operation of a lease or well. Refuse should be disposed of properly as provided elsewhere in these rules; (iii) Provide for clear identification of ownership of the property at all times and comply with the requirements in Chapter 3, Section 19 of these rules for the marking of each drilling, producing, or injection well; (iv) Locate all permanent ignition sources, such as heater treaters, no closer than one hundred feet (100') from the wellhead; (v) On state and private surfaces, locate wellheads, pumping units, pits, production tanks and/or associated production equipment no less than three hundred fifty (350) one thousand three hundred twenty (1,320) feet from any residence, school, hospital, or other places as determined by the Supervisor. The Supervisor Commission may impose greater distances for good cause and, likewise, grant exception to the 350-1,320 foot rule after notice to affected parties and opportunity for objection; (vi) Provide noise abatement around active drilling and flaring operations within 1,320 feet from any residence, school, hospital, or other places as determined by the Supervisor.

4 (vii) Provide fencing or other reasonable means to prevent access to all pumps, pits, wellheads, production facilities which is reasonably adequate to secure the site in such a manner as to protect public health and safety concerns, wildlife, and livestock at the well location; (viii) Maintain tanks in a workmanlike manner which will preclude seepage from their confines and provide for all applicable safety measures. Owners or Operators should be aware of their responsibility to comply with Spill Prevention Control and Countermeasures Plan (SPCC, 40 CFR 112) requirements that regulate the prevention and containment of crude oil spills. SPCC regulations and guidelines specify that applicable facilities construct appropriate containment or diversionary structures or equipment to prevent discharged oil from reaching waters of the United States. The use of crude oil tanks without tops is strictly prohibited. If an SPCC Plan is applicable, any oil spilled within the SPCC containment berms at a tank battery shall be promptly removed and any containment devices installed to contain drips and spills during hose hookup shall be emptied and/or cleaned as necessary to prevent access by wildlife, domestic animals, or migratory birds. (viii ix) Where facilities are in close proximity to populated areas or where there is an imminent and present danger to the public health and safety, the Supervisor may request survey plats and/or plan views of all improvements on a lease or facility and require evidence that the facility has been constructed in accordance with good engineering practices and with consideration of safety measures; (ix) Install a valve on all treaters and/or production facilities so that produced water sampling required by the Commission's rules can be performed in a reasonable and easy manner; (xi) Dispose of produced water, tank bottoms, and other miscellaneous solid waste in a manner which is in compliance with the Commission's rules and other state, federal, or local regulations. (b) The Owner/Operator shall install and maintain all electrical equipment located in and around an oil or gas well to comply with the National Electrical Code in effect for the year electrical conductors were installed and energized, and the Department of Fire Prevention and Electrical Safety Act, WYO. STAT. ANN and Operator shall provide the Oil and Gas Conservation Commission at least twenty-four (24) hours notice prior to installation of underground electrical conductors outside of its facilities, fenced enclosures, or posted areas. With routine maintenance, emergency or repair work, the Operator shall provide the Oil and Gas Conservation Commission notice within twenty-four (24) hours of completing the electrical work. Chapter 3, Section 22. General Drilling Rules. (b) Before drilling commences, approval to construct proper and adequate reserve pits for the reception and confinement of mud and cuttings and to facilitate the drilling

5 operation shall be applied for and received in accordance with Chapter 4, Section 1 of these rules. Special precautions including, but not limited to, an impermeable liner and/or membrane, monitoring systems, or closed systems, shall be taken, if necessary, to prevent contamination of streams and potable water and to provide additional protection to human health and safety in instances where drilling operations are conducted in close proximity to water supplies, residences, schools, hospitals, or other structures where people are known to congregate. Pits, wellheads, pumping units, tanks, and treaters shall be located no closer than three hundred fifty feet (350') one thousand three hundred twenty feet (1320 ) from any of the aforementioned items. The Supervisor may impose greater distances for good cause and likewise grant exceptions to the 350-foot rule. Chapter 4, Section 3. Accidents, Spills, and Fires. (a) The Owner or Operator shall take all reasonable precautions to prevent accidents and fires, shall notify the Supervisor within twenty-four (24) hours of all accidents (other than personal injuries and deaths) or fires of major consequence, and shall submit a full report thereon within fifteen (15) days. A violation will be cited and a fine levied by the Commission for any accident that causes unauthorized releases of produced fluids, drilling muds, produced water, hydrocarbons, or chemicals to enter or fall upon adjacent and nearby property off the well pad. (b) Uncontained spills or unauthorized releases of produced fluids, drilling muds, produced water, hydrocarbons, or chemicals which enter, or threaten to enter, waters of the state or adjacent or nearby property must be verbally reported to the Commission no later than the next business day following discovery of the incident. The Owner or Operator shall file a written report within fifteen (15) working days. A violation will be cited and a fine levied for any uncontained spills or unauthorized releases of produced fluids, drilling muds, produced water, hydrocarbons, or chemicals which enter or fall upon adjacent or nearby property. (c) Regardless of the type of surface containing the fluids, contained spills of crude oil, condensate, produced water, or a combination thereof, which occur on a lease, unit, or communitized area, except on state lands, and do not physically enter waters of the state and are immediately contained, removed, and disposed of properly, (i) Contained spills of less than one (1) barrel (42 gallons) are not required to be verbally reported. The Owner or Operator shall maintain a record of such spills, the volume and actions taken to contain, remove and properly dispose and have the records available for review by the Commission upon request. (ii) Contained spills of greater than one (1) barrel (42 gallons) and less than ten (10) barrels (420 gallons) are not required to be verbally reported. The Owner or Operator shall file a written report within fifteen (15) working days of the spill. (iii) Contained spills equal to or greater than ten (10) barrels (420 gallons) shall be verbally reported to the Commission no later than the next business day

6 following discovery of the incident. The Owner or Operator shall file a written report within fifteen (15) working days of the spill. The Commission shall conduct an investigation and issue a violation and levy a fine. (iv) An example of the information normally required by the Commission for reporting spills is included in the Incident Report (Form 21; Appendix E). The Commission accepts copies of reports prepared to satisfy the requirements of the Department of Environmental Quality or the Bureau of Land Management.