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Citation Oil and Gas pays penalty for spill to North Fork Powder River (Wyo.)

Release Date: 01/08/2009
Contact Information: Sheldon Muller, 303 312-6916; Jane Nakad, 303 312-6202; Rich Mylott, 303 312-6654

Company to pay $860,000 in penalties, spill prevention measures

(Denver, Colo. -- January 8, 2009) Citation Oil and Gas Corp. will invest approximately $580,000 on new and upgraded spill prevention controls at its Cellers Ranch production field in Johnson County, Wyo., and pay a $280,000 penalty to resolve the government’s claims for violations of the Clean Water Act. The U.S. Environmental Protection Agency and U.S. Department of Justice announced the agreement on January 7 under a consent decree lodged in the United States District Court for the District of Wyoming.

The agreement resolves a discharge of more than 25,000 gallons (597 barrels) of crude oil and produced water at Citation's Cellers Ranch Unit and inadequacies in the company's Spill Prevention Control and Countermeasure (SPCC) plan, an oil pollution prevention requirement under the Clean Water Act. On June 19, 2004, a flow line ruptured at Cellers Ranch, resulting in a spill that contaminated six miles of the North Fork Powder River and adversely impacted waterfowl and other wildlife. The spill was caused by corroded bolts on a buried coupling.

"EPA is taking this action to ensure compliance with laws that prevent oil spills and protect our waters and ecosystems," said Sharon Kercher, EPA's Deputy Enforcement Director in Denver. "EPA appreciates Citation's commitment to adopt rigorous inspection and maintenance practices that will minimize the likelihood and severity of any future spills. We expect other producers to assess the adequacy of their own spill prevention plans.”

Under the agreement, Citation will amend its SPCC plan to bring it into compliance with regulatory requirements. The company will also complete a facility line survey to locate buried piping; create a written facility inventory and diagram for above and below ground equipment; develop and implement an inspection, maintenance and replacement plan; and conduct risk management analysis, integrity testing and training.

The spill at the Cellers Ranch field discharged 25,074 gallons of oil into nearby soils and waters, impacting wildlife, habitat and vegetation. The spill partially coated the banks of the North Fork Powder River and soaked at least eighteen Canada Geese, one Mallard duck and several beaver.

Oil spills are known to cause both short and long-term impacts to human health and ecosystems. Oil in a water body can suffocate aquatic organisms, adhere to the gills of fish, and coat and destroy algae or other plankton. Oil slicks can kill birds, contaminate food sources, reduce breeding in animals and plants, and contaminate nesting habitats. Petroleum oils can also form tars that persist for years.

Citation Oil and Gas Company is a Houston-based company incorporated in 1981. The company has owned and/or operated the Cellers Ranch facility since 1995.

The consent decree, lodged in the U.S. District Court, is subject to a 30-day public comment period and approval by the federal court.
A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.

More information on the Clean Water Act and the SPCC program can be found at: http://www.epa.gov/emergencies/content/spcc/index.htm