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~ ~~®~~~~~E~TIAL <br />overruling Powderhorn's objections to readjustment and read- <br />justing the Lease effective August 1, 1986. On January 9, <br />1987, the Interior Board of Land Appeals ("IBLA") issued an <br />Order affirming the Colorado State Office decision of May 21, <br />1986. On March 10, 1987, Powderhorn filed a Complaint in the <br />United States District Court for the District of Colorado <br />(Powderhorn Properties Company, et al. v. Hodel, Case No. <br />87-K-350) seeking a declaratory order reversing the IBLA <br />decision. Although the Solicitor's Office for the Department <br />of the Interior has opposed the Complaint, all parties, includ- <br />ing the Court, on July 2, 1987 agreed to stay the case pending <br />a final decision in Coastal States Enerqy Company v. Hodel and <br />FMC Wyoming Corp. v. Hodel. <br />For the purposes of this Application, it is assumed the <br />Lease will be readjusted effective August 1, 1986. Neverthe- <br />less and despite such assumption, Powderhorn shall not be <br />deemed to have waived any arguments it has raised or hereafter <br />may raise in Powderhorn Properties Company,_ et al. v. Hodel <br />contesting the application of the Federal Coal Leasing Amend- <br />ments Act of 1976 ("FCLAA") requirements to pre-FCLAA leases, <br />including the Lease. <br />Diligent development was achieved during August 1986. The <br />Lease therefore was subject to continued operation requirements <br />beginning September 1, 1986. Commercial quantities were mined <br />from the Lease during the royalty reporting period September 1, <br />1986 through August 31, 1987. As a result, the Lease now is <br />subject to continued operations requirements, so it must <br />- 3 - <br />