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December 10, 2001 III IIIIIIIIIIIIIIII 999 United States Department of the Interior BUREAU OF LAND MANAGEMENT Kremmling Field Office 2103 E. Park Ave. P.O. Box 68 Kremmling, Colorado 80459 970-724-3437 http:/.4vww.co.b I m.gomkraikrai ndc.e. htm Certified # 7001 11.10 0002 4535 5127 Re[um receipt requested Kert Coal Cempan}• PO Box 773457 Steamboat Springs, CO 80477 Certified # 7001 1140 0002 4535 5134 Retum receipt requested Kerr Coal Company PO Box 487 Walden, CO 80480 Dear Sirs: ~t.,~LIf3.I2E__Pyy..P REFER TO: C--z8d56 SEC 11 20017 Division oiMinerals S GBOigly As you know, Kerr Coal is the lessee for federal coal lease C-22777, and also holds federal coal exploration license C-28056. These both lie in T. 9 N, R. 78 W, Jackson County Colorado. Coal exploration license C-28056 expired in 1981. Part of this original area was incorporated into coal lease C-22777. This lease has been inactive for several years, and is in the last stage of reclaimation. 54 unplugged water wells remain on federal lands in the area of these licences/ leases, with 17 in expired license C-28056. The federal oil and gas lessee in the area manages a producing field (McCallum field) and has announced plans for coal bed methane production in the near future. The Key ~ Coal open water wclls greatly complicate de-watering of the coal seam necessary for coal bed methane production in the area. As much of the reclamation has already been carried out by Kerr Coal (and much of the original Kerr bond released by the State of Colorado), a high priority now exists for reclamation for the remaining water wells on federal lands. Memos were issued to Montgomery Watson (agent for Kerr Coal), and to the State of Colorado on this subject over the last year. Mike Boulay and Jim Stark of the State of Colorado have discussed possible reclamation of these wells with John Morrone of our office. It is of great importance that this issue now be addressed by Kerr Coal. Please address this issue and respond in writing to the BLM with a effective abandonment plan by February 1. This plan should address the proper abandonment and sealing of all these wells, some of which were improperly drilled and completed as monitoring wells. This plan should also include a timetable so that all wells will be abandoned and reclaimed by May 3l, '002.