THIS ADMINISTRATIVE PENALTY ORDER IS ISSUED TO WALSH PRODUCTION, INC. FOR TWO COUNTS OF FAILURE TO PREPARE AND IMPLEMENT AN SPCC PLAN ACCORDING TO FEDERAL REGULATIONS AND FOR DISCHARGING OIL AND PRODUCED WATER DIRECTLY INTO THE UNNAMED NATURAL WATERCOURSE THAT IS A TRIBUTARY TO LITTLE MUDDY CREEK. THE PROPOSED PENALTY FOR THESE VIOLATIONS IS $24,000.