BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION

AND ESTABLISHMENT OF FIELD RULES

TO GOVERN OPERATIONS IN THE

REPUBLICAN FIELD, YUMA COUNTY,

COLORADO

)

CAUSE NO. 318

DOCKET NO. ___________

VERIFIED APPLICATION

COMES NOW, the Applicant, Petroleum Development Corporation, by and through its attorneys, Gorsuch Kirgis LLP, and respectfully petitions the Oil and Gas Conservation Commission of the State of Colorado as follows:

Applicant is the operator and/or working interest owner of one or more oil and gas leases covering all or a portion of the Application Lands (as described below) within the Republican Field.

II.

By Order Nos. 318-3 and 318-4 dated August 22, 1978 and September 9, 1981 respectively, the Commission established 160‑acre drilling and spacing units for the production of gas from the Niobrara Formation underlying certain lands including the following described lands located in the Republican Field, Yuma County, Colorado:

Township 1 North, Range 45 West, 6th PM

Section 25: All

Section 26: All

Section 27: All

Section 28: All

(hereinafter "Application Lands")

The Orders provide that each said drilling unit shall consist of 160 acres, that each such drilling unit shall consist of a quarter section, according to the governmental survey thereof, and that the permitted well in each unit shall be located no closer than 900 feet from the boundaries of the quarter section in which the well is located.

III.

By Order Nos. 318-5 and 318-6 dated July 10, 1994 and September 25, 1994 respectively, the Commission ordered that an additional well would be allowed to be drilled on each 160-acre drilling and spacing unit on lands in the Republican Field (including the Application Lands), at the option of the operator for production of gas from the Niobrara Formation, with the subsequent permitted well to be no closer than 560 feet from the outer boundaries of the drilling and spacing unit and further allowing the Director to grant exceptions to the permitted well locations wihout prior notice or hearing upon an adequate showing by the operator that topography make it unreasonable to drill a second well within the 560 feet setback, but no closer than 380 feet from the boundary of the drilling and spacing unit and requests for any other exception location may be granted in accordance with Rule 318.

Subsequent drilling and production operations in the area of the Application Lands have yielded geological and engineering evidence indicating that two wells will not adequately drain an area of 160 acres, and that an option to drill up to a total of three (3) wells within each drilling unit of the Application Lands should be permitted in order to allow economic and efficient drainage of the gas and associated hydrocarbons from the Niobrara Formation underlying each such 160‑acre drilling and spacing unit of the Application Lands.

In order to allow maximum flexibility in the drilling of wells upon the Application Lands and consistent with protection of correlative rights, it is appropriate that each additional well drilled upon the Application Lands be allowed to be located anywhere within the drilling unit upon which it is drilled provided it is located no closer than 560 feet to the outer boundaries of the drilling unit. In addition, the Director should be allowed to grant an exception to the permitted well location without prior notice or hearing upon an adequate showing by the operator that topography makes it unreasonable to drill the second well within a 560-feet setback, but no closer than 380 feet from the boundary of the drilling and spacing unit, and requests for any other exception location may be granted in accordance with Rule 318.

Therefore, to prevent waste, to protect correlative rights, to ensure proper and efficient development of the Republican Field, and to assure the greatest ultimate recovery of gas and associated hydrocarbons from the Niobrara Formation, Applicant requests that after notice and hearing, as provided by law, the Commission issue its Order providing that a total of three (3) wells shall be allowed to be drilled on each drilling unit of the Application Lands at the option of the operator; that the permitted location be anywhere within the 160‑acre drilling and spacing unit provided it is no closer than 560 feet from the outer boundaries of said 160‑acre drilling and spacing unit; and that the Director be allowed to grant an exception to the permitted well location without prior notice or hearing upon an adequate showing by the operator that topography makes it unreasonable to drill the second well within a 560-feet setback, but no closer than 380 feet from the boundary of the drilling and spacing unit, and requests for any other exception location may be granted in accordance with Rule 318.

VII

Applicant states to the best of its information and belief that the "interested parties" and the owners as defined in the Oil and Gas Conservation Act of the State of Colorado and the Rules and Regulations of this Commission are listed on Exhibit A attached hereto by name and address.

WHEREFORE, Applicant respectfully requests that this matter be set for hearing by the Commission; that notice thereof be given as required by law; and that upon such hearing this Commission issue its Order granting this Application as requested herein. Applicant further requests that the Commission in its Order grant such other provisions as the Commission may find to be necessary or desirable in the cause.

DATED this 22nd day of December, 2003.

Respectfully submitted,

GORSUCH KIRGIS LLP

By:

William A. Keefe

Tower I, Suite 1000

1515 Arapahoe Street

Denver, Colorado 802020

303/376-5000

Applicant's Address:

Petroleum Development Corporation

Attn: Eric R. Stearns, Executive Vice President

2970 29th Street

Greeley, CO 80631

VERIFICATION

STATE OF COLORADO )

) ss.

County of Weld )

Eric R. Stearns, as Executive Vice President of Petroleum Development Corporation, upon oath, deposes and says that he has read the foregoing Verified Application before the Oil and Gas Conservation Commission of the State of Colorado, and states that the matters contained therein are true to the best of his knowledge and belief.

Eric R. Stearns

Subscribed to and sworn to before me this _____ day of December, 2003, by Eric R. Stearns as Executive Vice President of Petroleum Development Corporation.

My commission expires:

Notary Public