BEFORE THE OIL & GAS CONSERVATION COMMISSION

IN THE MATTER OF THE APPLICATION OF                         )

ROSEWOOD RESOURCES, INC. FOR AN ORDER                 )

ALLOWING A SECOND WELL IN THE DRILLING                 )         CAUSE NOS. 316 and 317

AND SPACING UNITS COVERING THE                                 )

NIOBRARA FORMATION, WHISPER FIELD AND                 )         Docket No. 

AND SHOUT FIELD, YUMA COUNTY, COLORADO             )

COMES NOW, Rosewood Resources, Inc., a Delaware corporation, by its attorneys Clanahan, Tanner, Downing and Knowlton, P.C. and makes application to the Oil and Gas Conservation Commission of the State of Colorado, for an order to permit an optional second well in the drilling and spacing units for the Niobrara formation. In support thereof, Rosewood Resources, Inc. (referred to herein as "Applicant") states and alleges as follows:

1. That the Applicant is the owner of numerous leasehold interests in Yuma County, Colorado, located within the area requested for an optional second well in the spacing unit.

2. That the Applicant is requesting that two (2) wells be permitted in the existing drilling and spacing units of 160 acres for the production of gas from the Niobrara formation covering the following described lands in Yuma County, Colorado, to wit:

 

Whisper Field

Township 3 North, Range 47 West, 6th P.M.

Section 3: All

Section 4: All

Section 5: All

Section 8: All

Section 9: All

Section 10: All

Section 15: All

Section 17: All

Section 20: All

Section 21: All

Section 22: All

Shout Field

Township 2 North, Range 46 West, 6th P.M.

Section 7: All

Township 2 North, Range 47 West, 6th P.M.

Section 3: All

Section 4: All

Section 12: All

Township 3 North, Range 47 West, 6th P.M.

Section 27: All

Section 28: All

Section 35: All

1. That the units of 160 acres with two (2) wells located thereon are expected to efficiently drain the Niobrara formation which is the common source of supply in this area and such spacing is not smaller than the maximum area that can be efficiently and economically drained from said formation by two wells.

2. That the lands covered by this Application have heretofore been spaced for production of gas from the Niobrara formation pursuant to, among other orders, Order No. 317-3 (Whisper Field) and Order No. 316-3 (Shout Field), through which 160-acre drilling and spacing units were established, with the permitted well to be located no closer than 900 feet from the boundaries of the quarter section upon which it is located. In Order Nos. 317-5 and 316-5, the Commission allowed an additional well to be drilled and completed in specified drilling and spacing units described therein within the Whisper and Shout Fields with such wells being located no closer than 560 feet from the outer boundaries of the 160-acre units.

3. Applicant proposes that the additional wells to be drilled and completed for the production of gas and associated hydrocarbons shall be located no closer than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit. In any 160-acre spacing unit covered by this Application which does not currently have any wells located in it, the initial well shall also be located no closer than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit.

4. That the Director may without further notice and hearing approve exceptions to the permitted well locations due to topography or surface hazards.

5. That allowing two (2) wells within the existing spacing units is expected to economically and efficiently drain the Niobrara formation and protect the correlative rights of all parties. The drilling of unnecessary wells will be prevented and waste will therefore be avoided all in accordance with the Colorado statutes and the rules and regulations of this Commission.

6. To Applicant’s best knowledge, the lands within the Application area are used for agricultural purposes. Applicant further states that the requested wells maybe developed consistent with the protection of the public health, safety and welfare. Applicant maintains in accord with Rule 503(c), that compliance with Commission rules is sufficient to protect the environment, public health and welfare without any additional plan proposed by the Applicant.

7. Exhibit A attached hereto and made a part hereof is the list of the names of "Owners" required to be notified in accord with Commission Rule 507(b)(1), in the existing drilling units to be affected by this application. To the best of Applicant's knowledge and belief, Exhibit A contains the names of all such owners.

WHEREFORE, Applicant respectfully requests that this matter be set for hearing, that notice thereof be given as required by law and that upon such hearing this Commission enter its order:

A. Establishing that two (2) wells may be completed in the 160-acre drilling and spacing units for gas from the Niobrara formation underlying the lands set forth in paragraph 2 with the second well being an optional well in the discretion of the operator. The second well shall be located no closer than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit. In any 160-acre spacing unit which does not currently have a well in it, the initial well shall also be located no closer than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit.

B. For such other findings and orders as the Commission may deem proper or advisable in the premises.

DATED this ______ day of September, 2001.

Applicants' Address:

Rosewood Resources, Inc.

2711 N. Haskell Ave.

Suite 2800, LB #22

Dallas, TX 75204-2944

VERIFICATION

STATE OF TEXAS )

) ss.

COUNTY OF ______________)

William E. Washington, of lawful age, being first duly sworn upon oath, deposes and says that he is the Land Manager for Rosewood Resources, Inc. and that he has read the foregoing Application and that the matters therein contained are true to the best of my knowledge, information and belief.

EXHIBIT A

INTERESTED PARTIES

IN THE MATTER OF THE APPLICATION OF                 )

ROSEWOOD RESOURCES, INC. FOR AN ORDER         )

ALLOWING A SECOND WELL IN THE DRILLING         )     CAUSE NOS. 316 and 317

AND SPACING UNITS COVERING THE                         )

NIOBRARA FORMATION, WHISPER FIELD AND         )     Docket No. ______

AND SHOUT FIELD, YUMA COUNTY, COLORADO     )

ROSEWOOD RESOURCES, INC. CAUSE NO. 316 AND 317

COGCC RULES AFFECTING THE ENVIRONMENT,

PUBLIC HEALTH, SAFETY & WELFARE

Incorporated into Application of Rosewood Resources, Inc.

The following constitute Commission rules which specifically apply to Rosewood’s proposed Increased Density Application:

ACCESS ROADS (Rule 1002.f.)

• Existing roads to be used when practicable

• Sharing of roads by operator when feasible

• Routing of roads to complement other land usage

EMERGENCY PREPAREDNESS (Rule 210.a.)

• Directional signs shall be posted during drilling and recompletion operations to advise emergency crews responding in case of an emergency situation

GROUND WATER PROTECTION (Rules 314, 317, 319, 324B, 324D, 325, 326, 333, 900 Series)

• Requirement to set surface casing 50 feet below deepest water well in area and cement to surface

• Requirements for well control, testing, flaring and logging

• Production casing required to be cemented to surface

• Plugging and abandonment requirements

• Aquifer protection requirements for underground injection

• Points of compliance requirements

• Underground injection requirements

• Mechanical integrity testing requirements

• Seismic operations requirements

• Exploration and production (E&P) waste management requirements

• Restriction on production pits

NOISE ABATEMENT (Rule 802)

• Rosewood operations shall comply with state maximum permissible noise levels

POLLUTION PREVENTION (Rules 208, 209, 324A, 900 Series)

• Corrective action requirements if pollution is caused

• Requirements to protect water-bearing formations

• Pollution prevention requirements

• Exploration and production waste management requirements

SAFETY (Rules 602, 603, 604, 605, 606A, 607)

• General safety and sanitary requirements

• Drilling and well servicing requirements in high density areas

• Production facilities requirements to prevent fires and spills/releases of produced fluids

• Seismic operations requirements

• Fire prevention requirements

SETBACKS (Rules 318, 603.a.)

• Wellheads shall be located 150 feet or 1½ times the height of the derrick from any occupied building, public road, major above ground utility line or railroad

• Wells shall be at least 150 feet from a surface property line

SURFACE OWNER NOTICE (Rule 305.b.)

• Operator shall give notice to surface owners no less than 30 days prior to commencing drilling operations with heavy equipment

• Operator shall give notice to surface owners no less than 7 days prior to commencing subsequent well operations

• Operator shall give notice to surface owners no less than 30 days prior to final reclamation operations when performed more than 30 days after a well is completed

SURFACE OWNER CONSULTATION (Rule 306)

• Operator shall consult in good faith with surface owners in locating roads, production facilities and wellsites, and when preparing for reclamation and final abandonment

• Operator shall consult with surface owners prior to commencing drilling operations with heavy equipment

• Applications for permits to drill shall not be approved by the COGCC until confirmation of such consultation has been completed or waived by the surface owner

SURFACE RESTORATION, REHABILITATION AND BONDING (Rules 333, 703, 705 and 1000 Series)

• Reclamation requirements for seismic operations

• Financial assurance requirements for surface owner protection

• Financial assurance requirements for seismic operations

• Site preparation, interim reclamation and final reclamation requirements

VENTING OR FLARING NATURAL GAS (Rule 912)

• Unnecessary or excessive venting or flaring from a well is prohibited

• Flaring may be required if necessary to protect public health, safety and welfare

• Notice of flaring shall be provided to local emergency dispatch or to local governmental designee

VISUAL IMPACT (Rule 804)

• Production facilities observable from any public highway shall be painted with colors similar to surrounding landscapes