TO ALL INTERESTED PARTIES AND TO WHOM IT MAY CONCERN:

On July 12, 2004, Rosewood Resources, Inc. together with a consortium of other major operators in Yuma and Phillips Counties, filed with the Commission an application requesting the Commission add a new rule to the Commission’s Rules and Regulations:

a. This Special Well Location Rule ("WLR") governs wells drilled to and completed in the Niobrara Formation insofar as it underlies lands described as follows:

Range 44 West: Sections 7, 18, 19, 30 through 33

Range 45 West: Sections 7 through 36

Range 46 West: Sections 4 through 9

Ranges 47 and 48 West: All

Ranges 46 through 48 West: All

Range 45 West: Sections 1 through 18

Ranges 46 through 48 West: All

Ranges 45 through 48 West: All

Ranges 45 through 48 West: All

Ranges 45 through 48 West: All

Range 44 West: Sections 3 through 10, 16 through 21, 27 through 34

Range 45 West: Sections 3 through 5

Range 46 West: Sections 4 through 9, 16 through 36

Ranges 47 and 48 West: All

Range 44 West: Sections 3 through 6

Range 45 West: Section 7: W½, Section 18: W½, Section 19: All

Range 46 West: Sections 1 through 24

Ranges 47 and 48 West: All

Range 48 West: All

Range 48 West: All

(the "WLR Area")

Within the WLR Area, operators may conduct drilling operations to the Niobrara Formation as follows:

i. Four (4) Niobrara Formation wells may be drilled in any quarter section.

ii. No more than one (1) well may be located in any quarter quarter section.

iii. No minimum distance shall be required between wells producing from the Niobrara Formation in any quarter section.

iv. Wells shall be located at least 560’ from the outer boundary of said quarter section, and wells located outside any drilling units already established by the Commission in the WLR Area prior to this WLR’s effective date shall, in addition, be located at least 200’ from any lease line.

b. Any well drilled to the Niobrara Formation in the WLR Area prior to the effective date of this WLR which is legally located when this WLR becomes effective but is not located as listed above shall be treated as properly located for purposes of this WLR.

c. This WLR does not alter the size or configuration of any drilling units already established by the Commission in the WLR Area prior to this WLR’s effective date.

d. This WLR shall not serve to bar the granting of relief to Owners who file an application alleging abuse of their correlative rights to the extent that such Owners can demonstrate that their opportunity to produce from the Niobrara Formation at locations herein authorized does not provide an equal opportunity to obtain their just and equitable share of oil and gas from such formation.

e. Well exception locations to this WLR shall be subject to the provisions of Rule 318.c.

f. This WLR is a well location rule and supercedes existing Commission orders in effect at the time of its adoption only to the extent that the existing orders relate to permissible well locations and the number of wells that may be drilled in a quarter section. Commission orders in effect when this Rule 318B. is adopted nonetheless apply with respect to the size of drilling units already established by the Commission in the WLR Area. This WLR is not intended to establish well spacing. Accordingly, when an area subject to Rule 318B. is otherwise unspaced, it does not act to space the area but instead provides the permissible locations for any new Niobrara Formation wells. Similarly, Rule 318B. does not affect production allocation for existing or future wells. An operator may allocate production in accordance with the applicable lease, contract terms or established drilling and spacing units recognizing the Owner’s right to apply to the COGCC to resolve any outstanding correlative rights issues.

Minor modifications to other Commission rules may be necessary to conform with the amendments to the rules proposed above.

NOTICE IS HEREBY GIVEN, that the Oil and Gas Conservation Commission of the State of Colorado, pursuant to the above, has scheduled the above-entitled matter for hearing on:

Time: 9:00 a.m.

Place: Suite 801, The Chancery Building

1120 Lincoln Street

Denver, CO 80203

In accordance with the Americans with Disabilities Act, if any party requires special accommodations as a result of a disability for this hearing, please contact Mary Werth at (303) 894-2100 ext. 113, prior to the hearing and arrangements will be made.

Copies of the current Rules and Regulations are available on the Commission Internet homepage or at the office of the Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado 80203, for $10.50 or by mail upon the receipt of a check or money order for $13.50, at the same address.

Written comments on the proposed rule amendments to be considered are requested to be submitted by September 3, 2004 for more complete consideration by the Commission. Opportunity for testimony from any interested party will be provided at the hearing, however the time in which to present testimony may be limited and parties sharing similar viewpoints are requested to appoint a spokesperson to present their testimony at the hearing.

Pursuant to said hearing, in the above-entitled matter at the time and place aforesaid, or at any adjourned meeting, the Commission will enter its order adopting such rules and regulations as in its judgment the facts may justify.

In accordance with Rule 509., any interested party desiring to protest any of the proposed rule amendments, or to intervene, should file with the Commission a written protest or a notice to intervene no later than September 3, 2004 briefly stating the basis of the protest or intervention. Such interested party shall, at the same time, file an original and nine (9) copies of the protest/intervention with the Commission (Rule 503.f.).

IN THE NAME OF THE STATE OF COLORADO

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

By____________________________________

Patricia C. Beaver, Secretary

Dated at Suite 801 Submit comments to:

1120 Lincoln Street Colorado Oil and Gas Conservation Commission

Denver, Colorado 80203 Attn: P.C. Beaver, Docket No. 0409-RM-02

August 23, 2004 1120 Lincoln Street, Suite 801