REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 21 1992, at 8:30 a.m., in Room 101, Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Basin Operating Company, Inc. for an order allowing an additional well to be drilled in three 160-acre drilling and spacing units consisting of the NE1/4, NW1/4 and the SE1/4 of Section 30, Township 2 North, Range 68 We st, 6th P.M., Weld County, for the commingled production of gas and associated hydrocarbons from the Sussex and Shannon Formations underlying the 160-acre drilling and spacing units.

FINDINGS

The Commission finds as follows:

1. Basin Operating Company, Inc. as applicant herein, is an interested party in the subject matter of the above-referenced matter.

2. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

3. The Commission has jurisdiction over the subject matter embraced in said Notice and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

4. On February 16, 1979, the Commission authorized Order No. 250-22 to be issued which, among other things, established 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Shannon Formation underlying certain lands in the Spindle Field in Weld County, Colorado. The units shall consist of a governmental quarter section, with the permitted well to be located in the SE1/4 of each quarter section, with a toler ance of 200 feet in any direction.

5. A well has been drilled and is producing in the NE1/4 NE1/4 of Section 30, Township 2 North, Range 68 West, 6th P.M. Evidence presented at the administrative hearing indicated that two wells will more efficiently and economically drain a 160-acre drilling and spacing unit, resulting in the recovery of additional gas and associated hydrocarbons from the Shannon Formation.

6. That in order to protect correlative rights and prevent waste, a well should be allowed to be drilled in the NE1/4, NW1/4 and the SE1/4 of Section 30, Township 2 North, Range 68 West, 6th P.M., for each of the drilling and spacing units described.

7. Engineering testimony presented indicated that prudent production engineering practices would allow commingled production from the Dakota and "J" Sand Formations resulting in increased recovery of reserves and no irremediable reservoir damage.

8. Based on the facts stated in the verified application and having been heard by the Hearing Officer who recommended approval of the application, and having received no protests, the Commission should approve the request and amend Order No. 250-22 to allow an additional well to be drilled for the above described 160-acre drilling and spacing units for production from the Shannon Formation and allowing the downhole commingling of production from the Sus sex and Shannon Formations, and subject to the approval of the Commission.

O R D E R

NOW, THEREFORE IT IS ORDERED, that an additional well is hereby granted to be drilled in the NE1/4, NW1/4 and SE1/4 of Section 30, Township 2 North, Range 68 West, 6th P.M., for production from the Shannon Formation, and further allowing the downhole commingling of production from the Sussex and Shannon Formations, and subject to the approval of the Commission.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

IT IS FURTHER ORDERED, that the Commission expressly reserves its rights, after notice and hearing to alter, amend or repeal any and/or all of the above orders.

Entered this day of , 1992 as of September 21 1992.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 October 23, 1992 ??