BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

REPORT OF COMMISSION

                        This cause came on for hearing before the Commission on August 8, 2011, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to establish four approximate 40-acre drilling and spacing units for certain lands located in the SW¼ of Section 35, Township 1 South, Range 45 West, 6^th P.M., wherein the Cantrall Trust wells are planned, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

FINDINGS

The Commission finds as follows:

1.     Noble Energy, Inc. (“Noble” or “Applicant”), as applicant herein, is an interested party in the subject matter of the above‑referenced hearing.

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 pursuant to the Oil and Gas Conservation Act.

4.     Rule 318.b. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that wells drilled to less than 2,500 feet in depth shall be located not less than 200 feet from any lease line, and located not less than 300 feet from any other producible oil or gas well, or drilling well, in the same common source of supply, except that only one producible oil or gas well in each such source of supply shall be allowed in each governmental quarter-quarter section unless an exception under Rule 318.c. is obtained.  The SW¼ of Section 35, Township 1 South, Range 45 West, 6^th P.M. is subject to this Rule for the Niobrara Formation.

5.     On June 9, 2011, Noble, by its attorneys, filed with the Commission a verified application (the “Application”) for an order to establish four approximate 40-acre drilling and spacing units for the below-listed lands (the “Application Lands”), wherein the below-described wells are planned, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the wellbore for any permitted well to be located no closer than 200 feet from the boundaries of the unit and no closer than 300 feet from any other producible oil or gas well, or drilling well, without exception being granted by the Director:

Drilling and Spacing Unit #1 – Cantrall Trust #13-35 Well

Township 1 South, Range 45 West, 6^th P.M.

Drilling and Spacing Unit #2 – Cantrall Trust #14-35 Well

Township 1 South, Range 45 West, 6^th P.M.

Drilling and Spacing Unit #3 – Cantrall Trust #23-35 Well

Township 1 South, Range 45 West, 6^th P.M.

Drilling and Spacing Unit #4 – Cantrall Trust #24-35 Well

Township 1 South, Range 45 West, 6^th P.M.

7.     On July 27, 2011, Noble, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits. Sworn written testimony and exhibits were submitted in support of the Application.

8.     Land testimony and exhibits submitted in support of the Application by Tim Henry, Senior Landman for Noble, showed: Noble owns a leasehold interest in the Application Lands, and all of the surface and mineral ownership in the Application Lands is owned in fee.

9.     Geologic testimony and exhibits submitted in support of the Application by Holly Duncan, Petroleum Geologist for Noble, showed that the Niobrara Formation exists under all the lands subject to the Application.  Testimony further showed that the thickness of the target zone in the Application Lands averages 35 feet, with a subtle to almost non-existent dip in the Application Lands. 

10.   Engineering testimony and exhibits submitted in support of the Application by Shelan Golightly, Petroleum Engineer for Noble, showed an estimated ultimate recovery of 305,872 MCF gas with an average drainage area of 39 acres based on an analysis of 21 comparison wells which are producing Niobrara gas wells in sections surrounding the Application Lands.

11.   The Application was reviewed by the Colorado Department of Public Health and Environment (“CDPHE”) pursuant to consultation provisions of Rule 306.d.  In a letter dated July 29, 2011, the CDPHE Oil & Gas Coordinator indicated that CDPHE does not believe any additional conditions of approval are necessary for approving the Application.

12.  The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.

13.   Noble agreed to be bound by oral order of the Commission. 

14.   Based on the facts stated in the verified Application, having received no protests, and based on the Hearing Officer review of the Application under Rule 511., the Commission should enter an order establishing four approximate 40-acre drilling and spacing units for certain lands located in the SW¼ of Section 35, Township 1 South, Range 45 West, 6^th P.M., wherein the Cantrall Trust wells are planned, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

ORDER

NOW, THEREFORE IT IS ORDERED, that four approximate 40-acre drilling and spacing units are hereby established for the below-listed lands, wherein the below-described wells are planned, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the wellbore for any permitted well to be located no closer than 200 feet from the boundaries of the unit and no closer than 300 feet from any other producible oil or gas well, or drilling well, without exception being granted by the Director:

Drilling and Spacing Unit #1 – Cantrall Trust #13-35 Well

Township 1 South, Range 45 West, 6^th P.M.

Drilling and Spacing Unit #2 – Cantrall Trust #14-35 Well

Township 1 South, Range 45 West, 6^th P.M.

Drilling and Spacing Unit #3 – Cantrall Trust #23-35 Well

Township 1 South, Range 45 West, 6^th P.M.

Drilling and Spacing Unit #4 – Cantrall Trust #24-35 Well

Township 1 South, Range 45 West, 6^th P.M.

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

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

IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this Order to be final agency action for purposes of judicial review within 30 days after the date this Order is mailed by the Commission.

IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

                        ENTERED this               12^th   day of August, 2011, as of August 8, 2011.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By____________________________________    

                                                                                    Robert A. Willis, Acting Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

August 12, 2011