REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 20, 1994 at 8:30 a.m., in Room 318, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Samedan Oil Corporation, for an order to allow an additional well to be drilled on each 160-acre drilling and spacing unit for the lands described in Order No. 318-3, with the permitted location for any additional well to be located no clos er than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit, for production of gas and associated hydrocarbons from the Niobrara Formation.

FINDINGS

The Commission finds as follows:

1. Samedan Oil Corporation, 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.

4. On January 17, 1997, the Commission issued Order No. 318-1 which established 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Niobrara Formation underlying certain lands in the Republican Field, with the permitted well to be located no closer than 990 feet from the center of the drilling and spacing unit upon which it is located. Subsequent Order No. 318-3 established 160-acre drilling and spacing un its for production of gas from the Niobrara Formation underlying certain lands in the Republican Field, with the permitted well to be located no closer than 900 feet from the boundaries of the unit.

5. Testimony presented at the administrative hearing indicated that one well would not efficiently and economically drain an area of approximately 160-acres, due in part to the amount of faulting in the field, and that in order to prevent the waste of oil and gas, as defined by law, to protect correlative rights of all parties concerned, and to insure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be entered allowing an additional well to be drilled on each 160-acre drilling and spacing unit for the production of gas and associated hydrocarbons from the Niobrara Formation for the below-described lands:

Township 1 North, Range 44 West, 6th P.M. Section 7: All Section 18: All Section 19: All Section 30: All Section 31: All

Township 1 North, Range 45 West, 6th P.M. Sections 7 through 36: All

Township 1 South, Range 45 West, 6th P.M. Sections 3 through 5: All

6. A letter of support was filed with the Commission by Puckett-Warren Oil who owns approximately three thousand two hundred (3200) acres on the north and west sides of the Republican Field.

7. Based upon the facts stated in the verified application, and having been heard by the Hearing Officers who recommend approval, the Commission should enter an order allowing an additional well to be drilled on each 160-acre drilling and spacing unit for the production of gas and associated hydrocarbons from the Niobrara Formation underlying the herein-described additional lands in Yuma County, Colorado.

ORDER

NOW, THEREFORE, IT IS ORDERED, that an additional well is hereby allowed to be drilled on each 160-acre drilling and spacing unit for the production of gas and associated hydrocarbons from the Niobrara Formation underlying the below-described lands in the Republican Field in Yuma County, Colorado, for production from the Niobrara Formation.

Township 1 North, Range 44 West, 6th P.M. Section 7: All Section 18: All Section 19: All Section 30: All Section 31: All

Township 1 North, Range 45 West, 6th P.M. Sections 7 through 36: All

Township 1 South, Range 45 West, 6th P.M. Sections 3 through 5: All

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 right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

ENTERED this day of , 1994, as of June 20, 1994.

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 July 10, 1994 ??

(318#5)