REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 21, 1979 at 9:00 A.M., in Room 318-A, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Coseka Resources (U.S.A), Ltd., for an order establishing 320-acre drilling units for the production of gas and associated hydrocarbons from the Dakota formation underlying certain lands in Garfield County, Colorado.

FINDINGS

The Commission finds as follows:

1. Coseka Resources (U.S.A), Ltd., 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. The Dakota formation constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Garfield County, Colorado, to-wit:

Township 5 South, Range 102 West, 6th P.M. Section 12: All

5. In order to prevent waste of oil and gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unnecessary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources, an order should be made establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Dakota formation, a common source of supply underlying the lands defined herein; that said units consist of the E/2 and W/2 of said section and the permitted wells for the units be Well No. 12-6 Federal, located 1680 feet from the north line and 2265 feet from the west line (SE/4NW/4) of said Section 12, and Well No. 8-12 Standiford-Rector, located 748 feet from the east line and 1802 feet from the south line (NE/4NE/4) of said Section 12.

6. All geological and engineering data concerning the Dakota formation indicate that one well will efficiently and economically drain an area of approximately 320-acres, and that the drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently drained by one well producing from said Dakota formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to a well drilled, completed, or recompleted in the Dakota formation underlying that portion of Twin Buttes Field, herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

(over)

Rule 1. Three hundred twenty (320) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the Dakota formation underlying the following described lands in a portion of the Twin Buttes Field, Garfield County, Colorado, to-wit:

Township 5 South, Range 102 West, 6th P.M. Section 12: All Rule 2. The units shall consist of the E/2 and W/2 of said section and the permitted wells shall be the Well No. 12-6 Federal, located 1680 feet from the north line and 2265 feet from the west line (SE/4NW/4) of said Section 12 and Well No. 8-12 Standi-ford-Rector, located 748 feet from the east line and 1802 feet from the south line (NE/4NE/4) of said Section 12.

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.

ORDERED this 21st day of August, 1979.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

9/21/79 (#332-2) DATE Of ENTRY