REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 21, 1987 at 9:00 A.M., in Room 110, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Cities Service Oil and Gas Corp. for an order granting an exception to the permitted well location as provided for by Order No. 406-1.

FINDINGS

The Commission finds as follows:

1. Cities Service Oil and Gas Corp., 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 October 17, 1983, the Commission authorized Order No. 406-1 to be issued by which 40 acre drilling and spacing units were established for the production of oil and associated hydrocarbons from the Lansing formation underlying certain lands in Baca County, Colorado. The units consist of a quarter-quarter section according to the governmental survey, with the permitted well located in the center of the quarter quarter section with a tolerance of 200 feet in any direction.

5. Based on the facts stated in the verified application and exhibits submitted, and having received no objections and having been heard by the Director as Hearing Officer on December 14, 1987, the Commission should enter an order granting an exception to the permitted well location as provided for by Order No. 406-1 and allow a well to be drilled at a location 1650 feet from the south line and 990 feet from the east line of Section 2, Township 35 South, Range 46 West, 6th P.M., Baca County, Colorado.

ORDER

NOW, THEREFORE, IT IS ORDERED, that an exception to the permitted well location as provided for by Order No. 406-1 is hereby granted for a well to be drilled at a location 1650 feet from the south line and 990 feet from the east line of Section 2, Township 35 South, Range 46 West, 6th P.M. Baca County, Colorado, with a tolerance of 100 feet and that it be the permitted well for the drilling and spacing unit consisting of the NE/4 SE/4 of said Section 2.

IT IS FURTHER ORDERED, that the above order shall be effective forthwith.

ENTERED this 14th day of January 1988, as of December 21, 1987.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary