REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 15, 1986, at 9:00 A.M. in Room 110, State Centennial Building, 1313 Sherman Street, Denver, Colorado 80203, after giving Notice of Hearing as required by law on the Commission's own motion as a result of Order No. 426-9 (corrected) which placed production restrictions on wells in the Mt. Pearl Field producing from the Morrow formation and further that unless a Unit Agreement and Unit Operating Agreement have been entered by the time of the December 15, 1986 hearing date the field would be shut-in on December 31, 1986, pending a resolution of a plan for unit operations.

FINDINGS

The Commission finds as follows:

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

2. 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.

3. Testimony presented at the hearing indicates that progress has been made toward unitization, however due to continued development, especially in the western part of the field, limits of the reservoir have not been fully defined.

4. An additional period of time of 90 days should be given in order for the operators in the field to obtain sufficient data to delineate the boundaries of the unit area and finalize a unit agreement and unit operating agreement.

5. The production restrictions, as provided for in Order No. 426-9 (corrected), should remain in effect for the 90 day period and a hearing should be held on the March 1987 hearing date at which time, unless a Unit Agreement and Unit Operating Agreement have been finalized, the Commission should take such further action as it deems appropriate.

ORDER

NOW, THEREFORE IT IS ORDERED that Order No. 426-9 (corrected) providing for production restrictions on wells producing from the Morrow formation underlying lands in the Mt. Pearl Field, Cheyenne County, Colorado shall remain in effect.

IT IS FURTHER ORDERED that a hearing shall be held on March 16, 1987 and unless a Unit Agreement and Unit Operating Agreement have been entered by that time, the Commission shall take such further action as it deems appropriate.

IT IS FURTHER ORDERED that the above orders shall become effective forthwith.

IT IS FURTHER ORDERED that the Commission expressly reserves its right after notice and hearing to alter, amend or repeat any part of the above order.

ENTERED this day of 1987, as of December 15, 1986. OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

Dated at Denver, Colorado January 14, 1987

(426-10)