IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE CARETAKER FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 469

ORDER NO. 469-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 20, 1990 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Fina Oil and Chemical Company for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "D" Sand formation underlying certain lands in Weld County, Colorado.

FINDINGS

The Commission finds as follows:

1. Fina Oil and Chemical Company, 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. Based on the facts stated in the verified application, no protests being filed, and having been heard by the Director as Hearing Officer on February 16, 1990, the Commission should enter an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "D" Sand formation which is a common source of supply of oil and associated hydrocarbons underlying the herein described lands:

Township 7 North, Range 60 West, 6th P.M.

Section 12: E1/2

Township 7 North, Range 59 West, 6th P.M.

Section 7: 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 80-acre, more or less, drilling and spacing units for the production of oil and associated hydrocarbons from the "D" Sand formation, a common source of supply underlying the lands described herein; that the units should consist of 80-acres more or less, and consist of the E1/2 and W1/2, or the N1/2 and S1/2 of a governmental quarter section, with the unit described by the operator of the first well drilled in the quarter section. The permitted well for each unit should be located in the center of the NW1/4 and the SE1/4 of each quarter section with a tolerance of 200 feet in any direction, and that each well should be located a minimum of 1200 feet from any other producible or drilling oil and gas well.

6. All available geological and engineering data concerning said "D" Sand formation indicates that one well will efficiently and economically drain an area approximately 80-acres more or less, and that the drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently and economically drained by one well producing from said "D" Sand formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the "D" Sand formation underlying the Caretaker Field herein described, in addition to other applicable rules and regulation and orders of the Commission, if any, heretofore adopted and not in conflict herewith.

Rule 1. Eighty (80) acres, more or less, drilling and spacing units shall be and the same are hereby established for the production of oil and associated hydrocarbons from the "D" Sand formation underlying the following described lands in the Caretaker Field, Weld County, Colorado, to-wit:

Township 7 North, Range 60 West, 6th P.M.

Section 12: E1/2

Township 7 North, Range 59 West, 6th P.M.

Section 7: All

Rule 2. Said drilling units shall consist of 80-acres, more or less, and shall consist of the E1/2 and W1/2 or the N1/2 and S1/2 of a governmental quarter section, with the unit designated by the operator of the first well drilled in the quarter section. The permitted well for each unit shall be located in the center of the NW1/4 and the SE1/4 of each quarter section with a tolerance of 200 feet in any direction and that each well shall be located a minimum of 1200 feet from any other producible or drilling oil and gas well.

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 27th day of February, 1990, as of February 20, 1990.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Dennis R. Bicknell, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203