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 AN UNNAMED AREA, KIT CARSON COUNTY, COLORADO	) ) ) )	CAUSE NO. 1 ORDER NO. 1-20 (Formerly 1-120) AMENDED

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 23, 1991 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 application of Union Pacific Resources Company for an order granting an exception to the permitted well location as provided for in Rule 318 of the Colorado Oil and Gas Conservation Commission Rules and Regulations, for production from the Morrow Formation underlying these lands.

FINDINGS

The Commission finds as follows:

            1.      Union Pacific Resources 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.      Rule 318 of the Colorado Oil and Gas Conservation Commission Rules and Regulations, in addition to other things, provides that all wells drilled for oil or gas to a common source of supply in excess of 2,500 feet in depth shall be located not less than 600 feet from any lease line, and shall be located not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply, provided further that the Commission may grant an exception to the requirements of this rule because of topographical conditions, archeological conditions or irregular sections or if waivers from offsetting owners can be obtained.  The NW¼ of Section 27 Township 11 South, Range 42 West, 6^th P.M., Kit Carson County, lies within the area covered by this rule.

            5.      Union Pacific Resources Company requested waivers as required by Rule 318, from mineral owners offsetting the NW¼ of Section 27.  Waivers were not obtained.

            6.      The matter was heard by the Hearing Officer who recommends approval based upon a surface obstruction and the geophysical testimony presented at an administrative hearing, in addition to the limited drilling activity in the area.

            7.      A protest and an objection to the application were received and an order of the Commission should be entered allowing a well to be drilled at the above-described exception location.

ORDER

NOW, THEREFORE, IT IS ORDERED that an exception to the permitted well location as provided for in Rule 318 of the Colorado Oil and Gas Conservation Commission Rules and Regulations, is hereby granted for a well to be drilled 400 feet FNL and 300 feet FWL in NW¼ NW¼ of Section 27 Township 11 South, Range 42 West, 6^th P.M., Kit Carson County, Colorado, for production from the Morrow Formation.

IT IS FURTHER ORDERED, that if a commercial well shall be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantages which the person securing the exception may have over other producers by reason of drilling the well as an exception, including suitable provisions to prevent the production from the well drilled as an exception of more than its just and equitable share of the oil and gas in the pool.

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 7th day of November, 1991, as of October 23, 1991.

AMENDED this 5th day of December, 1991, as of October 23, 1991.

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

December 5, 1991