IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE MCCLAVE FIELD, KIOWA COUNTY, COLORADO Cause No. 105 Order No. 105-30

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 8:30 a.m. on June 20, 1994, in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado, on the application of Thomas L. Spring for an order allowing a well to be drilled at an exception location in the SE1/4 SW1/4 of Section 35, Township 20 South, Range 48 West, 6th P.M., for production from the McClave Sand, for the 640-acre drilling and spacing unit consisting of said Section 35 .

FINDINGS

The Commission finds as follows:

1. Thomas L. Spring, as applicant herein, is an interested party in the subject matter of the above-referenced matter.

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 May 15, 1957, the Commission issued Order No. 105-1 which established 640-acre drilling and spacing units for the production of oil and associated hydrocarbons from the McClave Sand underlying certain lands in the McClave Field, with the units to consist of a governmental section, with the permitted well to be located no closer than 990 feet from the center of the drilling and spacing unit upon which it is located. Subsequent Order No. 105-2 incl uded additional lands under the McClave Field, including Section 35, Township 20 South, Range 48 West, 6th P.M.

5. The Baughman No. 1-35 Well was drilled in the NE1/4 SW1/4 of Section 35, Township 20 South, Range 48 West, 6th P.M., for production from the McClave Sand, and was plugged and abandoned in 1992 due to a casing leak.

6. Geological and engineering evidence presented at the administrative hearing indicated that approximately one (1) billion cubic feet of gas may remain under Section 35 and that a well located in the SE1/4 SW1/4 of said Section 35 is necessary in order to recover all the hydrocarbons in the McClave Sand underlying the 640-acre drilling and spacing unit.

7. That in order to protect correlative rights and to prevent waste, a well should be authorized to be drilled at an exception location 1,000 feet FSL and 1,980 feet FWL in the SE1/4 SW1/4 of Section 35 for the 640-acre drilling and spacing unit consisting of said Section 35 for production from the McClave Sand.

8. Based on the facts stated in the verified application, having received no protests, and having been heard by the Hearing Officer who recommends approval of the application, the Commission should approve the request and amend Order No. 105-1 to allow an exception well to be drilled and completed for production from the McClave Sand.

O R D E R

NOW, THEREFORE, IT IS ORDERED that Order No. 105-1 is hereby amended and a well is authorized to be drilled at an exception location 1,000 feet FSL and 1,980 feet FWL in the SE1/4 SW1/4 of Section 35, Township 20 South, Range 48 West, 6th P.M., for production from the McClave Sand, for the 640-acre drilling and spacing unit consisting of said Section 35.

IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

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 day of , 1994, as of June 20, 1994.

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 July 8, 1994 ??

(105#30)