Order No. 139-33

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE RULISON FIELD, GARFIELD COUNTY, COLORADO

Cause No. 139 Order No. 139-33

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 7, 1998 in Suite 801, 1120 Lincoln Street, Denver, Colorado on the verified application of Barrett Resources Corporation ("Barrett") for an order allowing the optional drilling of additional wells, up to sixteen (16) wells per 320-acre drilling and spacing unit and in cases where the application lands constitute only a portion of a given 320-acre drilling and spacing unit, an increase in the number of wells which can be optionally drilled into and produced from such lands to the equivalent of one Williams Fork Formation well per 20-acres for the certain lands in the Rulison Field for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group.

FINDINGS

The Commission finds as follows:

1. Barrett Resources Corporation, 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 July 16, 1979, the Commission issued Order No. 139-8 which established 320-acre drilling and spacing units for production from the Mesaverde Formation, with the permitted well to be located no closer than 600 feet from the boundaries of the quarter section upon which it is located and no closer than 1200 feet from another producing or producible well in the same formation, including in part, the below-listed lands:

Township 6 South, Range 94 West, 6th P.M. Section 20: W1/2 NW1/4, S1/2 Section 21: S1/2 NW1/4, S1/2 Section 22: SW1/4 Section 27: NW1/4, NW1/4 SW 1/4 Section 28: NE1/4, E1/2 SE1/4, N1/2 NW1/4 Section 29: N1/2 NE1/4, NE1/4 NW1/4

5. On February 22, 1994, the Commission issued Order No. 139-26, which, among other things, allowed four (4) wells to be optionally drilled into and produced from the Williams Fork Formation, with the permitted well to be located no closer than 600 feet from the lease line nor 1,200 feet from any other producible or drilling oil and gas well in the Williams Fork Formation, including in part, the above-described lands.

6. On February 21, 1995, the Commission issued Order No. 139-28 which among other things allowed eight (8) wells to be optionally drilled into and produced from the Williams Fork Formation, with the permitted well to be located no closer than 400 feet from the boundaries of the unit and no closer than 800 feet from any existing Williams Fork Formation well or wells, including in part, the below-described lands:

Township 6 South, Range 94 West, 6th P.M. Section 27: NW1/4, NW1/4 SW 1/4 Section 28: NE1/4, E1/2 SE1/4, N1/2 NW1/4 Section 29: N1/2 NE1/4, NE1/4 NW1/4

7. On October 14, 1997, Barrett Resources Corporation, by its attorney, filed with the Commission a verified application, for an order allowing the optional drilling of additional wells, up to sixteen (16) wells per 320-acre drilling and spacing unit and in cases where the application lands constitute only a portion of a given 320-acre drilling and spacing unit, an increase in the number of wells which can be optionally drilled into and produced from su ch lands to the equivalent of one Williams Fork Formation well per 20-acres for the below-described lands in the Rulison Field for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group. The permitted well shall be located no closer than 200 feet from the outer boundaries of the drilling unit and no closer than 400 feet to any well or wells producing from the same formation and in cases where the applica tion lands constitute only a portion of a 320-acre drilling and spacing unit, each welll should be located no closer than 200 feet from the boundaries of the drilling unit; no closer than 200 feet from the boundary of the applications lands and no closer than 400 feet from any existing Williams Fork Formation well without exception being granted by the Director, for the below-listed lands:

8. On December 19, 1997, Joan L. Savage filed with the Commission a Motion to Intervene on the grounds that adverse impacts to ground water have not been taken into consideration for the application lands.

9. On December 26, 1997, the Office of Emergency Management in Garfield County filed a letter to serve as an Official Notice of Protest under Rule 509.

10. On December 30, 1997, the Applicant filed a Motion to disqualify John W. Savage, Counsel for Joan L. Savage.

11. On January 5, 1998, the Commission received a faxed letter from John W. Savage, stating he would be unable to attend the Commission hearing and asked for a continuation of the matter.

12. Letters in support of the application were received from William Clough, Unocal Corporation, the Vassar Company and Richard L. Heath.

13. At the January 7, 1998 hearing, the Commission denied intervenor status to Joan L. Savage, but allowed her representative to make a statement pursuant to Rule 510.

14. At the January 7, 1998 hearing, the Commission accepted the letter filed by Garfield County as an intervention under Rule 509.b. The Applicant went on record stating they did not agree with Garfield County being recognized as an intervenor.

15. Pursuant to Rule 510., Janie Hines, Carol Frederick and Daniel Savage made statements in reference to their concerns about the Barret application regarding adverse environmental impacts, and impacts to public health, safety and welfare.

16. The Commission heard testimony from representatives of Barrett to support a finding that one well will not efficiently and economically drain the above-described drilling and spacing units, based on geological and engineering data, and that additional wells are necessary to prevent waste and protect correlative rights, and to recover gas and associated hydrocarbons from the Williams Fork Formation.

17. Testimony was presented by COGCC staff engineer Jaime Adkins and Deputy Director Brian Macke in reference to bradenhead testing requirements and results.

18. The Commission deemed the testimony and evidence presented by Barrett to be technically adequate and data presented sufficient to protect public health, safety and welfare.

19. Based on the facts stated in the application and the testimony and exhibits presented by Barrett at the hearing, the Commission finds that the request should be approved to allow the optional drilling of additional wells, up to sixteen (16) wells per 320-acre drilling and spacing unit and in cases where the application lands constitute only a portion of a given 320-acre drilling and spacing unit, an increase in the number of wells which can be opti onally drilled into and produced from such lands to the equivalent of one Williams Fork Formation well per 20-acres for the above-described lands in the Rulison Field for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group. The permitted well should be located no closer than 200 feet from the outer boundaries of the drilling unit and no closer than 400 feet to any well or wells producing from the same formation and in cases where the application lands constitute only a portion of a 320-acre drilling and spacing unit, each welll should be located no closer than 200 feet from the boundaries of the drilling unit; no closer than 200 feet from the boundary of the applications lands and no closer than 400 feet from any existing Williams Fork Formation well without exception being granted by the Director. ORDER

NOW, THEREFORE, IT IS ORDERED, that Cause No. 139 is hereby amended to allow the optional drilling of additional wells, up to sixteen (16) wells per 320-acre drilling and spacing unit and in cases where the application lands constitute only a portion of a given 320-acre drilling and spacing unit, an increase in the number of wells which can be optionally drilled into and produced from such lands to the equivalent of one Williams Fork Formation well per 20-acres for the certain lands in the Rulison Field for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group. The permitted well shall be located no closer than 200 feet from the outer boundaries of the drilling unit and no closer than 400 feet to any well or wells producing from the same formation and in cases where the application lands constitute only a portion of a 320-acre drilling and spacing uni t, each welll should be located no closer than 200 feet from the boundaries of the drilling unit; no closer than 200 feet from the boundary of the applications lands and no closer than 400 feet from any existing Williams Fork Formation well without exception being granted by the Director.

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 February, 1998.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary Dated at Suite 801 1120 Lincoln Street Denver, Colorado 80203 February 4, 1998 ??

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