This cause came on for hearing before the Commission at 9:00 a.m. on January 8, 2007, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to vacate the E½ NE¼, SE¼ NW¼ and SW¼ NE¼ from the 320-acre drilling and spacing unit consisting of the N½ of Section 25, Township 6 South, Range 95 West, 6^th P.M., and establish two (2) 80-acre drilling and spacing units consisting of the E½ NE¼ and the SE¼ NW¼ and SW¼ NE¼ of said Section 25, Township 6 South, Range 95 West, 6^th P.M., and allow the equivalent of one (1) well per 10 acres to be drilled on said drilling and spacing units, for production from the Williams Fork Formation of the Mesaverde Group.

FINDINGS

The Commission finds as follows:

1. Williams Production RMT Company (“Williams”) 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 pursuant to the Oil and Gas Conservation Act.

4. On April 20, 1990, the Commission entered Order No. 440-12, which among other things, established 320-acre drilling and spacing units for the production of gas and hydrocarbons from the Mesaverde Formation for certain lands including the N½ of Section 25, Township 6 South, Range 95 West, 6^th P.M.

5. On July 10, 2006, the Commission entered Order Nos. 139-64 and 440-35, which among other things, allowed one well per ten (10) acres to be drilled on certain lands including the E½ NE¼ and SW¼ NE¼ of Section 25, Township 6 South, Range 95 West. 6^th P.M., for production from the Williams Fork Formation of the Mesaverde Group

6. On September 27, 2006, Williams, by its attorney, filed with the Commission a verified application for an order to vacate the E½ NE¼, SE¼ NW¼ and SW¼ NE¼ from the 320-acre drilling and spacing unit consisting of the N½ of Section 25, Township 6 South, Range 95 West, 6^th P.M., and establish two (2) 80-acre drilling and spacing units consisting of the E½ NE¼ and the SE¼ NW¼ and SW¼ NE¼ of said Section 25, Township 6 South, Range 95 West, 6^th P.M., and allow the equivalent of one (1) well per 10 acres to be drilled on said drilling and spacing units, for production from the Williams Fork Formation of the Mesaverde Group.

All future Williams Fork Formation wells should be located downhole anywhere upon such lands but no closer than 100 feet from the outside boundary of the drilling and spacing unit unless such unit boundary abuts or corners lands in respect of which the Commission has not at the time of the drilling permit application granted the right to drill 10-acre density wells, in which event the well may be drilled downhole no closer than 200 feet from that portion of the unit boundary which so abuts or corners the lands in respect of which 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission. Wells will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section unless exception is granted by the Director of the Colorado Oil and Gas Conservation Commission.

7. On November 14, 2006, the Bureau of Land Management filed with the Commission a protest to the application. On November 16 and 21, 2006, prehearing conferences were held with the parties. On November 20, 2006, Williams, by its attorney, filed with the Commission a written request to continue the matter to the January hearing and the hearing in this matter was continued. On December 18, 2006, the Bureau of Land Management withdrew its protest.

8. On December 27, 2006, an administrative hearing was held on the now unprotested application. Testimony and exhibits were presented describing Williams’ leasehold interests in the two (2) 80 acre fee tracts in the N½ of said Section 25, being the E½ NE¼ as one tract and the SE¼ NW¼ and SW¼ NE¼ as the other tract. The remainder of the N½ of said Section 25 consists of federal minerals which are not expected to be leased in the near future. Williams wants to proceed to drill Williams Fork Formation wells on the two (2) described fee tracts in the near future without having to pool or communitize the remainder of the unleased N½ of said Section 25. Testimony indicated that no Williams Fork Formation wells have been drilled on said N½ of Section 25.

9. Williams also requested that both of the 80-acre drilling and spacing units be authorized for ten (10) acre density drilling as originally authorized in Order Nos. 139-64 and 440-35 with the same minimum setback requirements as set forth in those orders to apply to the newly established boundaries of the newly established 80-acre drilling and spacing units.

10. Williams Production RMT Company agreed to be bound by oral order of the Commission.

11. Based on the facts stated in the verified application, having the protest withdrawn, based upon taking notice of the technical evidence introduced in support of the Commission’s Order Nos. 139-64 and 440-35, and the Hearing Officer recommendation to approve the application, the Commission should enter an order to vacate the E½ NE¼, SE¼ NW¼ and SW¼ NE¼ from the 320-acre drilling and spacing unit consisting of the N½ of Section 25, Township 6 South, Range 95 West, 6^th P.M., and establish two (2) 80-acre drilling and spacing units consisting of the E½ NE¼ and the SE¼ NW¼ and SW¼ NE¼ of said Section 25, Township 6 South, Range 95 West, 6^th P.M., and allow the equivalent of one (1) well per 10 acres to be drilled on said drilling and spacing units, for production from the Williams Fork Formation of the Mesaverde Group.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the 320-acre drilling and spacing unit consisting of the N½ of Section 25, Township 6 South, Range 95 West, 6th P.M. for the Williams Fork Formation of the Mesaverde Formation is hereby vacated and two (2) 80-acre drilling and spacing units consisting of the E½ NE¼ and the SE¼ NW¼ and SW¼ NE¼ of said Section 25, are hereby established for the production of gas and associated hydrocarbons from the Williams Fork Formation, allowing the equivalent of one (1) well per 10 acres.

IT IS FURTHER ORDERED, that all future Williams Fork Formation wells drilled upon each of these two(2) 80-acre drilling and spacing units shall be located anywhere downhole within the unit but no closer than one hundred (100) feet from the boundaries of the unit, without exception being granted by the Director, except that with respect to lands abutting or cornering a given 80-acre drilling and spacing unit for which the Commission has not at the time of the drilling permit application granted the right to drill 10-acre density Williams Fork Formation wells, the well shall be located downhole no closer than 200 hundred (200) feet from the boundary of the drilling and spacing unit so abutting or cornering such lands.

IT IS FURTHER ORDERED, that all Williams Fork Formation wells drilled upon the application lands shall be drilled from the surface either vertically or directionally from no more than one (1) pad located on a given quarter quarter section unless exception is granted by the Director of the Colorado Oil and Gas Conservation Commission.

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.

IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.

IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.

ENTERED this _____ day of January, 2007, as of January 8, 2007.

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

January 18, 2007