BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 9:00 a.m. on March 25, 2010, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to establish three approximate 320-acre drilling and spacing units for the W½ and the E½ of Section 11, and the W½ of Section 12, Township 6 South, Range 92 West, 6^th P.M., and allow the equivalent of one well per 10 acres for said units, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.

FINDINGS

The Commission finds as follows:

1.    Antero Resources Piceance Corporation (“Antero”), 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 pursuant to the Oil and Gas Conservation Act.

4.    Rule 318.a. of the Rules and Regulations of the Commission requires that wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and 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.  Sections 11 and 12, Township 6 South, Range 92 West, 6^th P.M., are subject to this Rule.

5.  On December 23, 2009, Antero, by its attorney, filed with the Commission a verified application to establish three approximate 320-acre drilling and spacing units consisting of the below-listed lands, and to allow the equivalent of one well per 10 acres for said units, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations:

Township 6 South, Range 92 West, 6^th P.M.

All future Williams Fork and Iles Formation wells to be drilled upon said drilling and spacing units should be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Commission.  It is provided, however, that in cases where the lands abut or corner lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill 10-acre density Williams Fork wells, the Williams Fork and Iles Formation wells should be located downhole no closer than 200 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Commission.

Except as previously authorized by order of the Commission, wells to be drilled under this order should be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) and that Iles Formation wells should be drilled and completed only in association with the drilling and completion of wells in the Williams Fork Formation, unless exception is granted by the Commission pursuant to application made for such exception.

6.   On February 8, 2010, Antero, by its attorney, filed with the Commission a written request to approve the application based on the merits of the verified application and the supporting exhibits as is provided for by Rule 511.  Sworn written testimony and exhibits were submitted in support of the application.

7.  Testimony and exhibits submitted in support of the application showed that Antero is the majority leasehold owner of the application lands.  Additional testimony showed that multiple wells have been drilled, tested and completed in the Williams Fork and Iles Formations on lands in the immediate vicinity of the application lands, and that spacing units and development rules for those adjacent lands were established in Order Nos. 191-25 and 191-55.  Further testimony showed that establishing drilling and spacing units and approving 10-acre well density on the application lands, in a manner consistent with development approved for adjacent lands, will promote economic and efficient development of the Williams Fork and Iles Formations, prevent waste, and protect correlative rights.

8.  The above-referenced testimony and exhibits showed that granting the application for well spacing and density will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.

9.  Antero agreed to be bound by oral order of the Commission. 

10.  Based on the facts stated in the verified application, having received no protests, and based on the Hearing Officer review of the application under Rule 511., the Commission should enter an order to establish three approximate 320-acre drilling and spacing units for the W½ and the E½ of Section 11, and the W½ of Section 12, Township 6 South, Range 92 West, 6^th P.M., and allow the equivalent of one well per 10 acres for said units, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.

ORDER

NOW, THEREFORE IT IS ORDERED, that three drilling and spacing units, described below, are hereby established, and one well per 10 acres equivalent well density is approved for said units, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations:

Township 6 South, Range 92 West, 6^th P.M.

IT IS FURTHER ORDERED, that, as to each of the above described drilling and spacing units, Williams Fork and Iles Formation wells shall be located downhole anywhere upon a given spacing unit provided no such wells shall be located downhole any closer than 100 feet from the boundary of the unit unless such 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 Williams Fork Formation wells in which event Williams Fork and Iles Formation wells to be drilled upon the given drilling and spacing unit shall 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.

IT IS FURTHER ORDERED, except as previously authorized by order of the Commission, wells to be drilled under this order shall be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) and that Iles Formation wells shall be drilled and completed only in association with the drilling and completion of wells in the Williams Fork Formation, unless exception is granted by the Commission pursuant to application made for such exception.

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 April, 2010, as of March 25, 2010.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By____________________________________         

                                                                                    Carol Harmon, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

April 24, 2010