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

REPORT OF THE COMMISSION

                        The Commission heard this matter on October 31, 2011, at the City of Littleton Council Chambers, 2255 West Berry Avenue, Littleton, Colorado 80120 upon application for an order to establish an approximate 30-acre drilling and spacing unit for Section 16, Township 6 South, Range 92 West, 6^th P.M., Garfield County, Colorado, for development and production of oil, gas and related hydrocarbons from the Williams Fork and Iles Formations of the Mesaverde Group.

FINDINGS

The Commission finds as follows:

1.      Antero Resources Piceance Corporation, (“Antero“ or “Applicant”), 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. On January 9, 2006, the Commission issued Order No. 191-17, which among other things, established a drilling and spacing unit and approved the equivalent of one well per 10-acre well density for the NW¼ NE¼ of Section 16, Township 6 South, Range 92 West, 6^th P.M. for the production of gas and associated hydrocarbons from the Williams Fork Formation. 

5. On August 25, 2011, Antero, by its attorneys, filed with the Commission a verified application ( “Application”) for an order to: 1) establish an approximate 30-acre drilling and spacing unit for the below-described lands (“Application Lands”) for development of and production from the Williams Fork and Iles Formations of the Mesaverde Group; 2) authorize 10-acre well density for the Application Lands; 3) provide that Iles Formation wells shall be drilled and completed only in conjunction with the drilling and completion of wells in the Williams Fork Formation; and 4) pool all nonconsenting interests in the approximate 30-acre drilling and spacing unit established for the Application Lands:

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

Section 16:   W½ NW¼ NE¼, and W½ E½ NW¼ NE¼ 

6.  On October 18, 2011, Antero, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits. Sworn written testimony and exhibits were submitted in support of the Application.

                        7.  Land testimony and exhibits submitted in support of the Application by Brian F. Wade, Landman for Antero, showed Antero owns a leasehold interest in the Application Lands.  The Wade testimony showed the Commission has granted similar 10-acre density for wells in the Williams Fork and Iles Formations in the vicinity of the Application Lands.

8.  The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.

9.   The Application was reviewed by the Colorado Department of Public Health and Environment (“CDPHE”) pursuant to consultation provisions of Rule 306.d.  In a letter dated October 21, 2011, the CDPHE Oil & Gas Coordinator indicated that CDPHE does not believe any additional conditions of approval are necessary for approving the amended Application.

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

                        11.  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 an approximate 30-acre drilling and spacing unit for Section 16, Township 6 South, Range 92 West, 6^th P.M., Garfield County, Colorado, for development and production of oil, gas and related hydrocarbons from the Williams Fork and Iles Formations of the Mesaverde Group.

ORDER

NOW, THEREFORE IT IS ORDERED, that an approximate 30-acre drilling and spacing unit is hereby established for the below described lands and 10-acre well density and well location provisions of Order 191-17 are hereby extended to the Iles Formation for the same lands, however, Iles Formation wells shall be drilled and completed only in conjunction with the drilling and completion of wells in the Williams Fork Formation:

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

Section 16:   W½ NW¼ NE¼, and W½ E½ NW¼ NE¼ 

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective immediately.

                        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 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   7^th  day of November, 2011, as of October 31, 2011.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By____________________________________         

                                                                                    Peter J. Gowen, Acting Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

November 7, 2011