BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                                  OF THE STATE OF COLORADO

IN THE MATTER OF THE APPLICATION OF                                             )                     CAUSE NO. 1

MITCHELL ENERGY CORPORATION REGARDING                                  )

THE FORFEITURE OF A CERTAIN BOND OR                                           )

BONDS OF CMO RESOURCES, INC. RELATING                                      )                     ORDER NO. 1V-87

TO WELLS LOCATED IN MESA COUNTY, COLORADO                            )                                 (1-209)

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission on August 21, 1995 at 8:30 a.m., in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Mitchell Energy Corporation, for an order to cause the forfeiture of the $30,000 plugging bond posted by CMO Resources, Inc.

FINDINGS

                        The Commission finds as follows:

                        1.  Mitchell Energy Corporation 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.    Testimony presented at the hearing indicated that CMO Resources, Inc. had a farmout agreement with the Applicant and drilled the below-listed wells.  Mitchell Energy Corporation assumed the responsibility for the plugging and abandoning of the reference wells at a cost of $72,000.  Mitchell Energy Corporation requests that if such forfeiture is granted, reimbursement be made to Mitchell Energy Corporation for monies expended in the plugging and abandonment of the below-listed wells to the extent of the recovery of monies under said bond.

Well Name Location                                            

            Kennah Creek Grazing No. 1                                          NE¼ SW¼ Section 20-13 South-97 West

            Whiting No. 1                                                                 NE¼ SW¼ Section 33-12 South-97 West

            Mash No. 1                                                                   NW¼ SW¼ Section 32-12 South-97 West

            Fifield No. 1                                                                  SE¼ NW¼ Section 36-12 South-98 West

                        5.  CMO Resources, Inc. filed a protest to the Application stating all wells in question were plugged; that Mitchell Energy Corporation never was a party to or a beneficiary under the terms of the Plugging Bond; and that the State of Colorado is not a collector or enforcer of obligations between private parties.

                        6.  At the time of the hearing, Mitchell Energy Corporation presented testimony and exhibits outlining their ownership of the above-listed wells through a farm-out agreement with the Protestant and all successor parties.

                        7.  The Commission should issue an Order to Show Cause to CMO Resources, Inc. to appear before the Commission to show cause why an order revoking the CMO Resources, Inc. bond should not be issued or collected.

O R D E R

                        NOW, THEREFORE, IT IS ORDERED, that CMO Resources, Inc., is hereby noticed and directed to appear before the Colorado Oil and Gas Conservation Commission, at its October hearing, to show cause why an order revoking the CMO Resources, Inc. bond should not be issued or collected.

                        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 , 1995, as of August 21, 1995.

                                                                        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

September 20, 1995