IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE DRAGOON FIELD, ARAPAHOE COUNTY COLORADO Cause No. 253 Order No. 253-3

REPORT OF THE COMMISSION

TO ALL INTERESTED PARTIES AND TO WHOM IT MAY CONCERN:

This cause came on for hearing before the Commission on August 17, 1987, at 9:00 A.M. in Room 110, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing, as required by law, on the application of H& R. Well Services, Inc. for an order to amend Order No. 253-1 and 253-2 and allow the drilling of an additional well on the undrilled 40 acre tracts on each 80 acre drilling and spacing units for the production of oil and associated hydrocarbons from the D' Sand underlying certain lands in the Dragoon Field, Arapahoe County, Colorado.

FINDINGS

1. H& R. Well Services, Inc., as an 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 April 18, 1972, the Commission authorized Order No. 253-1 to be issued by which 80-acre drilling and spacing units were established for the production of oil from the D' Sand underlying certain lands in the Dragoon Field. The units consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section with the permitted well located in the center of 200 feet in any direction to avoid surface azards or obstruction. The spaced area was extended by Order No. 253-2.

5. Based upon the facts stated in the verified application and exhibits submitted and receiving no objections and having been heard by the Director as hearing officer on August 14, 1987, and recommended for approval, the Commission should enter an order allowing the drilling of an additional well on each 80 acre drilling and spacing unit for the production of oil and associated hydrocarbons from the D' Sand underlying the following described lands in the Dragoon Field, Arapahoe County, Colorado:

Township 4 South, Range 62 West, 6th P.M. Section 29. SW/4, W/2 SE/4 Section 33: W/2 SW/4, W/2 NW/4 Township 5 South, Range 62 West, 6th P.M. Section 5: All Section 9: W/2 NW/4

ORDER

NOW THEREFORE IT IS ORDERED that Order Nos. 253-1 and 253-2 are hereby amended and an additional well is hereby allowed to be drilled on the undrilled 40 acre tract on each 80 acre drilling and spacing unit for the production of oil and associated hydrocarbons from the D' Sand underlying the following described lands in Arapahoe County, Colorado:

Township 4 South, Range 62 West, 6th P.M. Section 29: SW/4, W/2 SE/4 Section 33: W/2 SW/4, W/2 NW/4 Township 5 South, Range 62 West, 6th P.M. Section 5: All Section 9: W/2 NW/4

IT IS FURTHER ORDERED that the location that the location of such additional well shall be in the center of the undrilled 40 acre quarter-quarter section with a tolerance of 200 feet in any direction to avoid surface hazards or obstruction.

IT IS FURTHER ORDERED, that the above order shall become effective forthwith.

ENTERED this 3rd day of September of August 17, 1987.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO By Frank J. Piro, Secretary

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