IN THE MATTER OF THE PROMULGATION                   CAUSE NO. 270
AND ESTABLISHMENT OF FIELD RULES TO
GOVERN OPERATIONS IN THE LONE PINE FIELD,      ORDER NO. 270-2
JACKSON COUNTY, COLORADO 

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 12, 2002 at 10:00 a.m., in the Raton Room, Holiday Inn Trinidad, 3125 Toupal Drive, Trinidad, Colorado on the verified application of R & G Oil, LLC, for an order to vacate Order No. 270-1 to allow production from the gas cap zone as oil production has declined to an uneconomical level. Gas production would re-establish revenues without impacting oil reserves.

FINDINGS

The Commission finds as follows:

1. R & G Oil, LLC, 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.

4. On July 20, 1973, the Commission issued Order No. 270-1, which found that the Dakota and Lakota reservoirs consist of a gas cap, oil column and a water zone, and that gas expansion in the gas cap was considered to be an effective producing mechanism and which ordered that no gas shall be produced from the gas cap zone of the Dakota and Lakota Formations unless authorized by the Commission after proper notice and hearing. The following lands are in the Lone Pine Field:

Township 9 North, Range 81 West, 6th P.M.
Section 21: SE SW and SW SE
Section 28: W NE, W SE and SE SE
Section 33: E NE and SW NE

5. On December 14, 2001, R & G Oil, LLC filed with the Commission a verified Application for an order to vacate Order No. 270-1 to allow production from the gas cap zone as oil production has declined to an uneconomical level. Gas production would re-establish revenues without impacting oil reserves.

6. Testimony presented at the administrative hearing indicated that there are currently twenty (20) wells in the field with an average field production of fifty (50) barrels of oil per day. At this production rate the field is uneconomic to continue operations. Approval of the application would result in the production of additional oil and gas reserves and would allow for the efficient and economic development of the field.

7. R & G Oil, LLC agreed to be bound by oral order of the Commission

8. Based on the facts stated in the verified application, having received no protests and having been heard by the Hearing Officer who recommended approval, the Commission should approve an order to vacate Order No. 270-1 to allow production from the gas cap zone.

ORDER

NOW, THEREFORE IT IS ORDERED, that Order No. 270-1 is hereby vacated and the lands shall be placed under the provisions of the Rules and Regulations 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.

ENTERED this 25th day of February, 2002, as of February 12, 2002.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Dated at Suite 801 Patricia C. Beaver, Secretary 1120 Lincoln Street Denver, Colorado 80203 February 25, 2002.

(270#2)