REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 20, 1989 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Apex Operating Company, Inc., for an order allowing a second well to be drilled for the production of oil and associated hydrocarbons for certain 160-acre drilling and spacing units from the "D" Sand underlying lands in Commanche Creek Field, Elbert County, Colorado.

FINDINGS

The Commission finds as follows:

1. Apex Operating Company, Inc., 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 September 18, 1973, the Commission issued Order No. 276-1 which established 160-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "D" Sand underlying certain lands in the Commanche Creek Field, Elbert county, Colorado.

5. The Hearing Officer heard the matter at an administrative hearing and recommends that the application be approved. No protest to the application were filed and the applicant agreed to be bound by the verbal order of the Commission.

6. A second well should be allowed for each of the below listed 160-acre drilling and spacing units at the location given with the well to be located in the center of the NW/4 and the SE/4 of each quarter section with a tolerance of 200 feet in any direction for topographical and surface hazards:

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Township 6 South, Range 63 West, 6th P.M. 160-acre unit Requested Location Section 12: SE/4 NW/4 SE/4 Section 13: NE/4 NW/4 NE/4 Section 24: NE/4 SE/4 NE/4

Township 6 South, Range 62 West, 6th P.M. 160-acre unit Requested Location/ Section 18: NW/4 SE/4 NW/4

O R D E R

NOW, THEREFORE, IT IS ORDERED, that a second well may be drilled for the production of oil and associated hydrocarbons from the "D" Sand formation for the below listed 160-acre drilling and spacing units:

Township 6 South, Range 63 West, 6th P.M. 160-acre unit Requested Location Section 12: SE/4 NW/4 SE/4 Section 13: NE/4 NW/4 NE/4 Section 24: NE/4 SE/4 NE/4

Township 6 South, Range 62 West, 6th P.M. 160-acre unit Requested Location/ Section 18: NW/4 SE/4 NW/4

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IT IS FURTHER ORDERED, that the permitted well location shall be in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 200 feet in any direction for topographical and surface hazards.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith as the parties have agreed to be bound by the verbal order of the Commission.

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 ,

1989, as of November 20, 1989.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Dennis R. Bicknell, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203

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