REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 19, 1981 at 9:00 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Fuel Exploration, Inc., for an order granting an exception to the spacing pattern as established by Order No. 289-1, Lay Creek Field, Moffat County, Colorado.

FINDINGS

The Commission finds as follows:

1. Fuel Exploration, 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 May 21, 1974, the Commission issued Order No. 289-1 which established 320-acre drilling and spacing units for the production of gas from the Almond formation of the Mesaverde Group, the units being the N/2 and S/2 of each section and the permitted well located in the NW/4 and SE/4 of each section, and no closer than 900 feet' from the boundaries of the quarter section upon which it is located.

5. Evidence presented at the hearing indicates that a well drilled at the permitted location as required by Order No. 289-1 would be partly outside the reservoir and would result in a dry hole; therefore, an exception should be granted for a well to be drilled at a location 660 feet from the west line and 660 feet from the south line, Section 18, Township 8 North, Range 92 West, 6th P.M., and that it be the permitted well for the unit.

6. If a commercial well is drilled on the location as set forth in Finding 5 herein instead of a location as provided for in Order No. 289-1, the Commission should, at the request of interested persons, take such action as will offset any advantage which the person securing the exception may have over other producers by reason of the drilling of the well as an exception.

ORDER

NOW, THEREFORE, IT IS ORDERED, that an exception to Order No. 289-1 is hereby granted for a well to be drilled at a location 660 feet from the west line and 660 feet from the south line, Section 18, Township 8 North, Range 92 West, 6th P.M., Lay Creek Field, Moffat County, Colorado, and that it be the permitted well for the unit; how-ever, if a commercial well is drilled on the location as set forth above, instead of on a location as provided for in Order No. 289-1, the Commission shall, at the request of interested persons, take such action as will offset any advantage which the person securing the exception may have over other producers by reason of the drilling of the well as an exception.

(over)

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

ENTERED this 17th day of November, 1981 as of October 19, 1981.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary -- 2 --

(#289-4)