REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 15, 1985 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 Lynx Exploration Co., for an order allowing the option to drill an additional well on each 80-acre drilling and spacing unit for the production of oil and associated hydrocarbons from the "J" Sand underlying the S/2 Section 4, Township 2 South, Range 63 West, 6th P.M.

FINDINGS

The Commission finds as follows:

1. Lynx Exploration Co., 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 June 17, 1975, the Commission issued Order No. 291-2 which established 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "J" Sand underlying all of Sections 3, 4, 9 and 10, Township 2 South, Range 63 West, 6th P.M. The units consist of the N/2 and S/2 of a governmental quarter section with the permitted well located in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 200 feet in any direction.

5. Evidence presented at the hearing indicates that one well is insufficient to adequately drain the oil and associated hydrocarbons from the "J" Sand reservoir underlying the 80-acre drilling and spacing units in the S/2 Section 4, Township 2 South, Range 63 West, 6th P.M., therefore the option to drill an additional well on the undrilled 40-acre tract should be allowed. 6. Geological evidence presented at the hearing indicate that the "J" Sand reservoir is continuous, therefore to protect the correlative rights of other operators in the spaced area, the option to drill an additional well on the remaining 80-acre units in the spaced area should be allowed. The Commission should consider this matter on the next-scheduled hearing date.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order No. 291-2 is hereby amended and the following shall apply to wells drilled, completed or recompleted in the "J" Sand underlying the lands described herein, in addition to other applicable rules and regulations and orders of the Commission heretofore adopted and not in conflict herewith:

Rule 1. The option to drill a second well, in addition to the permitted well as provided for by Order No. 291-2, is hereby authorized to be drilled on each 80-acre drilling and spacing unit for the production of oil and associated hydrocarbons from the "j" Sand underlying the following described lands in a portion of the Chieftain Field, Adams County, Colorado, to-wit:

Township 2 South, Range 63 West, 6th P.M. Section 4: S/2

Rule 2. Said additional well shall be located in the center of the undrilled 40-acre tract with a tolerance of 200 feet in any direction.

IT IS FURTHER ORDERED, that a hearing shall be held May 20, 1985 at which time the Commission will consider including in this order, the 80-acre drilling and spacing units in the remaining lands as established by Order No. 291-2.

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

ENTERED this 20th day of April 1985, as of April 15, 1985

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(291-11)