IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE DOUGLAS CREEK-SOUTH FIELD, RIO BLANCO COUNTY, COLORADO Cause No. 311 Order No. 311-6

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 20, 1993 at 8:30 a.m. in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Chaparral Resources, Inc. for an order amending Order No. 311-5 to allow four wells to be drilled at exception locations in Township 4 South, Ranges 101 and 102 West, Rio Blanco County, for the production of gas and as sociated hydrocarbons from the Morapos-Castlegate Formations, for 160-acre drilling and spacing units.

FINDINGS

The Commission finds as follows:

1. Chaparral Resources, 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 August 17, 1981, the Commission authorized Order No. 311-5 to be issued, which among other things, established 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Morapos-Castlegate Formation underlying certain lands in Rio Blanco County, Colorado, with the permitted well to be located no closer than 900 feet from the boundaries of the quarter section upon which it is located.

5. The below-listed wells and locations that are the subject of this application are located on federal lands and have been approved by the Bureau of Land Management as valid locations:

Well Name Location SDC No. 21 677' FSL, 1915' FEL 6-T4S-R101W SDC No. 22 808' FSL, 1303' FEL 1-T4S-R102W SDC No. 23 2345' FNL, 487' FEL 1-T4S-R102W SDC No. 24 963' FNL, 603' FWL 6-T4S-R101W

6. This matter was heard by the Hearing Officers who recommend approval based upon the receipt of waivers signed by all but three offset owners and upon the testimony on the topography and economic advantages of the exception locations presented at the administrative hearing.

7. No objections to the application were received and an order of the Commission should be entered allowing four wells to be drilled at the above-described exception location.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that an exception is hereby granted to the spacing pattern established by Order No. 311-5, for the Douglas Creek-South Field, Rio Blanco County, Colorado, for the below-listed wells to be drilled at exception locations, for the production of gas and associated hydrocarbons from the Morapos-Castlegate Formation:

Well Name Location SDC No. 21 677' FSL, 1915' FEL 6-T4S-R101W SDC No. 22 808' FSL, 1303' FEL 1-T4S-R102W SDC No. 23 2345' FNL, 487' FEL 1-T4S-R102W SDC No. 24 963' FNL, 603' FWL 6-T4S-R101W

IT IS FURTHER ORDERED, that should a commercial well be completed at the locations set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

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

Entered this day of , 1993, as of September 20, 1993.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 September 27, 1993 ??

(311#6)