IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE DOUGLAS CREEK-SOUTH FIELD (MANCOS "B" FORMATION), RIO BLANCO COUNTY, COLORADO Cause No. 311 Order No. 311-8

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 18, 1994 at 8:30 a.m. in Room 610, State Services Building, 1525 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. 311-4 to allow a well to be drilled at an exception location in the SW1/4 of Section 6, Township 4 South, Range 101 West, 6th P.M., Rio Blanco County, for the production of gas and associated hydrocarbons from the Mancos "B" Formation, for the 160-acre drilling and spacing unit.

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 February 17, 1978, the Commission authorized Order No. 311-4 to be issued, which among other things, established 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mancos "B" Formation underlying certain lands in Rio Blanco County, Colorado, with the permitted well to be located no closer than 600 feet from the boundaries of the quarter section upon which it is located.

5. This matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing on the topography in the SW1/4 and ability to use an existing drill pad from which to drill the well.

6. No objections to the application were received and an order of the Commission should be entered allowing the SDC No. 5 Well to be drilled at an exception location 2198 feet FSL and 1980 feet FWL in the NE1/4 NW1/4 of Section 6, Township 4 South, Range 101 West, 6th P.M.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that an exception is hereby granted to the permitted well location established by Order No. 311-4, for the Douglas Creek-South Field, Rio Blanco County, Colorado, to allow the SDC No. 5 Well to be drilled at an exception location 2198 feet FSL and 1980 feet FWL in the NE1/4 NW1/4 of Section 6, Township 4 South, Range 101 West, 6th P.M., for the production of gas and associated hydrocarbons from the Mancos "B" Formation.

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 , 1994, as of July 18, 1994.

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 July 28, 1994

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