REPORT OF THE COMMISSION

This cause came on for an emergency hearing before the Commission on September 2, 1994 at 3:00 p.m., in Suite 380, 1580 Logan Street, Denver, Colorado, after waiver of Notice of Hearing by all interested parties, on the application of Larry and Gail Odell, for an order appealing Order No. 318-5, with respect to lands owned by the Odell's in Sections 12 and 13 of Township 1 North, Range 45 West, 6th P.M., for production of gas and associated hydrocarbons from the Niobrara Formation.

FINDINGS

The Commission finds as follows:

1. Larry and Gail Odell, as applicants herein, are interested parties in the subject matter of the above-referenced hearing.

2. Notice of the time, place and purpose of the hearing has been given.

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 20, 1994, the Commission issued Order No. 318-5 which amended Order No. 318-3 and allowed an additional well to be drilled on each 160-acre drilling and spacing unit for production of gas from the Niobrara Formation underlying the below-listed lands in the Republican Field, with the permitted location for any additional well to be located no closer than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit.

Township 1 North, Range 44 West, 6th P.M. Section 7: All Section 18: All Section 19: All Section 30: All Section 31: All

Township 1 North, Range 45 West, 6th P.M. Sections 7 through 36: All

Township 1 South, Range 45 West, 6th P.M. Sections 3 through 5: All

5. Testimony presented at the emergency hearing indicated that on May 2, 1994 Samedan Oil Corporation filed with the Commission, an application for a hearing and order amending Order No. 318-3 to allow an additional well to be drilled on each 160-acre drilling and spacing unit for certain lands in the Republican Field. Testimony also presented indicated that Larry and Gail Odell sent a letter to the Commission, received on May 26, 1994, protesting the allowance of any additional wells. An administrative hearing on the application was held on June 16, 1994, as no protests to the hearing application had been received. The application was approved by the Commission at its hearing on June 20, 1994. On July 21, 1994, Larry and Gail Odell filed with the Commission an application to appeal Order No. 318-5 issued on June 20, 1994.

6. Additional testimony presented at the emergency hearing indicated that the Odell's were not listed as interested parties for the June 20, 1994 hearing and therefore did not receive notice of hearing. Further testimony indicated that a surface agreement executed by Samedan Oil Corporation was signed by Larry and Gail Odell on May 21, 1994. Testimony was also presented which indicated that Larry and Gail Odell own the surface rights to the below-list ed lands:

Township 1 North, Range 45 West, 6th P.M. Section 12: SW1/4 Section 13: NW1/4, SW1/4 NE1/4, more or less W1/2 SE1/4

7. Testimony presented by Mr. Odell indicated his concern as to the fragility of the land on which gas operations are occurring, including fencing of sites, disposal of drilling fluids and solids, and aesthetics.

8. The record and transcript from the June 16, 1994 and June 20, 1994 hearings providing, among other things, testimony as to why additional wells are necessary to be drilled on 160-acre drilling and spacing units, should be incorporated into the record for the emergency hearing.

9. Commission staff should inspect the wellsites for which Larry and Gail Odell own surface rights as described in Finding 6, to ensure that gas operations performed by Samedan Oil Corporation comply with the provisions of Rule 802.a and b. of the Rules and Regulations of the Oil and Gas Conservation Commission.

10. Based upon the facts stated in the June 16, 1994 and June 20, 1994 hearings, and on the testimony presented at the September 2, 1994 emergency hearing, the Commission should enter an order affirming Order No. 318-5 and requiring inspection by Commission staff at the wellsites for which Larry and Gail Odell own surface rights as herein-described.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order No. 318-5 is hereby affirmed, allowing an additional well to be drilled on each 160-acre drilling and spacing unit for the production of gas and associated hydrocarbons from the Niobrara Formation underlying the below-described lands in the Republican Field in Yuma County, Colorado, for production from the Niobrara Formation, with the permitted location for any additional well to be located no closer than 560 fee t from the outer boundaries of the 160-acre drilling and spacing unit.

Township 1 North, Range 44 West, 6th P.M. Section 7: All Section 18: All Section 19: All Section 30: All Section 31: All

Township 1 North, Range 45 West, 6th P.M. Sections 7 through 36: All

Township 1 South, Range 45 West, 6th P.M. Sections 3 through 5: All

IT IS FURTHER ORDERED, that Commission staff shall inspect the wellsites for which Larry and Gail Odell own surface rights as described in Finding 6, to ensure that gas operations performed by Samedan Oil Corporation comply with the provisions of Rule 802.a and b. of the Rules and Regulations of the Oil and Gas Conservation Commission.

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

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 , 1994, as of September 2, 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 September 25, 1994 ??

(318#6)