REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 11, 2000 at 8:30 a.m. at the Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Tom Brown Inc. for an order to vacate Order No. 323-1 and allow the location of wells drilled to and producing from the Permian-Pennsylvanian formations in the Hamilton Creek Field to be governed by Commission Rule 318.

FINDINGS The Commission finds as follows:

1.Tom Brown, Inc. ("Tom Brown"), 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 April 18, 1977, the Colorado Oil and Gas Conservation Commission issued Order No. 323-1, establishing 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Permian-Pennsylvanian formations with the permitted well to be located no closer than 990 feet from the boundary of the unit for the following lands:

Township 44 North, Range 14 West, N.M.P.M. Sections 1 through 36: All

Township 44 North, Range 15 West, N.M.P.M. Sections 1 through 2: All Sections 11 through 14: All Sections 23 through 26: All Sections 35 through 36: All

5. On May 22, 2000, Tom Brown, by its attorney, filed with the Commission a verified application requesting that the Commission issue an order vacating Order No. 323-1 to allow the location of wells drilled to and producing from the Permian-Pennsylvanian formations in the Hamilton Creek Field to be governed by Commission Rule 318.

6. Five wells were drilled in the Hamilton Creek Field: the State No. 11-16 Well located in the NW 1/4 of Section 16, Township 44 North, Range 14 West, the Norwood Unit 1 Well in the NE 1/4 of Section 13, Township 44 North, Range 14 West, the Federal 34-17 Well located in the SE 1/4 of Section 17, Township 44 North, Range 14 West, the Federal C 1-1 Well located in the SE 1/4 of Section 1, Township 44 North, Range 15 West, and the Government No. 1 Well l ocated in the NE 1/4 of Section 14, Township 44 North, Range 14 West. Only one of these wells obtained production and all of these wells have been plugged and abandoned for over ten years. There has been no Permian-Pennsylvanian production from the lands for at least ten years.

7. On May 26, 2000, a protest to the application was filed with the Commission by Edie Gray Montague. On June 26, 2000 Ms. Montague verbally withdrew the protest and indicated a written withdrawal would follow.

8. Testimony and exhibits presented at the administrative hearing showed the geologic deposition within the application area, the discontinuous nature of the reservoirs, the numerous faults in the application area and that compartmentalization is common due to the faulting in the area.

9. Testimony and exhibits presented at the administrative hearing showed cumulative production of 129 MMCFG for the #11-16 State Well, the only well in the application area to produce from the Permian-Pennsylvanian formations, with a drainage radius of approximately 40 acres.

10. Testimony and exhibits showed that due to a lack of information regarding drainage from the Permian-Pennsylvanian formations, Order No. 323-1 should be vacated and the application lands should be subject to Commission Rule 318.

11. That Tom Brown agrees to be bound by the oral order of the Commission.

12. That based on the testimony and exhibits presented at the administrative hearing, having received a protest that was withdrawn, and having been heard by the Hearing Officer who recommends approval, the Commission should enter an order to vacate Order No. 323-1 to allow the location of wells drilled to and producing from the Permian-Pennsylvanian formations in the Hamilton Creek Field for the lands described in Finding #4 above to be drilled in accor dance with Rule 318 of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission.

ORDER

NOW, THEREFORE IT IS ORDERED that Order No. 323-1 is hereby vacated for the below-listed lands and wells shall be drilled in accordance with Rule 318 of the Colorado Oil and Gas Conservation Commission Rules and Regulations for the production of gas and associated hydrocarbons from the Permian-Pennsylvanian formations:

Township 44 North, Range 14 West, N.M.P.M. Sections 1 through 36: All

Township 44 North, Range 15 West, N.M.P.M. Sections 1 through 2: All Sections 11 through 14: All Sections 23 through 26: All Sections 35 through 36: All

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 order.

ENTERED this day of July, 2000, as of July 11, 2000.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary

Dated at Suite 801 1120 Lincoln Street Denver, Colorado 80203 July 24, 2000 ??

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