REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 18, 1978 at 9:00 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Webb Resources, Inc., for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "D" Sand underlying certain lands in Arapahoe and Elbert Counties, Colorado.

FINDINGS

The Commission finds as follows:

1. Webb 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. Evidence presented at the hearing indicates that the common source of supply of oil and associated hydrocarbons does not underlie the entire area requested to be spaced; therefore, the following described area should be deleted:

Arapahoe County Township 5 South, Range 62 West, 6th P.M. Section 32: N/2SE/4 Section 33: S/2

Elbert County Township 6 South, Range 62 West, 6th P.M. Section 3: NW/4 Section 8: W/2W/2 Section 4: N/2NE/4

5. Evidence presented at the hearing indicates that the "D Sand constitutes a common source of supply of gas underlying the following described lands in Arapahoe and Elbert Counties, Colorado, to-wit:

Arapahoe County Township 5 South, Range 62 West, 6th P.M. Section 32: S/2SE/4

Elbert County Township 6 South, Range 62 West, 6th P.M. Section 3: SW/4 Section 8: E/2, Section 4: S/2, NW/4, E/2W/2 S/2NE/4 Section 9: W/2 Section 5: E/2 NE/4 Section 10: NW/4

6. In order to prevent the waste of oil and gas, as defined by law; to pro-tect the correlative rights of all parties concerned; to prevent the drilling of unnecessary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be made establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "D" Sand underlying the lands herein defined; that said units should be 80-acres, more or less,

(over) consisting of the E/2 and W/2 or the N/2 and S/2 of each quarter section according to the governmental survey thereof, and the permitted well located in the center of the NE/4 and SW/4 of each quarter section with a tolerance of 200 feet in any direction and the following described wells should be considered the permitted wells for the units upon which each is located:

#32-9 Roth, NE/4SE/4 Section 32, T. 5 S., R. 62 W. #4-3 Hay, NE/4NW/4 Section 4, T. 6 S., R.62 W. #4-5 Hay, SW/4NW/4 Section 4, T. 6 S., R.62 W. #4-7 Hay, SW/4NE/4 Section 4, T. 6 S., R.62 W. #4-11 Whitehead, NE/4SW/4 Section 4, T. 6S., R. 62 W. #4-13 Whitehead, SW/4SW/4 Section 4, T. 6S., R. 62 W. #1 Neira, NE/4NE/4 Section 8, T. 6 S., R. 62 W. #8-9 Whitehead, NE/4SE/4 Section 8, T. 6 S., R. 62 W. #8-15 Whitehead, SW/4SE/4 Section 8, T. 6 S., R. 62 W. #10-4 Marts, NW/4NW/4 Section 10, T. 6 S., R. 62 W. (as an exception)

7. Available geological and engineering data concerning said "D" Sand indicate that one well will efficiently and economically drain an area of approximately 80-acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently and economically drained by one well producing from said "D" Sand.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regu-lations shall apply hereafter to wells drilled, completed, or re-completed in the "D" Sand underlying the Deadeye Field, herein described, in addition to other applicable rules and regulations and orders of the Commission, ff any, heretofore adopted and not in conflict herewith:

Rule 1. Eighty (80) acre drilling and spacing units shall be and the same are hereby established for the production of oil and associated hydrocarbons from the "D" Sand underlying the following described lands in the Deadeye Field, Arapahoe and Elbert Counties, Colorado, to-wit:

Arapahoe County Township 5 South, Range 62 West, 6th P.M. Section 32: S/2SE/4

Elbert County Township 6 South, Range 62 West, 6th P.M. Section 3: SW/4. Section 8: E/2, E/2W/2, Section 4: S/2, NW/4, Section 9: W/2, NE/4 S/2NE/4 Section 5: E/2 Section 10: NW/4

Rule 2. Said drilling units shall consist of eighty (80) acres, more or less, and each unit shall consist of the E/2 and the W/2 or the N/2 and the S/2 of each quarter sec-tion according to the governmental survey thereof (the drilling unit shall be designated at the time of filing for the permit to drill), with the permitted well located in the center of the NE/4 and SW/4 of each quarter section with a tolerance of 200 feet in any direction and the following described wells shall be the permitted wells for the units upon which each is located:

#32-9 Roth, NE/4SE/4 Section 32, T. 5 S., R. 62 W. #4-3 Hay, NE/4NW/4 Section 4, T. 6 S., R. 62 W. #4-5 Hay, SW/4NW/4 Section 4, T. 6 8., R. 62 W. #4-7 Hay, SW/4NE/4 Section 4, T. 6 8., R. 62 W. #4-11 Whitehead, NE/4SW/4 Section 4, T. 6 8., R. 62 W. #4-13 Whitehead, SW/4SW/4 Section 4, T. 6 8., R. 62 W. #1 Neira, NE/4NE/4 Section 8, T. 6 8., R. 62 W. #8-9 Whitehead, NE/4SE/4 Section 8, T. 6 8., R. 62 W. #8-15 Whitehead, SW/4SE/4 Section 8, T. 6 8., R. 62 W. #10-4 Marts, NW/4NW/4 Section 10, T. 6 8., R. 62 W. (as an exception)

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 and rules.

ORDERED this 18th day of September, 1978.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary - 3 -