REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 8:30 a.m. on June 18, 1993 in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado on the verified application of Stelbar Oil Corporation for an order amending Order No. 344-1 to allow an additional well to be drilled on each 160-acre drilling and spacing unit with the permitted well to be located no closer than 600 feet from the outer boundary of the unit and no closer than 66 0 feet from any other well producing or capable of production from the Niobrara Formation.

FINDINGS

The Commission finds as follows:

1. Stelbar Oil Corporation, 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 September 18, 1978 the Commission issued Order No. 344-1 which established 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Niobrara Formation underlying the below-described lands and that said drilling units shall consist of a quarter section of land, according to the governmental survey thereof, and the permitted well for each such drilling unit shall be located no closer than 900 feet from the b oundaries of the quarter section upon which it is located for the White Eagle Field, Washington County, Colorado, to-wit:

Township 2 South, Range 50 West, 6th P.M. Section 10: E1/2 Section 11: W1/2 Section 14: All Section 15: E1/2 Section 22: E1/2 Section 23: All

5. That based on the facts stated in the verified application and having been heard by the Hearing Officer and recommended for approval, the Commission should enter an order allowing an additional well to be drilled on each 160-acre drilling and spacing unit located within the White Eagle Field.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or recompleted in the Niobrara Formation underlying the White Eagle Field herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. One hundred-sixty (160) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the Niobrara Formation underlying the following described lands in the White Eagle Field, Washington County, Colorado, to-wit:

Township 2 South, Range 50 West, 6th P.M. Section 10: E1/2 Section 11: W1/2 Section 14: All Section 15: E1/2 Section 22: E1/2 Section 23: All

Rule 2. Said drilling units shall consist of one hundred-sixty (160) acres, and each such drilling unit shall consist of a quarter section of land, according to the governmental survey thereof, and the initial permitted well for any 160-acre drilling unit where there is no producing well shall be located no closer than 600 feet from the boundaries of the quarter section upon which it is located, and an additional well is authorized to be drilled on eac h 160-acre drilling and spacing unit at a location no closer than 600 feet from the outer boundary of the unit and no closer than 660 feet from any other well producing or capable of production from the Niobrara Formation underlying such unit.

IT IS FURTHER ORDERED, that the Director may, without additional notice and hearing, grant exceptions to the permitted well locations provided the owners of the contiguous and cornering drilling units toward which the proposed location would be moved, file a waiver or consent in writing agreeing to said exceptions.

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/or all of the above orders.

ENTERED this day of , 1993 as of June 18,1993.

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 June 23, 1993 ??

(344#2)