REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 18, 1984 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 JN Oil & Gas for an order to extend the limits of the spaced area of the Shire Gulch Field (Dakota Formation) by the addition of certain lands and make said lands subject to the provisions of Order No. 347-2.

FINDINGS

The Commission finds as follows:

1. JN Oil & Gas, 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 May 21, 1979 the Commission issued Order No. 347-2 which established 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Dakota formation underlying certain lands in the Shire Gulch Field, Mesa County, Colorado. The units consist of the N/2 and S/2 in Section 1, Township 10 South, Range 97 West, 6th P.M., and for the remaining lands the units consist of the N/2 and S/2 or the E/2 and W/2 of each section. The permitted well is located in the NE/4 and SW/4 of each section and no closer than 600 feet to the boundaries of the quarter section upon which it is located.

5. Geological and engineering evidence presented at the hearing indicates a common source of supply of gas and associated hydrocarbons from the Dakota formation underlies, in addition to the area as set forth in Order No. 347-2, the following described lands in Mesa County, Colorado, to-wit:

Township 9 South, Range 96 West, 6th P.M. Sections 18 thru 21: All Sections 28 thru 30: All Sections 32 and 33: All Township 9 South, Range 97 West, 6th P.M. Section 13: All Section 24: All Section 25: All and that said lands should be made subject to the provisions of Order No. 347-2.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the area as set forth in Finding 5 herein Shall be subject to the provisions of Order No. 347-2, and the Shire Gulch Field (Dakota Formation) for the production of gas and associated hydrocarbons from the Dakota formation, shall henceforth consist of the following described lands in Mesa County, Colorado, to-wit:

Township 9 South, Range 96 West, 6th P.M. Sections 18 thru 21: All Sections 28 thru 33: All Township 10 South, Range 96 West, 6th P.M. Section 6: All Township 9 South, Range 97 West, 6th P.M. Section 13: All Section 24 and 25: All Section 35 and 36: All Township 10 South, Range 97 West, 6th P.M. Sections 1 and 2: 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 orders.

ENTERED this 16th July day of 1984, as of June 18, 1984.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary 2 --(347-5)