REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 19, 1995 at 8:30 a.m., in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of J-W Operating Company, for an order to allow an additional well to be drilled on each 160-acre drilling and spacing unit for the lands in the Wages Field, for production of gas and associated hydrocarbons from the N iobrara Formation.

FINDINGS

The Commission finds as follows:

1. J-W Operating Company, 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 August 20, 1979, the Commission issued Order No. 352-1 establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Niobrara Formation underlying the below-described lands in the Wages Field, Yuma County, Colorado. Each 160-acre drilling and spacing unit shall consist of a quarter section of land, according to the governmental survey thereof, and the permitted well for each drilling and spacing u nit shall be located no closer than 900 feet from the boundaries of the quarter section upon which it is located:

Township 5 North, Range 46 West, 6th P.M. Section 22: All Section 23: All Section 26: All Section 27: All Section 34: All Section 35: All Section 36: All

5. Testimony presented at the administrative hearing indicated that one well would not efficiently and economically drain an area of approximately 160-acres, and that in order to prevent the waste of oil and gas, as defined by law, to protect correlative rights of all parties concerned, and to insure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be entered allowing an additional well to be drilled on each 160-acre drilling and spacing unit, with the permitted well to be located no closer than 560 feet from the outer boundaries of the unit for the production of gas and associated hydrocarbons from the Niobrara Formation for the lands described in Finding 4.

6. Based upon the facts stated in the verified application, having received no protests to the application, and having been heard by the Hearing Officer who recommends approval, the Commission should enter an order 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 herein-described lands in Yuma County, Colorado.

ORDER

NOW, THEREFORE, IT IS ORDERED, that an additional well is hereby allowed to be drilled on each 160-acre drilling and spacing unit, with the permitted well to be located no closer than 560 feet from the outer boundaries of the unit for the production of gas and associated hydrocarbons from the Niobrara Formation underlying the below-described lands in the Wages Field in Yuma County, Colorado:

Township 5 North, Range 46 West, 6th P.M. Section 22: All Section 23: All Section 26: All Section 27: All Section 34: All Section 35: All Section 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 orders.

ENTERED this day of , 1995, as of April 19, 1995.

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 May 18, 1995 ??

(352#3)