REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 20, 1981 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 Coseka Resources (USA), Ltd. for an order to extend the limits of the spaced area of the Baxter Pass Field as establish{ by Order No. 365-1. An amended application was filed with the Commission and further hearing in the matter was held on August 17, 198 1.

FINDINGS

The Commission finds as follows:

1. Coseka Resources (USA), Ltd., 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 28, 1980, the Commission issued Order No. 365-1 which established 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Dakota-Morrison formation underlying certain lands in the Baxter Pass Field. The units consist of the N/2 and S/2 of each section with the existing wells being the permitted wells for the units upon which each is located, and for the remaining units the permitted wells to be located in accordance with Rule 328.

5. Testimony presented at the hearing indicates a common source or supply of gas and associated hydrocarbons from the Dakota-Morrison formation underlies in addition to the area set forth in Order No. 365-1 the following described lands in Rio Blanco County, Colorado, to-wit:

Township 4 South, Range 103 West, 6th P.M. Section 25: W/2 Section 33: All Section 26: All Section 34: All Section 27: All Section 35: N/2 Section 28: All and that such area should be made subject to the provisions of Order No. 365-1; however, the W/2 of said Section 25, the E/2 and W/2 of said Section 28, and the N/2 of said Section 35 should be designated the 320-acre units and for the remaining lands of the additional area, the units should consist of the N/2 and S/2 or the E/2 and W/2 of each section The permitted well location should be in accordance with Rule 318 of the Rules and Regu-lations of the Commission, and the existing producing or producible wells from the Dakota Morrison formation should be considered the permitted wells for the units upon which each is located.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the area set forth in Finding 5 herein shall be subject to the provisions of Order No. 365-1 and the spaced area of

(over) the Baxter Pass Field shall henceforth include the following described lands in Rio Blanco County, Colorado, to-wit:

Township 4 South, Range 103 West, 6th P.M. Section 22: All Section 27: All Section 23: All Section 28: All Section 24: All Section 33: All Section 25: W/2 Section 34: All Section 26: All Section 35: N-/2

IT IS FURTHER ORDERED, that the W/2 of said Section 25, the E/2 and W/2 of said Section 28, and the N/2 of said Section 35 shall be designated the 320-acre units and for the remaining lands of the additional area, the units shall consist of the N/2 and S/2 or the E/2 and W-} of each section. The permitted well location shall be in accordance with Rule 318 of the Rules and Regulations of the Commission, and the exist-ing producing or producible wells from the Dakota-Morrison formation shall be consider-ed the permitted wells for the units upon which each is located.

IT IS FURTHER ORDERED, that the provisions contained in the above orders 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 day of September 1981, as of August 17, 1981.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary . -- 2 --(#365-2)