IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER Of THE PROMULGATION AND ESTABLISHMENT Of FIELD RULES TO GOVERN OPERATIONS IN THE CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO

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CAUSE NO. 407

ORDER NO. 407-15

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 19, 1985 at 9:00 a.m., in Room 110 State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Fountain Oil & Gas, Inc., for an order pooling all interests in a unit consisting of the W1/2NE1/4 [sic] Section 10, Township 5 North, Range 67 West, 6th P.M., for the development and operation of the Codell formation for production of oil, gas and associated hydrocarbons underlying said unit, pursuant to 34-60-116 C.R.S., as amended.

FINDINGS

The Commission finds as follows:

1. Fountain Oil & Gas, 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 December 20, 1983, the Commission issued Order No. 407-1 which, among other things, established 80-acre drilling and spacing units for the production of oil and/or gas from the Codell formation underlying certain lands in Adams, Boulder, Jefferson, Larimer and Weld Counties, Colorado. The units consist of the E1/2 and W1/2 or the N1/2 and S1/2 of a governmental quarter section.

4. The well is located on lands in which the applicant does not own an interest and was drilled in September 1983 prior to the issuance of Order No. 407-1.

5. Applicant had been offered an opportunity to participate prior to the drilling of the well and declined.

6. Operator of the well, Shepler & Thomas, is respondent and has not designated a drilling unit.

7. It has been two years since the well has been completed and only now has the applicant decided to seek inclusion in the well.

8. Under the circumstances of this matter, it would not be just and reasonable to allow the forced pooling sought by the applicant, therefore the application should be denied.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the application, filed July 8, 1985 by Fountain Oil & Gas, Inc. for an order to pool all interests in a unit consisting of the W1/2SE1/4 Section 10, Township 5 North, Range 67 West, 6th P.M., Weld County, Colorado for the development and operation of the Codell formation underlying said lands is hereby denied.

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 rights, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

ENTERED this 10th day of September, 1985, as of August 19, 1985.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary