REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 19, 1994, in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of Rex Monahan for an order to extend the spaced area of the Codell-Niobrara Spaced Area as established by Order No. 407-1 and subsequent orders by the addition of the W1/2 NW1/4 of Section 19, Township 5 North, Range 62 Wes t, 6th P.M.

FINDINGS

The Commission finds as follows:

1. Rex Monahan 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. A protest to the application was filed by National Hog Farms, Inc.

5. In Order No. 407-1, the Commission established 80-acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation. Wells shall be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction. In Order Nos. 407-10 and 407-13, the Commission amended Order No. 407-1 to include production from the Niobrara Formation in certain lands and to allow the downhole commingling of production from the Codell and Niobrara Formations.

6. Testimony presented at the hearing indicated that the Farr No. 2-19 Well located 990 feet FNL and 990 feet FWL, in the NW1/4 NW1/4 of Section 19, Township 5 North, Range 62 West, 6th P.M. was drilled and completed in 1985 for production from the Codell and Niobrara Formations. The Well has been shut in since 1989.

7. Additional testimony indicated that the Codell and Niobrara Formations are common sources of supply for oil, gas and associated hydrocarbons underlying the NW1/4 NW1/4 of Section 19, Township 5 North, Range 62 West, 6th P.M., in addition to the area set forth in Order No. 407-1 and subsequent orders. Further testimony indicated that the application lands are located approximately seven (7) miles from lands included in Cause No. 407.

8. Testimony presented indicated that the applicant wishes to perform a workover operation on the Farr No. 2-19 Well to obtain additional production from the Codell and Niob4rara Formations. Volumetric calculations were provided for a drainage area of 80-acres.

9. Upon consideration of the testimony and exhibits presented at the hearing, the Commission should deny the application to establish an 80-acre drilling and spacing unit consisting of the W1/2 NW1/4 of said Section 19, and establish a 40-acre drilling and spacing unit consisting of the NW1/4 NW1/4 of said Section 19, for production from the Codell and Niobrara Formations.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that a 40-acre drilling and spacing unit consisting of the NW1/4 NW1/4 of said Section 19, Township 5 North, Range 62 West, 6th P.M. is hereby established for production from the Codell and Niobrara Formations, authorizing the downhole commingling of production from the Codell and Niobrara Formations, and designating the Farr No. 2-19 Well as the permitted well for said 40-acre drilling and spacing unit.

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 , 1994, as of September 19, 1994.

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 October 12, 1994 ??

(407#159)