IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO Cause No. 407 Order No. 407-191

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 21, 1995, Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the application of Basin Exploration, Inc., for an order to amend Cause No. 407 to allow the Brantner No. 3 Well to be re-entered and directionally drilled with the bottomhole location at an exception location for commingled production from the Codell and Niobrara Formations.

FINDINGS

The Commission finds as follows:

1. Basin Exploration, 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. 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, including Section 34, Township 5 North, Range 65 West, 6th P.M.

5. The Branter No. 3 Well located in the NW1/4 NE1/4 of Section 34, Township 5 North, Range 65 West, 6th P.M. is currently producing from the Codell Formation.

6. This matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing that an exception to the permitted well location is necessary to avoid multiple wellhead facilities by allowing an existing well to be recompleted for production from a different bottomhole location.

7. At the time of the administrative hearing, February 16, 1995, staff recommended that Applicant perform pre-frac and post-frac pressure buildup tests and perform bottomhole pressure tests in nearby wells, including the Branter No. 2 Well, and other tests as required on drilling permit.

8. An order of the Commission should be entered allowing the Brantner No. 3 Well to be re-entered and directionally drilled with the bottomhole location at an exception location 818 feet FNL and 1424 feet FEL in the NW1/4 NE1/4 of Section 34, Township 5 North, Range 65 West, 6th P.M., for commingled production from the Codell and Niobrara Formations, for the 80-acre drilling and spacing unit consisting of the N1/2 NE1/4 of Section 34. Staff recommended testing should be done.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-1 and 407-10 shall be amended to allow the Brantner No. 3 Well to be re-entered and directionally drilled with the bottomhole location at an exception location 818 feet FNL and 1424 feet FEL in the NW1/4 NE1/4 of Section 34, Township 5 North, Range 65 West, 6th P.M., for commingled production from the Codell and Niobrara Formations, for the 80-acre drilling and spacing unit consisting of the N1/2 NE1/4 o f Section 34. Staff recommended testing shall be done.

IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other producers by reason of the drilling of the well as an exception location.

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 17th day of March , 1995, as of February 21, 1995.

CORRECTED this day of . 1995, as of February 21, 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 April 4, 1995 ??

(407#191)