REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 8:30 a.m. on July 17, 1995, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the amended application of HS Resources, Inc., for an order to amend Cause No. 304 and 407 to allow five (5) wells to be recompleted to the Sussex Formation and to allow the downhole commingling of production from the Sussex Formation with prod uction from the Codell and Niobrara Formations. In addition, the applicant requests that an allocation method be approved for 160-acre drilling and spacing units for the Sussex Formation and for 80-acre drilling and spacing units for the Codell and Niobrara Formations.

FINDINGS

The Commission finds as follows:

1. HS Resources, 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. 304-4, which amended Order No. 304-1, the Commission established 320-acre drilling and spacing units for production from the Sussex Formation, including Sections 18, 20 and 23, Township 4 North, Ranges 65 and 66 West, 6th P.M. The Commission issued Order No. 304-5 on February 17, 1978, which established 160-acre drilling and spacing units for production of gas from the Sussex Formation underlying the entire spacing area of the Hambert F ield, with the permitted well located no closer than 600 feet from the boundaries of the unit, including Sections 18, 20 and 23, Township 4 North, Ranges 65 and 66 West, 6th P.M.

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, including Sections 18, 20 and 23, Township 4 North, Ranges 65 and 66 West, 6th P.M.

6. This matter was heard by the Hearing Officers who recommend approval based upon the testimony presented at the administrative hearing that an exception to the permitted well location is necessary since due to faulting one Sussex well will not adequately drain the gas reserves, and to avoid multiple wellhead facilities by allowing existing wells to be recompleted for production from a shallower zone.

7. There is a difference in ownership between the Sussex Formation and Codell and Niobrara Formations and the proposed allocation method should insure that each owner receives their equitable share of production.

8. A letter requesting that the hearing be continued with regard to the Vasser No. 8-30 Well was submitted on July 14, 1995, by Gerrity Oil & Gas Corporation. At the time of the hearing, the Applicant agreed to continue the hearing on this well to the August hearing.

9. No additional objections to the application were received and an order of the Commission should be entered allowing the below-listed wells to be recompleted to the Sussex Formation, allowing the downhole commingling of production from the Sussex Formation with production from the Codell and Niobrara Formations, and approving the allocation method for the 320-acre drilling and spacing units for the Sussex Formation and the 80-acre drilling and spacing units for the Codell and Niobrara Formations.

80-acre 320-acre Codell/Niobrara Sussex Well Name Location Unit Unit HSR Lynch 5-18 SW1/4NW1/4 18-4N-65W W1/2 NW1/4 N1/2 HSR Malina 8-18 SE1/4NE1/4 18-4N-65W E1/2 NE1/4 N1/2 HSR Peck 6-20 SE1/4NW1/4 20-4N-65W E1/2 NW1/4 W1/2 HSR Ruzicano 6-23 SE1/4NW1/4 23-4N-66W E1/2 NW1/4 N1/2 HSR Stein 15-23 SW1/4SE1/4 23-4N-66W W1/2 SE1/4 S1/2

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 304-4 and 407-28 shall be amended to allow the below-listed wells to be recompleted to the Sussex Formation, for the drilling and spacing units described: 80-acre 320-acre Codell/Niobrara Sussex Well Name Location Unit Unit HSR Lynch 5-18 SW1/4NW1/4 18-4N-65W W1/2 NW1/4 N1/2 HSR Malina 8-18 SE1/4NE1/4 18-4N-65W E1/2 NE1/4 N1/2 HSR Peck 6-20 SE1/4NW1/4 20-4N-65W E1/2 NW1/4 W1/2 HSR Ruzicano 6-23 SE1/4NW1/4 23-4N-66W E1/2 NW1/4 N1/2 HSR Stein 15-23 SW1/4SE1/4 23-4N-66W W1/2 SE1/4 S1/2

IT IS FURTHER ORDERED, that downhole commingling of production from the Sussex Formation with production from the Codell and Niobrara Formations shall be allowed, and that the allocation method for the 320-acre drilling and spacing units for the Sussex Formation and for the 80-acre drilling and spacing units for the Codell and Niobrara Formations shall be approved.

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 July 17, 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 August 9, 1995 ??

(304#12)