IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE CODELL-NIOBRARA SPACED WELD COUNTY, COLORADO Cause No. 232, 407 Order No. 407-224 AREA AND THE WATTENBERG GAS SPACED AREA, ) 232-169

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 16, 1996, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the application of Amoco Production Company, for an order to amend Order Nos. 407-212 and 232-157 to allow the Pehr Pooling Unit No. 2A Well, located 2,254 feet FNL and 460 feet FWL in Section 1, Township 1 North, Range 67 West, 6th P.M., to be drilled a s an additional well for production from the "J" Sand Formation for the 320-acre drilling and spacing unit consisting of the W1/2 of said Section 1, in lieu of re-entering the existing Pehr Pooling Unit No. 2 Well as previously approved.

FINDINGS

The Commission finds as follows:

1. Amoco Production Company, 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. The Pehr Pooling Unit #2 Well located at a legal "J" Sand location in the SW1/4 NW1/4 of Section 1, Township 1 North, Range 67 West, 6th P.M. is currently shut-in due to junk in the hole as a result of problems incurred during a recompletion to the Codell and Niobrara Formations.

5. In Order Nos. 407-212 and 232-157, the Commission allowed the Pehr Pooling Unit No. 2 Well, located 1,710 feet FNL and 990 feet FWL, in the SW1/4 NW1/4 of Section 1, Township 1 North, Range 67 West, 6th P.M., to be re-entered and sidetracked to a bottom hole location of approximately 2,220 feet FNL and 520 feet FWL in the SW1/4 NW1/4 as an additional third well for production from the "J" Sand Formation for the 320-acre drilling and spacing unit cons isting of the W1/2 of said Section 1 and to commingle production with the Codell and Niobrara Formation for the 80-acre drilling and spacing unit consisting of the W1/2 NW1/4 of Section 1, and approved the proposed allocation method.

6. This matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing that the drilling of a new well will reduce the risk and lower the total drilling cost and that a new well will reduce surface owner disturbance.

7. Based on the facts stated in the application, having received no protests, and having been heard by the Hearing Officer who recommends approval, an order of the Commission should be entered amending Order Nos. 407-212 and 232-157 to allow the Pehr Pooling Unit No. 2A Well, located 2,254 feet FNL and 460 feet FWL in Section 1, Township 1 North, Range 67 West, 6th P.M., to be drilled as an additional well for production from the "J" Sand Formation for the 320-acre drilling and spacing unit consisting of the W1/2 of said Section 1, in lieu of re-entering the existing Pehr Pooling Unit No. 2 Well as previously approved.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-212 and 232-157 is hereby amended to allow the Pehr Pooling Unit No. 2A Well, located 2,254 feet FNL and 460 feet FWL in Section 1, Township 1 North, Range 67 West, 6th P.M., to be drilled as an additional well for production from the "J" Sand Formation for the 320-acre drilling and spacing unit consisting of the W1/2 of said Section 1, in lieu of re-entering the existing Pehr Pooling Unit No. 2 Well as previously 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 , 1996, as of October 16, 1996.

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 March 25, 1997 ??

(407#224)