IN THE MATTER Of THE PROMULGATION AND ESTABLISHMENT Of FIELD RULES TO GOVERN OPERATIONS IN THE CODELLNIOBRARA FORMATION SPACED AREA, WELD COUNTY, COLORADO Cause No. 407 Order No. 407-26

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 15, 1986, 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 Shepier & Thomas, for an order pooling all interests in the drilling and spacing unit consisting of the E/2 SE/4, Section 2, Township 4 North, Range 67 West, 6th P.M., Weld County, Colorado, for the development and operation of the Codell-Niobrara formations for the production of oil and/or gas underlying said unit, pursuant to 34-60-116 C.R.S., as amended.

FINDINGS

The Commission finds as follows:

1. Shepier & Thomas, 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 E/2 SE/4, Section 2, Township 4 North, Range 67 West, 6th P.M. has been established as a drilling and spacing unit by the Commisson by Order No. 407-1, issued December 23, 1983. Subsequent orders included the Niobrara formation.

5. Effort has been made to obtain the voluntary pooling of all interest; however attempts to obtain a lease from Mr. & Mrs. Sam S. Vigil or in the alternative, an offer to participate in the well was made along with an AFE in accordance with Rule 534 of the Rules of Practice and Procedure. No response to these offers have been received. Therefore, said owner should be deemed to be non-consenting.

6. Based on the facts stated in the verified application, and receiving no objections and having been reviewed by the Director as Hearing Officer on December 12, 1986 and recommended for approval, the Commission should enter an order pooling all interests in the 80-acre drilling and spacing unit herein described in order to insure proper and efficient development of the oil and gas from the Codel/Niobrara formations underlying said unit.

7. An order of the Commission pooling all interests in said drilling unit is necessary in order to afford each owner of interest in each said drilling unit the opportunity to recover and receive his just and equitable share of the oil and/or gas from the common source of supply underlying said drilling unit.

8. Production obtained from said drilling unit should be allocated to each tract therein on the basis of the proportion that the number of acres in each tract bears to the total number of acres within said drilling unit.

ORDER

NOW THEREFORE, IT IS ORDERED, that:

1. Pursuant to the provisions of 34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act of the State of Colorado, all interests in the drilling and spacing unit consisting of the E/2 SE/4 Section 2, Township 4 North, Range 67 West, 6th P.M., Weld County, Colorado, are hereby pooled for the development of oil and/or gas from the Codel/Niobrara formations underlying said unit.

2. Sam and Genevieve Vigil are considered to be non-consenting owners and are subject to the provisions of 34-60-116(7) C.R.S as amended.

3. The production obtained from said drilling unit shall be allocated to each owner therein in the unit on the basis of the proportion that the number of acres in each tract bears to the total number of mineral acres within said drilling unit; each owner of an interest in said drilling unit shall be entitled to receive his share of the production of the well located on said drilling unit applicable to his interest in said drilling unit.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall be 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 8th day of January, 1987, as of December 15, 1986.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(407-26)