IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO

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CAUSE NO. 407

ORDER NO. 407-62

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 16, 1991, in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of Eddy Oil Company for an order to rescind Order No. 407-48, which involuntarily pooled all interests in the E1/2 NE1/4 of Section 26, Township 4 North, Range 67 West, 6th P.M., Weld County, Colorado for production of oil, gas and associated hydrocarbons from the Codell and Niobrara formations underlying said lands for the development and operation of oil and gas from the Codell-Niobrara formation underlying said unit, pursuant to Colorado Revised Statutes, 34-60-116, 1984.

FINDINGS

The Commission finds as follows:

1. Eddy Oil 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 E1/2 NE1/4 Section 26, Township 4 North, Range 67 West, 6th P.M., has been established as a drilling and spacing unit by the Commission by Order No. 407-1 issued December 23, 1983. Subsequent orders included the Niobrara formation.

5. One hundred percent of the leasehold interest for the 80-acre unit consisting of the E1/2 NE1/4 of Section 26, Township 5 North, Range 67 West, 6th P.M. has been obtained by the applicant since Order No. 407-48 was issued on October 16, 1989, thus the order for involuntary pooling is not necessary.

6. Based on the facts stated in the verified application and having been heard by the Hearing Officer who recommended approval of the application, and having received no protests, the Commission should approve the applicant's request and rescind Order No. 407-48 which involuntarily pooled all interests in the E1/2 NE1/4 of said Section 26 for the commingled production of oil, gas and associated hydrocarbons from the Niobrara and Codell formations, pursuant to Colorado Revised Statutes, 34-60-116, 1984.

7. At the time of administrative hearing the parties agreed to be bound by the verbal order of the Commission in this matter.

ORDER

NOW, THEREFORE, IT IS ORDERED, that, Order 407-48 which was issued October 16, 1989 to involuntarily pool the 80-acre drilling and spacing unit consisting of the E1/2 NE1/4, Section 26, Township 4 North, Range 67 West, 6th P.M., Weld County, Colorado, for production of oil, and gas and associated hydrocarbons from the Codell and Niobrara formations underlying said lands, pursuant to to [sic] Colorado Revised Statutes, 34-60-116, 1984, be rescinded.

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 3rd day of May, 1991, as of April 16, 1991.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Patricia C. Beaver, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203

May 1, 1991