BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION AND ) CAUSE NO. 407

ESTABLISHMENT OF FIELD RULES TO GOVERN )

OPERATIONS IN THE CODELL‑NIOBRARA SPACED) ORDER NO. 407‑93.5

AREA, ADAMS, BOULDER, JEFFERSON, LARIMER)

AND WELD COUNTIES, COLORADO )

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 19, 1992, 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 Martin Exploration Management Company and on the Commission's own motion for an order to extend the spaced area of the Codell‑Niobrara Spaced Area as established by Order No. 407‑1 and subsequent orders by the addition of certain lands in Adams, Boulder, Jefferson, Larimer and Weld Counties, Colorado.

FINDINGS

The Commission finds as follows:

1. Martin Exploration Management 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. 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.

5. Testimony was heard by the Hearing Officer that indicates that a common source of oil, gas and associated hydrocarbons Niobrara Formation underlies, in addition to the area set forth in Order No. 407‑1 and subsequent orders, the following described lands in Adams, Boulder and Weld Counties, Colorado, to‑wit:

Township 1 South, Range 67 West, 6th P.M.

Section 4: All

Township 1 South, Range 69 West, 6th P.M.

Section 1, 2 and 12: All

Township 1 North, Range 66 West, 6th P.M.

Sections 15, 16, 22, 28 and 29: All

Township 1 North, Range 67 West, 6th P.M.

Sections 2 and 6: All

Township 1 North, Range 68 West, 6th P.M.

Sections 6, 31, and 32: All

Township 1 North, Range 69 West, 6th P.M.

Sections 1 through 36: All

Township 2 North, Range 66 West, 6th P.M.

Sections 19 through 36: All

Township 2 North, Range 67 West, 6th P.M.

Sections 3, 13, 16, 20, and 36: All

Township 2 North, Range 68 West, 6th P.M.

Sections 12, 13, 24, 26, 27, and 31: All

Township 2 North, Range 69 West, 6th P.M.

Sections 14, 17, 28, 33 through 36: All

Township 3 North, Range 66 West, 6th P.M.

Sections 19, 30 and 32: All

Township 3 North, Range 67 West, 6th P.M.

Sections 21 and 25: All

Township 3 North, Range 68 West, 6th P.M.

Section 14: All

6. That upon the Commission's review evidence indicates that a common source of oil, gas and associated hydrocarbons for the Niobrara Formation underlies, in addition to the area set forth in Order No. 407‑1 and subsequent orders, the following described lands in Adams, Boulder, Jefferson, Larimer and Weld County, Colorado, to‑wit:

Township 1 South, Range 68 West, 6th P.M.

Section 2: SW1/4

Section 14: SE1/4

Section 15: E1/2 and NW1/4

Section 24: NW1/4

Township 1 South Ranges 69 West, 6th P.M.

Sections 3 through 11: All

Sections 13 through 36: All

Township 1 South 70 West, 6th P.M.

Sections 1 through 36: All

Township 2 South, Ranges 69 and 70 West, 6th P.M.

Sections 1 through 36: All

Township 1 North, Range 68 West, 6th P.M.

Sections 1 through 5: All

Sections 7 through 30: All

Sections 33 through 36: All

Township 1 North, Range 70 West, 6th P.M.

Sections 1 through 36: All

Township 2 North, Range 68 West, 6th P.M.

Sections 1 through 11: All

Sections 14 through 23: All

Section 25: All

Sections: 28 through 30: All

Sections 32 through 36: All

Township 2 North, Range 69 West, 6th P.M.

Sections 1 through 13: All

Sections 15 and 16: All

Sections 18 through 27: All

Sections 29 through 32: All

Township 2 North, Range 70 West, 6th P.M.

Sections 1-5: All

Sections 8 through 36: All

Township 3 North, Range 68 West, 6th P.M.

Sections 1 through 13: All

Sections 15 through 36: All

Township 3 North, Range 70 West, 6th P.M.

Sections 1, 12, 13, 21-28, and 33-36: All

Township 4 North, Range 68 West, 6th P.M.

Sections 1-3, 9-16, 21-29 and 32-36: All

Township 4 North, Range 69 West, 6th P.M.

Sections 2-11, 14-22, and 27-34: All

Township 5 North, Range 66 West, 6th P.M.

Sections 12, 13 and 36: All

Township 5 North, Range 68 West, 6th P.M.

Sections 1-16, 23-26 and 34-36: All

Township 5 North, Range 69 West, 6th P.M.

Sections 1-4, 9-16, 20-23, 26-29 and 31-35: All

Township 6 North, Range 68 West, 6th P.M.

Sections 1 through 36: All

Township 6 North, Range 69 West, 6th P.M.

Sections 1-4, 9-16, 21-28, and 33-36: All

7. The existing locations, drilling and/or producing wells in the area described in Findings 5 and 6 herein, should be the permitted wells for the units upon which each is located.

8. No objections to the application or to the Commission's motion were received and the Hearing Officer recommended the application be approved based upon the geological and engineering testimony presented at the administrative hearing.

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

O R D E R

NOW, THEREFORE, IT IS ORDERED, that the area set forth in Findings 5 and 6 herein shall be subject to the following rules and regulations which shall apply hereafter to a well drilled, completed or recompleted in the Codell‑Niobrara Formations, the Codell Formation, and the Niobrara Formation, underlying lands described herein, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith.

Rule 1. Eighty (80) acre drilling and spacing units shall be and the same is hereby established for the production of oil and/or gas from the Codell‑Niobrara Formations underlying the following described lands in Adams, Boulder, Jefferson, Larimer, and Weld Counties, Colorado, to‑wit:

Township 1 North, Ranges 64‑70 West, 6th P.M.

All Sections

Township 2 North, Ranges 64‑69 West, 6th P.M.

All Sections

Township 2 North, Ranges 70 West, 6th P.M.

Sections 1-5 and 8-36

Township 3 North, Ranges 64‑68 West, 6th P.M.

All Sections

Township 3 North, Range 70 West, 6th P.M.

Sections 1, 12, 13, 21‑28, and 33‑36

Township 4 North, Ranges 64‑67 West, 6th P.M.

All sections, except SW1/4 Section 9, Township 4 North, Range 67 West

Township 4 North, Range 68 West, 6th P.M.

Sections 1‑3, 9‑16, 21‑29 and 32‑36

Township 4 North, Range 69 West, 6th P.M.

Sections 2‑11, 14‑22 and 27‑34

Township 5 North, Range 63 West, 6th P.M.

Sections 1‑20 and 30‑31

Township 5 North, Range 64 West, 6th P.M.

All Sections

Township 5 North, Range 65 West, 6th P.M.

Sections 2-36

Township 5 North, Range 66 West, 6th P.M.

Sections 1 and 2: S1/2, 3-36

Township 5 North, Range 68 West, 6th P.M.

Sections 1‑16, 23‑26 and 34‑36

Township 5 North, Range 67 West, 6th P.M.

All Sections

Township 5 North, Range 69 West, 6th P.M.

Sections 1‑4, 9‑16, 20‑23, 26‑29 and 31‑35

Township 6 North, Range 63 West, 6th P.M.

Sections 19‑36

Township 6 North, Range 64 West, 6th P.M.

All Sections

Township 6 North, Range 65 West, 6th P.M.

Sections 1‑18, 23‑26 and 31‑36

Township 6 North, Range 66 West, 6th P.M.

Sections 1‑14 Section 19: W1/2

Section 24: N1/2 Sections 30 and 31

Township 6 North, Ranges 67-68 West, 6th P.M.

All Sections

Township 6 North, Range 69 West, 6th P.M.

Sections 1‑4, 9‑16, 21‑28, and 33‑36

Township 1 South, Ranges 64‑67 West, 6th P.M.

All Sections

Township 1 South, Range 68 West, 6th P.M.

Section 2: SW1/4

Section 14: SE1/4

Section 15: E1/2 and NW1/4

Section 24: NW1/4

Township 1 South, Ranges 69‑70 West, 6th P.M.

All Sections

Township 2 South, Ranges 69‑70 West, 6th P.M.

All Sections

Rule 2. Eighty (80) acre drilling and spacing units shall be and the same is hereby established for the production of oil and/or gas from only the Codell Formation underlying the following described lands in Boulder and Weld Counties, Colorado, to‑wit:

Township 3 North, Range 69 West, 6th P.M.

All Sections

Township 5 North, Range 65 West, 6th P.M.

Section 1

Rule 3. Eighty (80) acre drilling and spacing units shall be and the same is hereby established for the production of oil and/or gas from only the Niobrara Formation underlying the following described lands in Larimer and Weld Counties, Colorado, to‑wit:

Township 5 North, Range 66 West, 6th P.M.

Sections 1 and 2: N1/2

Township 5 North, Range 68 West, 6th P.M.

Sections 17‑22: All

Rule 4. Said units and permitted well locations shall be in accordance with the provisions of Order No. 407‑1.

Rule 5. Dual completion and downhole commingling shall be allowed as to both oil and gas in the Codell and Niobrara Formations in wells drilled, or to be drilled in the area described above in Rule 1.

The Commission takes notice that subsequent orders to Order No. 407‑15 have allowed the segregation of specific 80‑acre drilling and spacing units into 40‑acre drilling and spacing units for production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.

IT IS FURTHER ORDERED, that the existing well locations, drilling and/or producing wells in the area described in Findings 5 and 6 herein, shall be the permitted well locations for the units upon which they are located.

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 , 1992, as of February 19, 1992.

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

Patricia C. Beaver, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203

April 2, 1992