FINDINGS

The Commission finds as follows:

1. Gerrity Oil and Gas Corporation 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 Codell and Niobrara Formations of Cretaceous Age, are a common source of supply and have been defined and determined by drilling to be productive underlying the following described lands in Weld County, Colorado:

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

Section 16: All

5. The terms and conditions provided by the Unit Agreement meet the requirements of the statute and are just and reasonable to all interests contained within said unit area. The plan for unit operations as presented by the Applicant, providing for the conduct of operations to recover oil and gas is necessary to increase the ultimate recovery and the value of the estimated additional cost incident to conducting such operations.

6. The provisions contained in said Unit Agreement are just and reasonable and include the following:

a. The description of the pool to be so operated;

b. The nature of said operation;

c. The allocation to the separately owned tracts in the Patriot Unit Area of all the oil and gas that is produced from said Unit Area and is saved;

d. The provisions for the credits and charges to be made in the adjustments among the owners in the Patriot Unit Area for their respective investments in wells, tanks, pumps, machinery, materials and equipment contributed to the unit operations;

e. The provision providing how the cost of unit operations, including capital investments, shall be determined and charged to the separately owned tracts, and how said costs shall be paid, including the provision providing when, how, and by whom the unit production allocated to an owner who does not pay the share of the cost of unit operations charged to such owners, may be sold and the proceeds applied to the payment of such costs;

f. The provision for the supervision and conduct of the unit operations, in respect to which each person shall have a vote with a value corresponding to the percentage of the cost of unit operations chargeable against the interest of such person; and

g. The time when the unit operations shall commence, and the manner in which, and the circumstances under which the unit operations shall terminate.

7. The spacing provisions as established by orders in Cause No. 407 as they pertain to the Codell and Niobrara Formations underlying lands described in Finding 4 herein above, should be rescinded upon approval of the plan for unit operations by the Commission, and notice from the Unit Operator that unit operations have commenced.

8. The unit agreement should become effective upon the written approval of those persons required to pay at least eighty (80%) percent of the cost of the unit operations, and by the owners of at least eighty (80%) percent of the production proceeds.

9. No protests were received and this matter was heard by the Hearing Officer who recommends the application be approved as submitted.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that:

1. The Unit Agreement covering the Codell and Niobrara Formations of Cretaceous Age underlying lands in the Codell-Niobrara Spaced Area is hereby approved as being in the public interest for conservation.

2. Said Codell and Niobrara Formation reservoir is a common source of supply and underlies the lands described in Finding 4 herein above, and such area shall hereafter be known as the Patriot Unit Area.

3. The conduct of operations for the recovery of oil and gas from the Codell and Niobrara Formation underlying said Unit Area is hereby approved as being necessary to increase the ultimate recovery from such reservoir and to prevent waste.

4. The spacing provisions as established by orders in Cause No. 407 as they pertain to the lands in the Codell-Niobrara Spaced Area described herein above, are hereby rescinded.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective upon the written approval of those persons required to pay at least eighty (80%) percent of the cost of the unit operations, and by the owners of at least eighty (80%) percent of the production proceeds.

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 March 16, 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 8, 1992

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