REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 17, 1984 at 9:00 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of St. Michael Exploration Co., for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Codell and Niobrara formations underlying certain lands in Weld County, Colorado.

FINDINGS

The Commission finds as follows:

1. St. Michael Exploration Co., 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. Evidence presented at the hearing indicates that the Codell and Niobrara formations each constitutes a common source of supply of oil and associated hydrocarbons underlying the following described lands in Weld County, Colorado, to-wit:

Township 6 North, Range 65 West, 6th P.M. Sections 19, 20, 21, 22, 27, 28, 29 and 30 5. In order to prevent waste of oil and gas, as defined by law; to protect the correlative rights of all parties concerned;to prevent the drilling of unnecessary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources, an order should be made establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Codell and Niobrara formations, each a common source of supply underlying the lands defined herein; that said units should be 80-acres, more or less, and consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section, according to the governmental survey. Only one well should be permitted to be drilled on each unit and produced from the common source of supply. The permitted well for each unit should be located in the center of the SE/4 and NW/4 of each quarter section with a tolerance of 200 feet in any direction and the existing producing or producible wells or permitted locations should be considered the permitted wells for the units upon which they are located.

6. All available geological and engineering data concerning said Codell and Niobrara formations indicate that one well will efficiently and economically drain an area of approximately 80-acres, and that the drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently and economically drained by one well producing from said Codell and Niobrara formations.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the Codell and Niobrara formations underlying the Greeley Field herein described, 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 associated hydrocarbons from the Codell and Niobrara formations underlying the following described lands in the Greeley Field, Weld County, Colorado, to-wit:

Township 6 North, Range 65 West, 6th P.M. Sections 19, 20, 21, 22, 27, 28, 29 and 30

Rule 2. Said drilling units shall consist of 80-acres, more or less and consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section according to the governmental survey and shall be designated by the operator drilling the first well on the quarter section, and the permitted well for each unit shall be located in the center of the SE/4 and NW/4 of each quarter section with a tolerance of 200 feet in any direction, and the existing producing or producible wells or permitted locations should be considered the permitted wells 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. 12th ENTERED this day of 1984, as of February 17, 1984.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary -- 2 --(410-1)