IN THE MATTER Of THE PROMULGATION AND ESTABLISHMENT Of FIELD RULES TO GOVERN OPERATIONS IN THE CHANNING FIELD, PROWERS COUNTY, COLORADO Cause No. 424 Order No. 424-3

REPORT OF THE COMMISSION

TO ALL INTERESTED PERSONS AND TO WHOM IT MAY CONCERN:

This cause came on for hearing before the Commission on March 16, 1987 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 application of Murfin Drilling company, for an order extending the spaced area of the Channing Field as established by Order No. 424-1 by the addition of certain lands in Prowets County, Colorado.

FINDINGS

The Commission finds as follows:

1. Muffin Drilling 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 the notice of the aforesaid hearing, and of the parties interested therein, as well as jurisdiction to promulgate the hereinafter prescribed order.

4. On January 21, 1985, the Commission authorized Order No. 424-1 to be issued by which 640-acre drilling and spacing units were established for the production of gas and associated hydrocarbons from the Middle Morrow Sandstone (McClave Sandstone) underlying certain lands in Prowets County, Colorado. The units consist of 640-acres more or less and consist of a governmental section with the permitted well located no closer than 990 feet from the boundaries of the section. The spaced area was extended by Order No. 424-2.

5. Based on the facts stated in the verified application and exhibits submitted, and having received no objections, and having been heard by the Director as Hearing Officer on March 13, 1987, the Commission should enter an Order extending the spaced area of the Channing Field by the addition of the following described lands in Prowers County, Colorado.

Township 21 South, Range 46 West, 6th P.M. Section 19: All Section 30: All Section 29: All Section 31: All

6. The permitted well for the additional units as described in Finding 5 herein should be at a location no closer than 600 feet from the boundaries of the unit.

ORDER

NOW THEREFORE IT IS ORDERED that Order Nos. 424-1 and 424-2 are hereby amended and the lands described in Finding 5 herein shall be subjected to the provisions of Order No. 424-1, except that the permitted well location for said area shall be at a location no closer than 990 feet from the boundaries of the unit. The spaced area of the Channing Field shall henceforth consist of the following described lands in Prowets County, Colorado:

Township 21 South, Range 46 West, 6th P.M. Section 19: All Sections 29 thru 34: All Township 22 South, Range 46 West, 6th P.M. Sections 2 thru 5: All Sections 9 thru 11: All

IT IS FURTHER ORDERED that the Commission expressly reserves the right, after notice of hearing, to alter, amend, or repeal any part or all of the above order.

ENTERED this 31rd day of May 1988, corrected as of May 16, 1988.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary