REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 18, 1985 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 Champlin Petroleum Co. for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow formation underlying certain lands in Cheyenne County, Colorado.

FINDINGS

The Commission finds as follows:

1. Champlin Petroleum 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. Based upon the facts stated in the application and the exhibits submitted which were verified at the time of hearing and receiving no objections, the Commission should, according to 34-60-108 (7), C.R.S. 1973, as amended, enter an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow formation underlying the following described lands in Cheyenne County, Colorado, to-wit:

Township 13 South, Range 48 West, 6th P.M. Sections 25 thru 27 and 34 thru 36: All Township 14 South, Range 48 West, 6th P.M. Sections 1 thru 3: All

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 in the State, an order should be made establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow formation, 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, with the permitted well located in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 200 feet in any direction.

ORDER

NOW, THEREFORE, IT IS ORDERED that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the Morrow formation underlying the Mount Pearl 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 Morrow formation underlying, the following described lands in the Mount Pearl Field, Cheyenne County Colorado, to-wit:

Township 13 South, Range 48 West, 6th P.M. Sections 25 thru 27 and 34 thru 36: All Township 14 South, Range 48 West, 6th P.M. Sections 1 thru 3: All

Rule 2. Said drilling units shall consist of 80-acres, more or less, and shall consist of the E/2 and W/2 and N/2 and S/2 of each quarter section according to the governmental survey with the option of the operator drilling the first well in the quarter section to designate the unit. The permitted well shall be located in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 200 feet in any direction. Exceptions to the permitted well location may be granted by the Director, without further hearing, provided waivers or consents in writing are received from offset owners towards which the location would be moved.

IT IS FURTHER ORDERED, that the provisions contained in thee 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 February 1985, as of February 18, 1985. OIL AND GAS CONSERVATION

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary