REPORT OF THE COMMISSION

TO ALL INTERESTED PARTIES 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 80203, after giving Notice of Hearing as required by law on the Commission's own motion as a result of Order No. 426-10 which continued the production restriction in the field and further ordered a hearing to be held at the March 1987 hearing date at which time, unless a unit agreement and unit operating agreement have been entered, the Commission would take such further action as it deems appropriate.

FINDINGS

The Commission finds as follows:

1. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

2. 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.

3. Testimony presented at the time of hearing indicates that progress toward Unitization is still being made, however there is still concern as to defining the limits of the reservoir, especially in the western part of the field which is essential to establishing the proper unit boundaries.

4. An additional period of time of 90 days should be given in order for the operators in the field to obtain sufficient data to delineate the boundaries of the unit area and finalize a unit agreement and unit operating agreement. In addition, a report on progress toward unitization should be given to the Director prior to the April 20, 1987 hearing date and to the Commission at the May 18, 1987 hearing date.

5. The production restrictions, as provided for in Order No. 426-9 (corrected) and No. 426-11, should remain in effect for the 90 day period and a hearing should be held on the June 1987 hearing date at which time, unless a Unit Agreement and Unit Operating Agreement have been finalized, the Commission should take such further action as it deems appropriate.

ORDER

NOW, THEREFORE IT IS ORDERED that Order No. 426-9 (corrected) and No. 426-11 providing for production restrictions on wells producing from the Morrow formation underlying lands in the Mt. Pearl Field, Cheyenne County, Colorado shall remain in effect.

IT IS FURTHER ORDERED. that a report on progress toward unitization shall be given to the Director prior to the April 20, 1987 hearing date and a report shall be given to the Commission at the May 18, 1987 hearing date and a hearing shall be held on June 15, 1987 and unless a Unit Agreement and Unit Operating Agreement have been entered by that time, the Commission shall take such further action as it deems appropriate. IT IS FURTHER ORDERED that the above orders shall become effective forthwith. IT IS FURTHER ORDERED that the Commission expressly reserves its right after notice and hearing to alter, amend or repeat any part of the above order. ENTERED this 1987, as of March 16 1987 day of

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(426-12)