REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 20, 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 Roundup Resources, Inc. for an order establishing 160-acre drilling and spacing units for the production Of gas and associated hydrocarbons from the Mesaverde formation (including the Cozzette-Corcoran Sandstones) underlying certain lands in Mesa County, Colorado.

FINDINGS

The Commission finds as follows:

1. Roundup Resources, Inc., 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 verified application and exhibits submitted, and receiving no objections, and having been reviewed and recommended by the Director, the Commission should enter an order establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde formation (including the Cozzette-Corcoran Sandstones) underlying the following described lands in Mesa County, Colorado:

Township 9 South, Range 94 West, 6th P.M. Section 1: All Section 2: All Section 11: All Section 12: All Section 13. All Section 14: All

5. In order to prevent the waste of oil and gas, as defined by law, to protect 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 of the State, an order should be made establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde formation (including the Cozzette-Corcoran Sandstones) underlying the lands described herein. Each unit should consist of 160-acres, more or less, and consist of a quarter section of land, according to the governmental survey with the permitted well located no closer than 600 feet from the quarter section lines. Wells presently producing or producible, or permitted within the proposed area should be designated the permitted well for the unit upon which they are located.

6. All available geological and engineering data concerning said Mesaverde formation (including the Cozzette-Corcoran Sandstones) indicate that one well will efficiently and economically drain an area of approximately 640-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 formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed or recompleted in the Mesaverde formation (including the Cozzette-Corcoran Sandstones) underlying certain lands in the Brush Creek 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. One hundred sixty (160) acre drilling and spacing units shall be and the same are hereby established for the Production of gas and associated hydrocarbons from the Mesaverde formation (including the Cozzette-Corcoran Sandstones) underlying the following described lands in Mesa County, Colorado, to-wit:

Township 9 South, Range 94 West, 6th P.M. Section 1: All Section 2: All Section 11: All Section 12: All Section 13: All Section 14: All Rule 2. Each unit shall consist of 160-acres, more or less, and consist of a quarter section of land, according to the governmental survey with the permitted well located no closer than 600 feet from the quarter section lines. wells presently producing or producible, or permitted within the proposed area should be designated the permitted well for the unit 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. ENTERED this 30th day of May 1985, as of May 20, 1985.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary (429-1)