REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 16, 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 Barrett Energy Co. for an order establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Wasatch formation underlying certain lands in Garfield County, Colorado.

FINDINGS

The Commission finds as follows:

1. Barrett Energy 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 verified application and exhibits submitted, and receiving no objections, and having been reviewed and recommended by the Director as Hearing Officer, the Commission should enter an order establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Wasatch formation underlying the following described lands in Garfield County, Colorado: Township 6 South, Range 95 West, 6th P.M. Sections 25, 26, 27, 28, 31, 32, 33, 34, 35 and 36 Township 7 South, Range 95 West, 6th P.M. Sections 1 thru 6

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 Wasatch formation 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 boundaries of the unit, with exceptions granted by the Director for topographic reasons upon adequate showing of inaccessibility. 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 Wasatch formation indicate that one well will efficiently and economically drain an area of approximately 160-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 Wasatch formation underlying certain lands in the Parachute Field, herein described, in addition to other applicable rule 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 Wasatch formation underlying the following described lands in Garfield County, Colorado, to-wit:

Township 6 South, Range 95 West, 6th P.M. Sections 25, 26, 27, 28, 31, 32, 33, 34, 35 and 36

Township 7 South, Range 95 West, 6th P.M. Sections 1 thru 6

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 boundaries of the unit, with exceptions granted by the Director for topographic reasons upon adequate showing of inaccessibility. 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.

ENTERED this 10th day of January 1986, as of December 16, 1985.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(440-1)