REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 18, 1993 at 8:30 a.m., in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Barrett Resources Corporation, filed on behalf of Barrett Resources Corporation, VECO Drilling, Inc., Alarado Resources Limited, Delbarco Partnership, Zenith Drilling Corporation, Yates Drilling Company, ABO Petro leum Corporation, and MYCO Industries, Inc., for an order to amend Order No. 440-12 and designate the Mesaverde Formation into four common sources of supply and establish 320-acre drilling and spacing units for production from the Upper Mesaverde, Upper Cozzette, Lower Cozzette, and Corcoran Formations consisting of the E1/2 and the W1/2 of Section 1, Township 7 South, Range 95 West, 6th P.M. and further to allow a fourth well to be drilled in the W1/2 of said Section 1 as a horizontal well.

FINDINGS

The Commission finds as follows:

1. Barrett Resources Corporation, 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. On April 19, 1990, the Commission entered Order No. 440-12, corrected November, 1990, which established 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde Formation. A third well was authorized to be drilled for each governmental section no closer than 600 feet from the boundaries of said unit and no closer than 1200 feet from any well producing or producible from the same formation. Included within the lands established by Order No. 440-12 was Section 1, Township 7 South, Range 95 West, 6th P.M.

5. That evidence presented at the administrative hearing indicates that the Upper Mesaverde, Upper Cozzette, Lower Cozzette, and Corcoran Formations constitute a common source of supply for the following described lands in Garfield County, Colorado to-wit:

Township 7 South, Range 95 West, 6th P.M. Section 1: All

6. That the stratigraphic equivalent for the four intervals is found in the Dual Induction log for the DOE/CER MWX No. 1 Well, located in the NW1/4 of Section 34, Township 6 South, Range 94 West, 6th P.M. and defined as follows:

Upper Mesaverde 3862 feet to 7666 feet Upper Cozzette 7830 feet to 7895 feet Lower Cozzette 7949 feet to 7996 feet Corcoran 8110 feet to 8270 feet

7. That the below-listed three wells have been drilled and are now producing from the Mesaverde Formation in said Section 1:

Well No. GV 83-1 1500 feet FNL and 1320 feet FEL Well No. GV 84-1 660 feet FWL and 2180 feet FSL Well No. GV 88-1 1100 feet FSL and 1450 feet FEL

8. That 320-acre drilling and spacing units should be established for production from the Upper Mesaverde, Upper Cozzette, Lower Cozzette and Corcoran Formations consisting of the E1/2 and the W1/2 of said Section 1.

9. That a fourth well should be authorized to be drilled as a highly deviated well in the NW1/4 of said Section 1 for production from the Upper Cozzette Formation at a location no closer than 600 feet from the boundaries of the quarter section and no closer than 1200 feet from any other well producing from the same formation.

10. Based on the facts stated in the verified application, receiving no protests, and having been heard by the Hearing Officer on June 16, 1993 and recommended for approval, the Commission should approve the application as submitted.

ORDER

NOW, THEREFORE IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well or wells drilled, completed or recompleted in the Upper Mesaverde, Upper Cozzette, Lower Cozzette, and Corcoran Formations, described herein below, in addition to other applicable rules and regulations and policies and orders of the Commission, if any, heretofore adopted and not in conflict herein:

Rule 1. That evidence presented at the administrative hearing indicates that the Upper Mesaverde, Upper Cozzette, Lower Cozzette, and Corcoran Formations constitute common sources of supply of gas and associated hydrocarbons underlying the following described lands in Garfield County, Colorado, to-wit:

Township 7 South, Range 95 West, 6th P.M. Section 1: All

Rule 2. That the stratigraphic equivalent for the four intervals is found in the Dual Induction log for the DOE/CER MWX No. 1 Well, located in the NW1/4 of Section 34, Township 6 South, Range 94 West, 6th P.M. and shall be defined as follows:

Upper Mesaverde 3862 feet to 7666 feet Upper Cozzette 7830 feet to 7895 feet Lower Cozzette 7949 feet to 7996 feet Corcoran 8110 feet to 8270 feet

Rule 3. That 320-acre drilling and spacing units, consisting of the E1/2 and the W1/2 of said Section 1, shall be established for production from the Upper Mesaverde, Upper Cozzette, Lower Cozzette and Corcoran Formations.

Rule 4. That three wells, as authorized by Order No. 440-12, are located as listed below and producing from the Mesaverde Formation,and that a fourth well is authorized to be drilled as a highly deviated borehole at a surface location in the NW1/4 of said Section 1, with the Upper Cozzette as the objective formation, or any of the other three zones established by this order, at a location no closer than 600 feet from the boundaries of the quarter sectio n and no closer than 1200 feet from any other well producing from the same formation:

Well GV 83-1 1500 feet FNL and 1320 feet FEL Well GV 84-1 660 feet FWL and 2180 feet FSL Well GV 88-1 1100 feet FWL and 1450 feet FEL

IT IS FURTHER ORDER, 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 day of , 1993 as of June 18, 1993.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 June 23, 1993

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(440#13)