REPORT OF THE COMMISSION

TO ALL INTERESTED PERSONS AND TO WHOM IT MAY CONCERN:

This cause came on for hearing before the Commission on January 16, 1987 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 verified application of Barrett Energy Company for an order, pursuant to 34-60-116 C.R.S. as amended, pooling all interests in the 160 acre drilling and spacing unit Consisting of the SE /4 Section 28, Township 6 South, Range 95 West, 6th P.M. for the operation and development of the gas and associated hydrocarbons from the Wasatch formation underlying said unit.

FINDINGS

The Commission finds as follows:

1. Barrett Energy Company 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 the notice of the aforesaid hearing, and of the parties interested therein, as well as jurisdiction to promulgate the hereinafter prescribed order.

4. On December 16, 1985, the Commission authorized Order No. 440-1 to be issued by which 160-acre drilling and spacing units were established for production of gas and associated hydrocarbons from the Wasatch formation underlying certain lands in Garfield County, Colorado. The units consist of a governmental quarter section with the permitted well located no closer than 600 feet to the boundaries of the unit. The SE /4 Section 28, Township 6 South, Range 95 West 6th P.M. has been designated as a drilling and spacing unit (Spacing Unit).

5. Effort has been made to obtain the voluntary pooling of all interests in said drilling unit for the operation and development thereof; however it has not been possible at this time to secure an agreement with the Department of Energy, owner of acreage in the unit consisting of the N /2 SE /4 of said Section 28.

6. An order by the Commission pooling all interests in the Spacing Unit has been applied for and is necessary in order to protect correlative rights and to afford each owner of an interest in the Spacing Unit the opportunity to recover and receive his just and equitable share of the oil and gas and associated hydrocarbons from the common source of supply underlying said unit.

7. Production obtained from the Spacing Unit should be allocated to each working interest owner therein on the basis of the proportion that the number of net mineral acres owned by each owner bears to the total number of mineral acres within said unit.

8. Applicant should submit to the Department of Energy within five (5) days of receipt of this Order, an operating agreement with an attached Authorization for Expenditure ("AFE") setting forth the costs of drilling the well as well as reasonable charges, terms and provision in the operating agreement. The Department of Energy should then be given ninety (90) days upon receipt to elect whether to participate in the well or not.

9. In the event an election to participate is not made within the time period, the Department of Energy should be deemed to have elected not to participate with result that it is a non-consenting owner subject to the provisions of 34-60-116(7) C.R.S. as amended.

10. The designated operator of the well to be drilled in the proposed location in the SW/4 SE/4 Section 28, Township 6 South, Range 95 West, 6th P.M. should be Barrett Energy Company.

ORDER

NOW THEREFORE IT IS ORDERED that: 1. Pursuant to the provisions of 34-60-116 C.R.S., as amended, of the Oil and Gas Conservation Act of the State of Colorado, all interests in the drilling and spacing unit consisting of the SE /4 Section 28, Township 6 South, Range 95 West, 6th P.M. Parachute Field, Garfield County, Colorado are hereby pooled for the operation and development of gas and associated hydrocarbons from the Wasatch formation underlying said unit.

2. The production obtained from the said unit shall be allocated to each mineral owner in the unit in proportion to the total number of mineral acres within said unit; each owner of an interest in the said unit shall be entitled to receive his share of the production of the well located in the unit applicable to his mineral ownership interest in said unit.

3. Applicant shall submit to the Department of Energy within five (5) days of receipt of this order, an operating agreement with an attached Authorization for Expenditure ("AFE") setting forth the costs of drilling the well including supervision, storage and future operation costs, as well as reasonable charges terms and provisions in the operating agreements.

4. The Department of Energy shall be given ninety (90) days upon receipt to elect whether to participate in the well or not. In the event an election to participate is not made within the time period, the Department of Energy shall be deemed to have elected not to participate and therefore shall be a non-consenting owner subject to the provisions of 34-60-116 (7) C.R.S., as amended.

5. The designated operator of the well to be drilled at the proposed location of the SW /4 SE /4 Section 28, Township 6 South, Range 95 West, 6th P.M. for the purpose of the pooling order shall be the applicant, Barrett Energy Company.

2 --(440-6)

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 6th day of February, y 1987, as of January 16, 1987.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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(440-6)