REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 19, 1988, at 8:30 Kkktt in Room 101, Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Union Pacific Resources Company for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow Sandstone formations underlying certain lands previously spaced in Cause No. 442 and additional lands.

FINDINGS

The Commission finds as follows:

1. Union Pacific Resources, as application 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. At the Commission hearing on September 19, 1988 the Commission authorized Order No. 463-1 to be issued which established 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow Sandstone formation underlying certain lands previously spaced under Order No. 442-1 and 2 on 40-acre drilling and spacing units.

5. The Deputy Director as Hearing Officer heard the matter at an administrative hearing and recommended to the Commission that all applicable spacing units and well location requirements to any of the below described lands that are under Order NO. 442-1 should be superseded by Order No. 463-1.

Township 16 South, Range 41 West, 6th rrrtt Section 7, 18 and 19: All Township 16 South, Range 42 West, 6th rrrtt Section 12, 13 and 24: All Remuda Corporation, at the administrative hearing, presented a letter requesting the existing 40-acre spacing under Order No. 442-1 be retained No protests were filed.

6. In Order No. 463-1, the Commission further ordered that the above lands be removed from the spacing and drilling unit requirements of Order No. 442-1 and 2, and that Order No. 442-1 and 2 be amended to reflect the removal.

ORDER

NOW THEREFORE IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or re-completed in the Morrow formation underlying certain lands in the Stockholm Field, Cheyenne County, Colorado, 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. Forty (40) acre drilling and spacing units shall be and the same are hereby established for the production of oil and associated hydrocarbons from the Morrow formation underlying the following described lands in Cheyenne County, Colorado, to-wit: Township 16 South, Range 41 West, 6th rrrtt Section 8: All except Lots 5 and 6 (ada. S/2) Sections 17 and 20: All

Rule 2. The units shall consist of 40-acres, more or less, and consist of a governmental quarter-quarter section. The permitted well shall be at a location no closer than 330 feet to the boundaries of the quarter-quarter section.

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 September 1988 as of September 19, 1988.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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