IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD A RULES TO GOVERN OPERATIONS IN THE ARAPAHOE FIELD, CHEYENNE COUNTY, COLORADO Cause No. 449 Order No. 449-16

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 19, 1988 at 8:30 A.M. 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 granting an exception to the permitted well location as provided for by Order No. 449-6 for a well to be drilled in the spacing unit consisting of the N/2 NE/4 at a location in the center of the NW/4 NE/4 with a tolerance of 200 feet in any direction, Section 21, Township 14 South, Range 42 West, 6th P.M. after drilling and abandoning a well at the prescribed location in the NE/4 of Section 21.

FINDINGS

The Commission finds as follows:

1. Union Pacific Resources Company, as applicant herein, is an interested party in the subject matter of the above-referenced matter.

2. Due Notice of 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 the parties interested therein, and jurisdiction to promulgate the hereinafter order.

4. On March 21, 1988 the Commission authorized Order No. 449-6 to be issued which established 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow A' and B' Sand formations underlying Arapahoe Field in Cheyenne County, Colorado. The units shall consist of the E/2 and W/2 or the N/2 and S/2 of a governmental quarter section, with the unit designated by the operator of the first well drilled in the quarter section. The permitted well location shall be in the center of the NE/4 and the SW/14 of each quarter section with a tolerance of 200 feet in any direction.

5. On August 16, 1988, the Commission authorized Order No. 449-14 to be issued which established production practices and restrictions on wells producing from the Morrow A' and B' in Arapahoe Field, and restricted production amounts of exception well to fifty percent (50%) of the amounts for wells at the permitted locations.

6. Based on the facts stated in the verified application, no protests being filed, and having been heard by the Deputy Director as Hearing Officer on September 15, 1988, the Commission should enter an order granting an exception for a well to be drilled in the spacing unit consisting of the N/2 NE/4 at a location in the center of the NW/4 NE/4 with a tolerance of 200 feet in any direction, Section 21, Township 14 South, Range 42 West, 6th P.M., Arapahoe Field, Cheyenne County, Colorado for the production of oil and associated hydrocarbons from the Morrow A' and B' Sand formation. 7. Should a commercial well be completed at the above exception location, production from said well should be restricted to fifty percent (50%) that allowed at a well producing at a permitted location.

ORDER

NOW, THEREFORE IT IS ORDERED, that an exception to the permitted well location as provided for in Order No. 449-6 is hereby granted for a well to be drilled in the spacing unit consisting of the N/2 NE/4 Section 21 at a location in the center of the NW/4 NE/4 with a tolerance of 200 feet in any direction, Section 21, Township 14 South, Range 42 West, 6th P.M., Arapahoe Field, Cheyenne County, Colorado for the production of oil and associated hydrocarbons from the Morrow A' and B' Sand formations, and that production shall be restricted to fifty percent (50%) of the volumes allowed for a well at the permitted location.

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 rights, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

Entered this 20th day of September, 1988 as of September 19, 1988.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Dennis R. Bicknell, Secretary

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