REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 13, 1988 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 Mull Drilling Company, Inc., et al for an order for all wells, located in the spaced area as established by Order No. 449-1, producing gas from the Morrow formation be restricted from production which have a solution gas-oil ratio of 200 to 250 MCF gas per barrel of oil or more.

FINDINGS

The Commission finds as follows:

1. Mull Drilling Company, Inc., et al as applicant herein, is an interested party in the subject matter of the above-entitled 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. By Order No. 449-1, 80 acre drilling and spacing units were established for the production of oil and associated hydrocarbons from the Morrow formations underlying the following described lands in Cheyenne County, Colorado: Township 14 South, Range 42 West, 6th P.M.

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5. Testimony was taken concerning operations in the Arapahoe Field which included other requests by TXO Production Corp. for an exception location, and reduced spacing. Following such testimony it was determined that the application for reduced spacing be denied and the request for the exception location and the request by Mull Drilling Company for production restriction be continued to the February 1988 hearing date.

6. In the interim, a restriction of the gas leaving a lease at 100 MCF per day, based on a monthly average, for each well producing from the Morrow formation and located in the area described in Finding 4 herein should be established.

7. Such gas should be measured by an orifice and recording meter installed on the line where the gas leaves the lease. The restriction to commence January 14, 1988 and remain in effect until the hearing on February 12, 1988.

ORDER

NOW THEREFORE, IT IS ORDERED, that the following rules shall apply to wells producing from the Morrow formation and located i the following described lands in the Arapahoe Field, Cheyenne County, Colorado:

Township 14 South, Range 42 West, 6th P.M.

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Section 27: All

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Section 26: All

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Rule 1. Commencing January 14, 1988, the maximum allowable of gas leaving a lease for each well shall be 100 MCF per day, based on a monthly average.

Rule 2. Such gas shall be measured by an orifice and recording meter installed on the line where such gas leaves the lease.

IT IS FURTHER ORDERED that, the restriction shall remain in effect until the hearing scheduled for February 12, 1988 at which time further testimony will be taken concerning the application of Mull Drilling Company and the application of TXO Production Corporation for an exception location in the Arapahoe Field.

IT IS FURTHER ORDERED, that the above orders shall become effective forthwith. Entered this 29th day of January 1988, as of January 13, 1988. '

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary