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 verified application of TXO Production Corporation for an Order to amend Order No. 449-1 and provide for 40 acre drilling and spacing units for production of oil and associated hydrocarbons from the Morrow formation underlying lands described in said Order No. 449-1.

FINDINGS

The Commission finds as follows:

1. TXO Production Corporation, 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. On May 19, 1987, the Commission authorized Order No. 449-1 to be issued by which 80 acre drilling and spacing units were established for the production of oil and associated hydrocarbons from the Morrow formation underlying the following described lands in Cheyenne County, Colorado:

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

Section 21: All Section 27: All Section 22: All Section 28: All Section 23: All Section 33: All Section 26: All Section 34: All Section 35: All

5. Testimony at the time of hearing was insufficient to justify the reduction of the drilling and spacing units to 40 acres, therefore the application should be denied.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the application of TXO Production Corporation for an order to amend Order NO. 449-1 and reduce the 80 acre drilling and spacing units in the Arapahoe Field to 40 acres is hereby denied.

Entered this 29th

January day of / 1988, as of January 13, 1988.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary