IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE HIAWATHA FIELD, MOFFAT COUNTY, COLORADO Cause No. 454 Order No. 454-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 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 application of Wexpro Company, for an order approving a certain Unit Agreement and for the Hiawatha Middle Oil Sand Unit Area (Wasatch), providing for unit operations of the reservoir consisting of the Middle Sand (Wasatch) underlying certain lands in the Hiawatha Field, Moffat County, Colorado. No unit operating agreement is necessary since Applicant is 100% working interest owner.

FINDINGS

The Commission finds as follows:

1. Wexpro 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 said Notice, and of the parties interested therein, .and jurisdiction to promulgate the hereinafter prescribed order.

4. The Middle Oil Sand (Wasatch) was encountered in the interval between the depths of 2285 feet to 2345 feet in Well No. 13 F. Wilson, located in the NW/4 NE/4 Section 23, Township 12 North, Range 100 West, 6th P.M. Said Middle Sand, as so encountered, is a common source of supply and has been defined and determined by drilling, to be productive underlying the following described lands in Moffat County, Colorado, to-wit:

Township 12 North, Range 100 West, 6th P.M. Section 14: Lots 6 and 7 Section 22: SE/4 NW/4, NE/4 SW/4, S/2 NE/4, N/2 SE/4 Section 23: SW/4 NW/4, E/2 NW/4, N/2 SW/4, W/2 NE/4 Containing 600 acres, more or less

5. The terms and conditions provided by the Unit Agreement meet the requirements of the statute in accordance with 34-60-118 C.R.S., as amended, and are just and reasonable to all interests contained within said unit area. The plan for unit operations as presented by the Applicant, providing for a secondary recovery program by the injection of water into the Middle Oil Sand (Wasatch) reservoir underlying the Hiawatha Middle Oil Sand Unit Area (Wasatch), as described herein is necessary to increase the ultimate recovery of oil and gas and the value of the estimated additional recovery of oil and gas exceeds the estimated additional cost incident to conducting such operations.

ORDER

NOW, THEREFORE IT IS ORDERED,

1. The Unit Agreement covering lands in the Hiawatha Middle Oil Sand (Wasatch) Unit Area, which agreements are attached to; and made a part of the original order of this Commission on file in the office of the Commission, is approved as being in the public interest for conservation.

2. The Middle Sand (Wasatch) reservoir, common source of supply, underlies the following lands in Moffat County, Colorado, to-wit:

Township 12 North, Range 100 West, 6th P.M.

Section 14: Lots 6 and 7 Section 22: SE/4 NW/4, NE/4 SW/4, S/2 NE/4, N/2 SE/4 Section 23: SW/4 NW/4, E/2 NW/4, N/2 SW/4, W/2 NE/4

Containing 600 acres, more or less

3. The provisions contained in said Unit Agreement as they pertain to 34-60-118 of the Oil and Gas Conservation Act are just and reasonable, and are incorporated herein as the Commission's plan of unit operations for such lands.

4. The secondary recovery project by the injection of water into the said Middle Sand reservoir of the Hiawatha Middle Oil Sand (Wasatch) Unit Area, as presented by applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject into said reservoir through injection wells in such quantities as shall be reasonably determined by the operator to best achieve the maximum recovery of oil without waste.

5. In the event that it becomes necessary in the future to convert additional producing wells to input wells; to plug and abandon certain wells in the Unit Area, or to drill additional producing or input wells as dictated by developments in the course of the operations of the waterflood, the Unit Operator is authorized to make such changes in the operation of the project as may be required to facilitate the efficient development thereof.

6. All injection wells shall be approved by the Director in accordance with the rules and regulations of the Commission.

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 day of 1987, as of November 16, 1987.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(454-1)