IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE CARETAKER FIELD, WELD COUNTY, COLORADO Cause No. 469 Order No. 469-3

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 16, 1990 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Fina Oil and Chemical Company for an order allowing a second well on each established 80-acre drilling and spacing unit for the production of oil and associated hydrocarbons from the "D" Sand formation underlying certain lands in Weld County, Colorado.

FINDINGS

The Commission finds as follows:

1. Fina Oil and Chemical 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 Commission entered Order No. 469-1 on February 16, 1990 establishing 80-acre drilling and spacing units with one well per unit for the production of oil and associated hydrocarbons from the "D" Sand formation. The findings and orders of Order No. 469-1 were affirmed by the Commission on May 21, 1990 in Order No. 469-2.

5. Based on the facts stated in the verified application, no protests being filed, and having been heard by the Director as Hearing Officer on July 11, 1990, the Commission should enter an order allowing a second well on each established 80-acre drilling and spacing unit for the production of oil and associated hydrocarbons from the "D" Sand formation which is a common source of supply of oil and associated hydrocarbons underlying the herein described lands:

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Township 7 North, Range 60 West, 6th P.M. Section 12: E/2

Township 7 North, Range 59 West, 6th P.M. Section 7: All

6. In order to prevent waste of oil and gas as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unnecessary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources, an order should be made authorizing a second well to be drilled on each established 80-acre drilling and spacing unit for the production of oil and associated hydrocarbons from the "D" Sand formation with the wells for each unit to be located in the center of both quarter-quarter sections with a tolerance of 200 feet in any direction, and that each well should be located a minimum of 1200 feet from any other producible or drilling oil and gas well in the same common source of supply.

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O R D E R

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the "D" Sand formation underlying the Caretaker Field herein described, in addition to other applicable rules and regulation and orders of the Commission, if any, heretofore adopted and not in conflict herewith.

Rule 1. Eighty (80) acres, more or less, drilling and spacing units shall be and the same are hereby established for the production of oil and associated hydrocarbons from the "D" Sand formation underlying the following described lands in the Caretaker Field, Weld County, Colorado, to-wit:

Township 7 North, Range 60 West, 6th P.M. Section 12: E/2

Township 7 North, Range 59 West, 6th P.M. Section 7: All

Rule 2. Said drilling units shall consist of 80-acres, more or less, and 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 wells for each unit shall be located in the center of the quarter quarter sections with a tolerance of 200 feet in any direction and that each well shall be located a minimum of 1200 feet from any other producible or drilling oil and gas well.

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 ,

1990, as of July 16, 1990.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Dennis R. Bicknell, Secretary

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Dated at Suite 380 1580 Logan Street Denver, Colorado 80203

0488I

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