REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 21, 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 Cockrell Oil Corporation for an order authorizing the drilling of a second well for the drilling and spacing unit consisting of the N/2 of Section 9, Township 6 North, Range 91 West, 6th P.M.

FINDINGS

The Commission finds as follows:

1. That Cockrell Oil Corporation, as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

2. That due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

3. That 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. That on November 20, 1989 the Commission entered Order No. 474-1 which established 320-acre drilling and spacing units for the production of methane gas and associated hydrocarbons from the Mesaverde coalseams underlying the Craig Field, Moffat County, Colorado, and that the permitted well for each such drilling unit shall be located no closer than 600 feet from the outer boundary of such a unit.

5. That a well Eberle #1 has been drilled at a location 1650 feet FNL and 1650 feet FEL of said Section 9 and has been completed in the Mesaverde coalseams and that attempts are being made to establish commercial gas production, and that the Mesaverde Sand found in the Eberle #1 may be productive of gas which could be used in an experimental gas lift operation associated with dewatering of the coalseams in the requested well Eberle #2 and the Eberle #1, provided the Mesaverde Sand is found in the Eberle #2.

6. That all zones and formations for the drilling and

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spacing unit consisting of the N/2 of said Section 9 have been voluntarily pooled or unitized.

7. That the matter has been heard by the Hearing Officer who recommends that the application be granted to drill a second well Eberle #2 at a location 1980 feet FNL and 1980 FWL of said Section 9 where an experimental gas lift process will be attempted to use gas lift for dewatering of the Mesaverde coalseams.

8. That no protest to the application was received.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that a well, Eberle #2 may be drilled at a location 1980 feet FNL and 1980 feet FWL of Section 9, Township 6 North, Range 91 West, 6th P.M. as a second well on the drilling and spacing unit consisting of the N/2 of said Section 9 and completion can be attempted.

IT IS FURTHER ORDERED, that gas from the Mesaverde Sand formation found in the Eberle #1 and anticipated to be produced in the Eberle #2 may be used in an experimental gas lift process to increase the dewatering rate at both the Eberle #1 and Eberle #2.

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IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith as all parties agreed to accept the verbal order of the Commission.

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 May 21, 1990.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Dennis R. Bicknell, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203

1241A

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