REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 20, 1990 at 9:00 a.m., in the 1st Floor Assembly Room, Weld County Building, 905 10th Street, Greeley, Colorado, after giving Notice of Hearing as required by law, on the verified application of Robert L. Bayless, Producer and Palo Production Corporation for an order establishing rules for the production of gas and associated hydrocarbons from the Frontier Formation underlying Deadman Field in Moffat County, Colorado.

FINDINGS

The Commission finds as follows:

1. That Robert L. Bayless and Palo Production 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 the Hearing Officer recommends that the application be approved as submitted with one change requiring wells to be 2400 feet apart rather than 2000 feet.

5. That no protest to the application have been received and that the applicant agrees to be bound by any verbal order of the Commission.

6. That the Frontier Formation underlying the below listed lands is a separate source of supply for the production of gas and associated hydrocarbons; that 640-acre drilling and spacing units should be established which consist of a governmental quarter section; that the permitted well should be located no closer than 1200 feet from the outer boundaries thereof and 2400 feet to any other well producing or capable of production from the same source of supply; and that the well #1 WECO-UPRC

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Kleitz 23-29 located in the NE/4 SW/4 of Section 29, Township 7 North, Range 92 West, 6th P.M. be designated as the permitted well for the unit comprised of said Section 29:

Township 7 North, Range 92 West, 6th P.M. Section 29: All Section 32: All Section 30: All

O R D E R

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or recompleted in the Frontier Formation underlying certain lands in the Deadman Field, herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. Six hundred forty (640) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the Frontier formation underlying the following described lands in Moffat county, Colorado, to-wit:

Township 7 North, Range 92 West, 6th P.M. Section 29: All Section 32: All Section 30: All - 2 -(480-1)

Rule 2. Each unit shall consist of 640-acres, more or less, and consist of a section of land, according to the governmental survey with the permitted well located no closer than 1200 feet from the section lines and no closer than 2400 feet to any other well producing or capable of production from the same source of supply.

Rule 3. The well #1 WECO-UPRC Kleitz 23-29 located in the NE/4 SW/4 of said Section 29 shall be the permitted well for the unit comprised of said Section 29.

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 ,

1990, as of April 20, 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

1211A

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