REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 23, 1991 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 J-W Operating Company, for an order to establish 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Niobrara formation, consisting of governmental quarter section, with the permitted well to be located no closer than 900 feet from the boundaries of the unit, with a tolerance of one hundred (100) feet in any direction for the below-listed lands, to-wit:

Township 4 North, Range 47 West, 6th P.M. Sections 22 and 23: All Sections 26 and 27: All Sections 34 and 35: All

FINDINGS

The Commission finds as follows:

1. J-W Operating 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. That in order to prevent the 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 ensure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be made establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Niobrara formation, a common source of supply, underlying the lands herein described with the units to consist of a governmental quarter section, with the permitted well to be located no

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closer than 900 feet from the boundaries of said unit, with a tolerance of 100 feet in any direction for the below-listed lands, to-wit:

Township 4 North, Range 47 West, 6th P.M. Sections 22 and 23: All Sections 26 and 27: All Sections 34 and 35: All

5. All available geologic and engineering data concerning said Niobrara formation indicates that one well will economically and efficiently drain an area of approximately 160-acres, and that drilling units the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one well producing from said Niobrara formation.

6. All wells drilled or permitted prior to the submittal of the application should be designated as the permitted well for the quarter section upon which said well is located.

7. Based on the facts stated in the verified application, no protests being filed, and having been heard by the Director as Hearing Officer on January 22, 1991, it is recommended that the application be approved. - 2 -(489-1)

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 Niobrara formation underlying the Buffalo Grass 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. One Hundred Sixty (160) acre drilling and spacing units shall be and the same are hereby established for the production from the Niobrara formation underlying the following described lands in the Buffalo Grass Field, Yuma County, Colorado, to-wit:

Township 4 North, Range 47 West, 6th P.M. Sections 22 and 23: All Sections 26 and 27: All Sections 34 and 35: All

Rule 2. Said drilling units shall consist of one hundred sixty (160) acres, and each such drilling unit shall consist of a governmental quarter section, with the well to be located no closer than 900 feet from the boundaries of the unit, with a tolerance of one hundred (100) feet in any direction.

Rule 3. All wells drilled or permitted prior to the submittal of the application are hereby designated as the permitted well for the quarter section upon which said well is located.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith as all interested parties present at the hearing 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 , 1991, as of January 23, 1991.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By

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Patricia C. Beaver, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 February 4, 1991 0916I

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