REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 21, 1992 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 Freedom Energy, Inc., for an order pooling all interests in six 160-acre drilling and spacing units in Weld County, Colorado, for the development and operation of the "J" Sand, Codell, Niobrara, Sussex, and Shannon Formations for the production of oil, gas and associated hydrocarbons underlying said unit, pursuant to Colorado Revised Statutes, 34-60-116, as amended.

FINDINGS

The Commission finds as follows:

1. Freedom Energy, Inc., 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. On April 20, 1992, the Commission authorized Order Nos. 232-61, 407-92 and 493-8 to be issued which segregated the N1/2 of Section 11, Township 3 North, Range 64 West, 6th P.M. into two 160-acre drilling and spacing units for production from the "J" Sand Formation. In addition, the order established a 160-acre drilling and spacing unit consisting of the NE1/4 of said Section 11 and allowed the drilling of additional wells, not to exceed a total of f our, for production from the Codell, Niobrara, Sussex and Shannon Formations. Further, the downhole commingling of production from the five zones was authorized.

5. On April 20, 1992, the Commission authorized Order Nos. 232-63, 407-97 and 493-5 to be issued which segregated the N1/2 of Section 20, Township 3 North, Range 64 West, 6th P.M. into two 160-acre drilling and spacing units for production from the "J" Sand Formation. In addition, the order established a 160-acre drilling and spacing unit consisting of the NE1/4 of said Section 20 and allowed the drilling of additional wells, not to exceed a total of f our, for production from the Codell, Niobrara, Sussex and Shannon Formations. Further, the downhole commingling of production from the five zones was authorized.

6. On August 17, 1992, the Commission authorized Order Nos. 232-79, 407-113 and 493-15 to be issued which segregated the S1/2 of Section 20, Township 3 North, Range 64 West, 6th P.M. into two 160-acre drilling and spacing units for production from the "J" Sand Formation. In addition, the order established 160-acre drilling and spacing units consisting of the SE1/4 and the SW1/4 of said Section 20 and allowed the drilling of additional wells, not to exc eed a total of four, for production from the Codell, Niobrara, Sussex and Shannon Formations. Further, the downhole commingling of production from the five zones was authorized.

7. On April 20, 1992, corrected on April 26, 1992, the Commission authorized Order Nos. 232-64, 407-98 and 493-6 to be issued which segregated the N1/2 of Section 22, Township 3 North, Range 64 West, 6th P.M. into two 160-acre drilling and spacing units for production from the "J" Sand Formation. In addition, the order established a 160-acre drilling and spacing unit consisting of the NW1/4 of said Section 22 and allowed the drilling of additional well s, not to exceed a total of four, for production from the Codell, Niobrara, Sussex and Shannon Formations. Further, the downhole commingling of production from the five zones was authorized.

8. On April 20, 1992, corrected on April 26, 1992, the Commission authorized Order Nos. 232-65, 407-99 and 493-7 to be issued which segregated the N1/2 of Section 25, Township 3 North, Range 64 West, 6th P.M. into two 160-acre drilling and spacing units for production from the "J" Sand Formation. In addition, the order established a 160-acre drilling and spacing unit consisting of the NW1/4 of said Section 25 and allowed the drilling of additional well s, not to exceed a total of four, for production from the Codell, Niobrara, Sussex and Shannon Formations. Further, the downhole commingling of production from the five zones was authorized.

9. Unsuccessful efforts have been made to obtain the voluntary pooling of royalty interests in each 160-acre drilling and spacing unit consisting of the NE1/4 of Section 11, the NE1/4, SE1/4 and SW1/4 of Section 20, the NW1/4 of Section 22, and the NW1/4 of Section 25, all in Township 3 North, Range 64 West, 6th P.M.

11. Based on the facts stated in the verified application, receiving no protests, and having been heard by the Director as Hearing Officer on October 16, 1992, and recommended for approval, the Commission should enter an order pooling all interests in the above-described 160-acre drilling and spacing units, in order to insure proper and efficient development of the oil and gas from the "J" Sand, Codell, Niobrara, Sussex and Shannon Formations underlying said units.

12. At the time of administrative hearing the parties agreed to be bound by the verbal order of the Commission in this matter.

O R D E R

NOW, THEREFORE IT IS ORDERED, that,

1. Pursuant to the provisions of 34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act of the State of Colorado, all interests in the drilling and spacing units consisting of the NE1/4 of Section 11, the NE1/4, SE1/4 and SW1/4 of Section 20, the NW1/4 of Section 22, and the NW1/4 of Section 25, all in Township 3 North, Range 64 West, 6th P.M. are hereby pooled for the development of oil, gas and associated hydrocarbons from the "J" Sand, Co dell, Niobrara, Sussex and Shannon Formations underlying said unit.

2. The production obtained from said drilling units shall be allocated to each owner in the unit on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within said drilling unit; each owner of an interest in said drilling units shall be entitled to receive his share of the production of the well located on said drilling units applicable to his interest is said drilling units.

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 , 1992, as of October 19, 1992.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 October 29, 1992 ??