REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 16, 1996, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the application of Amoco Production Company for an order to allow the UPRR 62 Pan Am A No. 1 Well, originally drilled for production of gas from the "J" Sand Formation and deepened to the Dakota Formation, to be produced from the Dakota Formation as an a dditional well for the 320-acre drilling and spacing unit consisting of the S1/2 of Section 27, Township 2 North, Range 65 West, 6th P.M.

FINDINGS

The Commission finds as follows:

1. Amoco Production Company. as applicant herein, is an interested parties 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. In Order No. 499-1, the Commission established 320-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Dakota Formation in certain lands, with the 320-acre drilling and spacing units to be identical to those previously established for the "J" Sand Formation under Cause No. 232, with the permitted wells to be located in the NW1/4 and the SE1/4 of the section and no closer than 990 feet from the boundarie s of the quarter section, including Section 27, Township 2 North, Range 65 West, 6th P.M.

5. This matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing that 320-acres is not less than the area that could be efficiently and economically drained by one well and that waste would occur if an additional well was not allowed to be produced on the 320-acre unit.

6. Based on the facts stated in the application, having received no protests to the application, and having been heard by the Hearing Officer who recommends approval, the Commission should enter an order allowing the UPRR 62 Pan Am A No. 1 Well, originally drilled for production of gas from the "J" Sand Formation and deepened to the Dakota Formation, to be produced from the Dakota Formation as an additional well for the 320-acre drilling and spacing uni t consisting of the S1/2 of Section 27, Township 2 North, Range 65 West, 6th P.M.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the UPRR 62 Pan Am A No. 1 Well, originally drilled for production of gas from the "J" Sand Formation and deepened to the Dakota Formation, shall be approved for production from the Dakota Formation as an additional well for the 320-acre drilling and spacing unit consisting of the S1/2 of Section 27, Township 2 North, Range 65 West, 6th P.M.

IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

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 November, 1996, as of October 16, 1996.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary Dated at Suite 801 1120 Lincoln Street Denver, Colorado 80203 March 25, 1997 ??