REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 15, 1992 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax Avenue, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Charter Production Company, for an order to establish 80-acre drilling and spacing units for production from the Marmaton Formation for certain lands in Cheyenne County, Colorado.

FINDINGS

The Commission finds as follows:

1. Charter Production 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 evidence presented to the Hearing Officer indicates that the Marmaton Formation constitutes a common source of supply of oil, gas and associated hydrocarbons underlying the following described lands in Cheyenne County, Colorado to-wit:

Township 14 South, Range 49 West, 6th P.M. Section 11: S1/2, NE1/4 Section 12: NW1/4

5. 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 insure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be made establishing 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Marmaton Formation, und erlying the lands defined herein; that said units should be 80-acres, more or less, and consisting of the E1/2 and W1/2 of each quarter section according to the governmental survey thereof, with the permitted well to be located in the center of the SE1/4 and the NW1/4 of each quarter section, with a tolerance of 200 feet in any direction. The Rhoades No. 1 Well located in the SE1/4 NE1/4 of Section 11, Township 14 South, Range 49 West, 6th P.M. should be the designated well for the 80-acre drilling and spacing unit consisting of the E1/2 NE1/4 of said Section 11 for the Marmaton Formation.

6. That no protests to the spacing application were received and the Hearing Officer recommends that the application be approved.

O R D E R

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

Rule 1: Eighty (80) acre drilling and spacing units shall be and the same are hereby established for production of oil, gas and associated hydrocarbons from the Marmaton Formation underlying the following described lands in the Sorrento Field, Cheyenne County, Colorado, to-wit:

Township 14 South, Range 49 West, 6th P.M. Section 11: S1/2, NE1/4 Section 12: NW1/4

Rule 2: Said drilling units shall consist of eighty (80) acres, consisting of E1/2 and the W1/2 of each quarter section according to the governmental section. Said units shall be designated by the operator of the first well drilled in each quarter section and the permitted well for each unit should be located in the SE1/4 and the NW1/4 of each quarter section with a tolerance of 200 feet in any direction.

Rule 3: The Rhoades No. 1 Well located in the SE1/4 NE1/4 of Section 11, Township 14 South, Range 49 West, 6th P.M. is hereby designated as the well for the 80-acre drilling and spacing unit consisting of the E1/2 NE1/4 of said Section 11, for the Marmaton Formation.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith as all 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 , 1992, as of June 15, 1992.

CORRECTED this day of , 1992, as of June 15, 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 1, 1992 ??

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