REPORT OF THE COMMISSION

This cause same on for hearing before the Commission on December 20, 1993 at 8:30 a.m., in the Boettcher Auditorium, Colorado History Museum, 1300 Broadway, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Chandler & Associates, Inc., for an order establishing the N1/2 of Section 9, Township 1 South, Range 102 West, 6th P.M., as a 320-acre drilling and spacing unit for the production of gas and associate d hydrocarbons from the Mancos "A" Formation.

FINDINGS

The Commission finds as follows:

1. Chandler & Associates, Inc., as applicant herein, is an interested party in the subject matter of the above-referenced matter.

2. 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 evidence presented at the hearing indicates that the Mancos "A" Formation constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Rio Blanco County, Colorado, to-wit:

Township 1 South, Range 102 West, 6th P.M. Section 9: N1/2

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 a 320-acre drilling and spacing unit for the production of gas and associated hydrocarbons from the Mancos "A" Formation, a co mmon source of supply underlying the lands defined herein; that said unit should consist of the N1/2 of the quarter section, according to the governmental survey thereof.

6. That the available geological and engineering data concerning said Mancos "A" Formation indicates that one well will efficiently and economically drain an area of approximately 320-acres, and that drilling units to the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one well producing from said Mancos "A" Formation.

7. That the SW Rangely Federal No. 5-9-1-2 Well located in the SW1/4 NW1/4 of Section 9, Township 1 South, Range 102 West, 6th P.M., producing from the Mancos "A" and Mancos "B" Formations should be shut in for production from the Mancos "A" Formation.

8. That the SW Rangely Federal No. 3-9-1-2 Well located 703 feet FNL and 1912 feet FWL in the NE1/4 NW1/4 of said Section 9, completed in and capable of production from the Mancos "A" Formation, should be the permitted well for the unit.

9. Based on the facts stated in the verified application, having received no protests, and having been heard by the Hearing Officers who recommended approval of the application, the Commission should approve the request and establish the N1/2 of Section 9, Township 1 South, Range 102 West, 6th P.M., Rio Blanco County, as a 320-acre drilling and spacing unit for production from the Mancos "A" Formation, and approve the SW Rangely Federal No. 3-9-1-2 Wel l as the permitted well for the unit.

ORDER

NOW, THEREFORE, IT IS ORDERED, that a 320-acre drilling and spacing unit consisting of the N1/2 of Section 9, Township 1 South, Range 102 West, 6th P.M. is hereby established for production from the Mancos "A" Formation.

IT IS FURTHER ORDERED, that the SW Rangely Federal No. 5-9-1-2 Well located in the SW1/4 NW1/4 of Section 9, Township 1 South, Range 102 West, 6th P.M., producing from the Mancos "A" and Mancos "B" Formations shall be shut in for production from the Mancos "A" Formation.

IT IS FURTHER ORDERED, that the SW Rangely Federal No. 3-9-1-2 Well located 703 feet FNL and 1912 feet FWL in the NE1/4 NW1/4 of said Section 9, completed in and capable of production from the Mancos "A" Formation, shall be the permitted well for said unit.

IT IS FURTHER ORDERED, that the rules and regulations contained herein 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, rules and regulations.

ORDERED this day of , 1994, as of December 20, 1993.

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 January 9, 1994 ??

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