REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 16, 1994 at 8:30 a.m., in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Barrett Resources Corporation, for an order to amend Rule 316 and establish new setback rules for production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group for certain lands in Ga rfield County. In addition, the applicant requests approval for each well currently located upon and producing or capable of producing from the Williams Fork Formation underlying the application lands as an exception location, to the extent they do not conform with the proposed setback rules.

FINDINGS

The Commission finds as follows:

1. Barrett Resources Corporation, 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. Rule 316 of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission requires wells drilled in excess of 2,500 feet in depth to be located not less than 600 feet from any lease line, and not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply. The below-listed lands are under the provisions of Rule 316:

Township 6 South, Range 96 West, 6th P.M. Section 8: All Section 13: All Section 17: All Sections 19-22: All Sections 28-33: All

Township 6 South, Range 97 West, 6th P.M. Section 14: All Sections 23-27: All Sections 35-36: All

Township 7 South, Range 96 West, 6th P.M. Sections 2-11: All Sections 14-23: All Sections 26-35: All

Township 7 South, Range 97 West, 6th P.M. Sections 1-2: All Sections 11-14: All

5. Testimony presented at the administrative hearing indicated that extremely difficult topographic conditions are present in the above-described lands and that a thirty percent (30%) larger window in which a well could be located would reduce the amount of exception location requests by approximately forty percent (40%). The permitted well should be located no closer than 400 feet from the boundaries of any lease line and no closer than 800 feet from an existing Williams Fork Formation well. In addition, upon adequate showing by an applicant, the Director should be allowed to grant exceptions to the permitted well locations for topographical reasons. Further, engineering testimony was recounted from previous hearings in the Williams Fork Formation to show that correlative rights would not be harmed by a change in permitted well locations due to production typically not extending beyond the limited v ertical and lateral natural fracture pattern and lithologic boundaries.

6. Based on the facts stated in the application, having received no protests, and having been heard by the Hearing Officer on May 10, 1994 and recommended for approval, the Commission should approve the application to amend Rule 316 and establish new setback rules for production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group for certain lands in Garfield County.

ORDER

NOW, THEREFORE IT IS ORDERED, that Rule 316 of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission is hereby amended and new setback rules are established for production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group for the below-described lands in Garfield County. The permitted wells should be located no closer than 400 feet from the boundaries of any lease line and no closer than 8 00 feet from any existing Williams Fork Formation well or wells.

Township 6 South, Range 96 West, 6th P.M. Section 8: All Section 13: All Section 17: All Sections 19-22: All Sections 28-33: All

Township 6 South, Range 97 West, 6th P.M. Section 14: All Sections 23-27: All Sections 35-36: All

Township 7 South, Range 96 West, 6th P.M. Sections 2-11: All Sections 14-23: All Sections 26-35: All

Township 7 South, Range 97 West, 6th P.M. Sections 1-2: All Sections 11-14: All

IT IS FURTHER ORDERED, that each well currently located upon and producing or capable of producing from the Williams Fork Formation underlying the above-described lands shall be designated as an exception location, to the extent said wells do not conform with the setback rules herein described.

IT IS FURTHER ORDERED, that upon adequate showing by an applicant, the Director shall be allowed to grant exceptions to the permitted well locations for topographical reasons.

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 , 1994, as of May 16, 1994.

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 June 6, 1994 ??

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