BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

REPORT OF COMMISSION

                        This cause came on for hearing before the Commission on August 8, 2011, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to establish three approximate 960-acre drilling and spacing units for certain lands located in Townships 10 and 11 North, Ranges 57 and 59 West, 6^th P.M., and approve one horizontal well within each unit, with the option to drill and complete an additional three wells per unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

FINDINGS

The Commission finds as follows:

1.     Whiting Oil & Gas Corp. (“Whiting” or “Applicant”), 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 pursuant to the Oil and Gas Conservation Act.

4.     Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and located 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.  Certain lands located in Townships 10 and 11 North, Ranges 57 and 59 West, 6^th P.M. are subject to this Rule for the Niobrara Formation.

5.     On June 9, 2011, Whiting, by its attorneys, filed with the Commission a verified application (the “Application”) for an order to establish three approximate 960-acre drilling and spacing units for the below-listed lands (the “Application Lands”), and approve one horizontal well within each unit, with the option to drill and complete an additional three wells per unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the wellbore for the permitted wells to be no closer than 600 feet from the unit boundaries, without exception being granted by the Director:

Drilling and Spacing Unit No. 1

Township 11 North, Range 57 West, 6^th P.M.

Drilling and Spacing Unit No. 2

Township 10 North, Range 57 West, 6^th P.M.

Drilling and Spacing Unit No. 3

Township 10 North, Range 59 West, 6^th P.M.

6.     On July 29, 2011, Whiting, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits. Sworn written testimony and exhibits were submitted in support of the Application.

7.     Land testimony and exhibits submitted in support of the Application by Scott McDaniel, Regional Land Manager for Whiting, showed that Whiting is the sole leaseholder of the Application Lands, and that the lands are in the immediate vicinity of lands in which Niobrara Formation wells have been drilled, tested and completed and that those wells demonstrate that horizontal well development are proposed by Whiting will not result in waste and will protect correlative rights.

8.     Geology testimony and exhibits submitted in support of the Application by John R. Forster, Regional Geologic Manager for Whiting, showed that the Niobrara Formation underlies the entirety of the Application Lands with a total thickness of approximately 250 to 370 feet under the proposed spacing area with a regional dip of approximately 40 feet per mile to the west.

9.  Engineering testimony and exhibits submitted in support of the Application by Ralph L. Nelms, Senior Reservoir Engineer for Whiting, showed an estimated ultimate recovery of 378,000 barrels of oil with a resulting drainage area of 240 acres expected.  The testimony also showed that the proposed 960-acre drilling and spacing unit is not smaller than the maximum area that can be efficiently drained by one horizontal Niobrara well and that the economics for the project are favorable.

10.   The Application was reviewed by the Colorado Department of Public Health and Environment (“CDPHE”) pursuant to consultation provisions of Rule 306.d.  In a letter dated July 29, 2011, the CDPHE Oil & Gas Coordinator indicated that CDPHE does not believe any additional conditions of approval are necessary for approving the Application.

11.  The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.

12.   Whiting agreed to be bound by oral order of the Commission. 

13.   Based on the facts stated in the verified Application, having received no protests, and based on the Hearing Officer review of the Application under Rule 511., the Commission should enter an order establishing three approximate 960-acre drilling and spacing units for certain lands located in Townships 10 and 11 North, Ranges 57 and 59 West, 6^th P.M., and approve one horizontal well within each unit, with the option to drill and complete an additional three wells per unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

ORDER

NOW, THEREFORE IT IS ORDERED, that three approximate 960-acre drilling and spacing units are hereby established for the below-listed lands, and one horizontal well is hereby approved within each unit, along with the option to drill and complete an additional three wells per unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the wellbore for the permitted wells to be no closer than 600 feet from the unit boundaries, without exception being granted by the Director:

Drilling and Spacing Unit No. 1

Township 11 North, Range 57 West, 6^th P.M.

Drilling and Spacing Unit No. 2

Township 10 North, Range 57 West, 6^th P.M.

Drilling and Spacing Unit No. 3

Township 10 North, Range 59 West, 6^th P.M.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective immediately.

                        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.

                        IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this Order to be final agency action for purposes of judicial review within 30 days after the date this Order is mailed by the Commission.

                        IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

                        ENTERED this               12^th  day of August, 2011, as of August 8, 2011.

                        CORRECTED this  14^th  day of November, 2011.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By____________________________________    

                                                                                    Peter J. Gowen, Acting Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

August 12, 2011

CORRECTED  November 14, 2011.