BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE APPLICATION OF )

TOM BROWN, INC. ) CAUSE NO. 290

BIG HOLE FIELD )

MOFFAT COUNTY, COLORADO ) DOCKET NO. ____

VERIFIED APPLICATION

COMES NOW, the Applicant, Tom Brown, Inc., by and through its attorneys, Poulson, Odell & Peterson, LLC, and makes application to the Oil and Gas Conservation Commission of the State of Colorado for an order to permit, at the option of the operator, additional wells to be drilled to and completed in the Middle Lewis Formation in certain drilling and spacing units in the Big Hole Field in Moffat County, Colorado. In support thereof, Tom Brown, Inc. states as follows:

APPLICATION LANDS

Applicant is the owner of oil and gas leases and the operator of wells producing from the Middle Lewis Formation in the Big Hole Field in the following described lands:

Township 10 North, Range 94 West, 6th P.M.

Section 10: All

Section 11: All

Section 14: All

Section 15: All

Section 22: All

Section 23: All

These lands are referred to as the Application Lands.

EXISTING ORDER

By Cause No. 290, Order No. 290-1 dated March 19, 1974, as corrected by Correction of Order dated April 9, 1974, the Oil and Gas Conservation Commission established drilling and spacing units in the Application Lands, among other lands, for production from the Middle Lewis Formation as defined in the application. The order establishes drilling and spacing units of 320-acres for the production of gas from the Middle Lewis Formation consisting of the E/2 and W/2 or the N/2 and S/2 of each section, where designation of the units may be deferred until after permitted wells are drilled provided there is concurrence by all owners within the section and the Director is so advised in writing prior to drilling. The order states that upon completion of a well a designation of the unit may be made with the concurrence by all owners without further hearing. The order provides that the permitted well for each unit should be located no closer than 600 feet from the boundaries of the drilling unit and no closer than 1,320 feet from another producing or producible well. In the order, as corrected by the correction of order, the designated units for Sections 14, 15 and 22 are defined to be the E/2 and W/2 of each section, and the order states that the wells located therein should be considered the permitted wells for the unit upon which they are located.

BIG HOLE DEEP UNIT

III

The Big Hole Deep Unit covers the following described lands within the Application Lands:

Township 10 North, Range 94 West, 6th P.M.

Section 14: SW/4, SW/4SE/4

Section 15: SE/4SE/4

Section 22: N/2NE/4, SE/4NE/4

Section 23: N/2N/2, S/2NW/4, N/2SW/4

The Big Hole Deep Unit covers all formations underlying the Lewis Shale, or from the top of the Mesaverde Formation down. The Big Hole Deep Unit does not affect formations which are the subject of this Application.

APPLICATION

Wells were drilled and completed in the Middle Lewis Formation in the Application Lands between 1968 and 1975. Subsequent operations of the wells producing from the Middle Lewis Formation in the Application Lands have provided geological and engineering evidence to the effect that in the Application Lands one well producing from the Middle Lewis Formation will not efficiently and economically drain an area of 320 acres. Based upon Applicant’s analysis of existing data, Applicant asserts that up to four wells may be required in each such drilling and spacing unit to drain the Middle Lewis Formation efficiently and economically. Applicant requests that, at the option of the operator, three additional wells be permitted to be drilled to and completed in the Middle Lewis Formation in each 320-acre drilling and spacing unit in the Application Lands, with the result that up to four wells can be drilled to and completed in the Middle Lewis Formation in each drilling and spacing unit. Applicant alleges that each such drilling and spacing unit is not smaller than the maximum area that can be efficiently and economically drained by four wells producing from the Middle Lewis Formation, and that the correlative rights of all parties will be protected. Applicant further alleges that the additional wells may be drilled in a manner consistent with the protection of public health, safety and welfare.

Because of the well location tolerance permitted by Order No. 290-1 referred to above, and the location of wells previously drilled, in the event the Commission grants this Application to allow up to three additional wells to be drilled on each 320-acre drilling and spacing unit, it is necessary to decrease the required distance between wells producing or producible from the same formation. Applicant requests that the required distance between any well drilled subsequent to the entry of the order in a 320-acre drilling and spacing unit in the Application Lands and another well producing or producible from the same formation be decreased from 1320 feet to 990 feet.

The Application Lands contain numerous archeological sites. Applicant may be required to modify a well location to avoid interference with an archeological site. Therefore, Applicant requests the Commission to authorize the Director to grant an exception to the well location setbacks specified in Order No. 290-1, as corrected, and as modified by this Application, up to and including 100 feet, but not beyond, to avoid archaeological sites without notice and hearing, and without the necessity to obtain consent from the lease owners or the mineral interest owners of the lands toward whom the well location is proposed to be moved.

VII

Portions of the Application Lands include extreme topographic relief. Applicant may be required to modify a well location for topographic reasons. Therefore, Applicant requests the Commission authorize the Director to grant an exception to the well location setbacks specified in Order No. 290-1, as modified by this Application, up to and including 100 feet, but not beyond, for topographic reasons without notice and hearing and without the necessity to obtain the consent from the lease owner or the mineral interest owners of the lands toward whom the well location is proposed to be moved.

VIII

To prevent waste, to protect correlative rights, to ensure the proper and efficient development of the Middle Lewis Formation in the Application Lands, and to ensure the greatest ultimate recovery of gas and associated hydrocarbon substances from the Middle Lewis Formation in the Application Lands, Applicant requests that after notice and hearing as provided by law, the Commission issue its order providing (i) that, at the option of the operator, four wells may be drilled to and completed in the Middle Lewis Formation in each 320-acre drilling and spacing unit in the Application Lands, (ii) that Order No. 290-1 be modified to provide that any well drilled subsequent to the entry of the order be no closer that 990 feet from another well producing or producible from the same formation, (iii) that the Director be authorized, without additional notice and hearing or consent, to grant an exception to the well location setbacks up to and including 100 feet, but not beyond, to avoid archaeological sites, and (iv) that the Director be authorized, without additional notice and hearing or consent, to grant an exception to the well location setbacks up to and including 100 feet, but not beyond, for topographic reasons.

APPLICATION IN THE ALTERNATIVE

As is noted in Paragraph IV above, Applicant’s analysis of existing data pertaining to production from the Middle Lewis Formation in the Application Lands indicates that up to four wells will be required to drain efficiently and economically the Middle Lewis Formation in each 320-acre drilling and spacing unit. If the existing geological and engineering evidence presented by Applicant does not result in a finding by the Commission that up to four wells are required to drain efficiently and economically the Middle Lewis Formation in the existing 320-acre drilling and spacing units, Applicant requests that the Commission establish two pilot project drilling and spacing units, one comprised of the W/2 of Section 14 and the other comprised of the E/2 of Section 15, Township 10 North, Range 94 West, 6th P.M., in which four wells are permitted to be drilled to and completed in the Middle Lewis Formation. The pilot project drilling and spacing units so specified would permit Applicant to generate additional and current geologic and engineering evidence which may be used to confirm its analysis of existing data that up to four wells are necessary to drain efficiently and economically the Middle Lewis Formation in the existing 320-acre drilling and spacing units.

If the Commission determines that the existing geological and engineering evidence presented by Applicant does not indicate that up to four wells are necessary to drain efficiently and economically the Middle Lewis Formation in each 320-acre drilling and spacing unit, Applicant asserts in the alternative that two wells may be required in each 320-acre drilling and spacing units in the Application Lands (excluding the pilot project drilling and spacing units designated in Paragraph IX above) to drain the Middle Lewis Formation efficiently and economically. Applicant requests in the alternative that an additional well be permitted to be drilled to and completed in the Middle Lewis Formation in each 320-acre drilling and spacing unit in the Application Lands (excluding the pilot project drilling and spacing units designated in Paragraph IX), with the result that up to two wells can be drilled to the Middle Lewis Formation in each drilling and spacing unit (excluding the pilot project drilling and spacing units). Applicant alleges in the alternative that each such drilling and spacing unit is not smaller than the maximum area that can be efficiently and economically drained by two wells producing from the Middle Lewis Formation, and that the correlative rights of all parties will be protected. Applicant further alleges that the additional wells may be drilled in a manner consistent with the protection of public health, safety and welfare.

Because of the well location tolerance permitted by Order No. 290-1 referred to above, and the location of wells previously drilled, in the event the Commission grants this Application to allow up to three additional wells to be drilled in the pilot project drilling and spacing units referred to in Paragraph IX above and one additional well to be drilled in each of the remaining 320-acre drilling and spacing units, it is necessary to decrease the required distance between wells producing or producible for the same formation. Applicant requests that distance between any well drilled subsequent to the entry of the order in a 320-acre drilling and spacing unit in the Application Lands and another well producing or producible from the same formation be decreased from 1320 feet to 990 feet.

XII

The Application Lands contain numerous archeological sites. Applicant may be required to modify a well location to avoid interference with an archeological site. Therefore, Applicant requests the commission to authorize the Director to grant an exception to the well location setbacks specified in Order No. 290-1, as modified by this Application, above up to and including 100 feet, but not beyond, to avoid archaeological sites without notice and hearing, and without the necessity to obtain consent from the lease owners or the mineral interest owners of the lands toward whom the well location is proposed to be moved.

XIII

XIV

If the Commission determines the Application of Applicant requesting up to four wells to be drilled to and completed in the Middle Lewis Formation in each 320-acre drilling and spacing units in the Application Lands should not be granted, Applicant requests, in the alternative, in order to prevent waste, to protect correlative rights, to ensure the proper and efficient development of the Middle Lewis Formation in the Application Lands, and to ensure the greatest ultimate recovery of gas and associated hydrocarbon substances from the Middle Lewis Formation in the Application Lands, that the Commission, after notice and hearing as provided by law, issue its order providing (i) that, at the option of operator, up to four wells may be drilled to and completed in the drilling and spacing unit comprising the W/2 of Section 14, Township 10 North, Range 94 West, 6th P.M. and in the drilling and spacing unit comprising the E/2 of Section 15, Township 10 North, Range 94 West, 6th P.M. for production from the Middle Lewis Formation as a pilot project to gather additional geological and engineering information about the Middle Lewis Formation, (ii) that, at the option of the operator in the remainder of the Application Lands, two wells may be drilled to and completed in each 320-acre drilling and spacing unit in the Application Lands, (iii) that Order No. 290-1 be revised to provide that any well drilled subsequent to entry of the order be no closer than 990 feet from another well producing or producible from the same formation, (iv) that the Director be authorized, without additional notice and hearing or consent, to grant an exception to the well location setbacks up to and including 100 feet, but not beyond, to avoid archaeological sites, and (v) that the Director be authorized without additional notice and hearing or consent, to grant an exception to the well location setbacks up to and including 100 feet, but not beyond, for topographical reasons.

GENERAL PROVISIONS

Applicant states that to the best of its information and belief Exhibit A attached to this Verified Application is the list of the names of owners required to be notified in accordance with Commission Rule 507 covering the Application Lands.

XVI

WHEREFORE, Applicant respectfully requests that this matter be set for hearing by the Commission; that notice hereof be given as required by law; and that upon hearing this Commission issue its order granting this Application as requested. Applicant further requests that the Commission in its order grant such other provisions as the Commission may find to be necessary or desirable in the cause.

DATED this 31st day of January, 2003.

Respectfully submitted,

TOM BROWN, INC.

BY:_____________________________

Carleton L. Ekberg, Esq.

Poulson, Odell & Peterson, LLC

1775 Sherman Street, Suite 1400

Denver, Colorado 80203

(303) 861-4400

Applicant's Address:

Tom Brown, Inc.

555 17th Street

Suite 1850

Denver, Colorado 80202-3918