BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND  ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE IGNACIO-BLANCO FIELD,                                  ORDER NO. 112‑104 LA PLATA COUNTY, COLORADO	) ) ) )	CAUSE NO.   112 ORDER NO.   112-104

REPORT OF THE COMMISSION

                                  This cause came on for hearing before the Commission on September 21, 1992, at 8:30 a.m., in Room 101, Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Bowen Exploration Company, Inc. for an order allowing an additional well to be drilled on 320-acre drilling and spacing units for certain lands in Township 33 North, Range 11 West, N.M.P.M., La Plata County, for the production of gas and associated hydrocarbons from the Fruitland coal seams.

FINDINGS

                                  The Commission finds as follows:

                                  1.  Bowen Exploration Company, 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.  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.  On June 17, 1988, the Commission issued Order No. 112‑60 which established 320‑acre drilling and spacing units for the production of methane gas from the Fruitland coal seams underlying certain lands in the Ignacio‑Blanco Field, with the units to consist of the E1/2 and W1/2 or the N1/2 and S1/2 of a governmental section with the permitted well to be located in the NW1/4 and SE1/4 of each unit.  On August 15, 1988, the Commission issued Order No. 112-61 which among other things, established additional reporting requirements to the rules established in Order No. 112-60.

                                  5.  Bowen Exploration Company has drilled one well in each 320-acre drilling and spacing unit for the below-listed lands and alleges that for purposes of recovering and producing natural gas up to its maximum efficiency, developing the natural gas in the most economical manner, and avoiding waste of the resource, two wells should be allowed within each 320-acre drilling and spacing unit and that reservoir characteristics and current exploration and production experience supports the drilling of an additional well.

Township 33 North, Range 11 West, N.M.P.M.

                                                                           Section 9:  S1/2

                                                                 Sections 17 through 20:  All

                                                                 Sections 29 through 32:  All

                                  6.  Letters in support of the application were filed by the Southern Ute Indian Tribe and the Bureau of Land Management.  Protests against the application were filed by Wendy Hoffman, Jim and Lynn Schneider, San Juan Citizens Alliance, Amoco Production Company, Meridian Oil Company, La Plata County Board of Commissioners, Arco Oil and Gas Company, Fuel Resources Development Company, Amax Oil and Gas Inc., San Juan Basin Drilling Associates and the Weminuche Group of the Sierra Club.

                                  7.  Evidence presented at the hearing indicated that one well will efficiently and economically drain a 320‑acre drilling and spacing unit, and that an additional well is not necessary to recover gas and associated hydrocarbons from the Fruitland coal seams Formation.

                                  8.  Based on the facts stated in the verified application and the testimony presented at the time of hearing by the applicant and the protestants, the Commission should deny the request to amend Order Nos. 112-60 and 112-61 to allow an additional well to be drilled and completed on the above-described 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Fruitland coal seams.

O R D E R

                                  NOW, THEREFORE IT IS ORDERED, that an order allowing an additional well to be drilled on 320-acre drilling and spacing units for the above-described lands in the Ignacio-Blanco Field, La Plata County, for the production of gas and associated hydrocarbons from the Fruitland coal seams is hereby denied.

                                  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 rights, after notice and hearing to alter, amend or repeal any and/or all of the above orders.

                                  Entered this day of , 1992 as of September 21, 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 16, 1992