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 CHEYENNE WELLS FIELD, CHEYENNE COUNTY, COLORADO	) ) ) )	CAUSE NO.   212 ORDER NO.   212-11

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission at 8:30 a.m. on December 20, 1993, in the Boettcher Auditorium, Colorado History Museum, 1300 Broadway Street, Denver, Colorado, on the verified application of Mull Drilling Company, Inc. for an order allowing the Klepper A No. 3 Well to be drilled at an exception location in the center of the SE1/4 NW1/4 of Section 32, Township 13 South, Range 44 West, 6th P.M., for production of oil from the Mississippian Formation for the 80-acre drilling and spacing unit consisting of the E1/2 of the NW1/4 of said Section 32.

FINDINGS

                        The Commission finds as follows:

                        1.  Mull Drilling 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 October 15, 1968 the Commission authorized Order No. 212-1 to be issued which established 80-acre drilling and spacing units for the production of oil and associated hydrocarbons underlying the Cheyenne Wells Field in Cheyenne County, Colorado.  The units shall consist of the E1/2 and W1/2 or the N1/2 and S1/2 of a governmental quarter section, with the permitted well to be located in the center of the NE1/4 and SW1/4 of each quarter section, with a tolerance of 150 feet in any direction to avoid surface obstructions and hazards.

                        5.  The Klepper No. 1-A Well was drilled at a legal location in the NE1/4 NW1/4 of said Section 32, as a producer of oil and associated hydrocarbons from the Mississippian Formation, and has since been plugged and abandoned.

                        6.  Geological and engineering evidence presented at the administrative hearing indicated that the previous well in the NE1/4 NW1/4 of said Section 32 did not recover all the hydrocarbons from the entire 80-acre drilling and spacing unit.

                        7.  That in order to protect correlative rights and prevent waste, the Klepper A No. 3 Well should be authorized to be drilled at an exception location in the center of the SE1/4 NW1/4 of said Section 32 for the 80-acre drilling and spacing unit consisting of the E1/2 NW1/4 of said Section 32, for production from the Mississippian Formation.

                        8.  Based on the facts stated in the verified application and having been heard by the Hearing Officers who recommended approval of the application, and having received no protests, the Commission should approve the request and amend Order No. 212-1 to allow an additional well to be drilled and completed for production from the Mississippian Formation.

O R D E R

                        NOW, THEREFORE, IT IS ORDERED that Order No. 212-1 is hereby amended and the Klepper A No. 3 Well is authorized to be drilled at an exception location in the center of the SE1/4 NW1/4 of Section 32, Township 13 South, Range 44 West, 6th P.M., with a tolerance of 150 feet in any direction for surface hazards, for production from the Mississippian Formation, for the 80-acre drilling and spacing unit consisting of the E1/2 of the NW1/4 of said Section 32.

                        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 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