IN THE MATTER OF THE PROMULGATION AND              CAUSE NO. 232
ESTABLISHMENT OF FIELD RULES TO GOVERN
OPERATIONS IN THE WATTENBERG GAS SPACED         ORDER NO. 232-214
AREA, ADAMS COUNTY, COLORADO 

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 8:30 a.m. on March 31, 1998, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of Bataa Oil, Inc., for an order to allow two (2) wells to be drilled as third wells for production of gas and associated hydrocarbons from the "J" Sand Formation, for certain 320-acre drilling and spacing units.

FINDINGS

The Commission finds as follows:

1. Bataa Oil, Inc., 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. In Cause No. 232, the Commission established 320-acre drilling and spacing units with said units to consist of the N½ and S½ or the E½ and W½ of a governmental section for production from the "J" Sand Formation and with the authorized well to be located in the NE¼ and the SW¼ of each section no closer than 990 feet from the boundaries of the quarter section. By Order No. 232-20, the Commission authorized the drilling of a second well for each 320-acre drilling and spacing unit with the additional well to be located no closer than 990 feet from the boundaries of the quarter section upon which it is located.

5. The Applicant proposes to drill the below-listed wells in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction as third "J" Sand Formation wells for the 320-acre units as described.

Well Name Proposed Location 320-acre Drilling/Spacing Unit
Guthrie 21-2 NE¼ NW¼ Section 2-1S-67W N½
Sack 12-6 SW¼ NW¼ Section 6-1S-67W N½

6. Evidence submitted by the Applicant and reviewed by the Hearing Officer indicates that the existing wells have an estimated ultimate recovery rate of 20.7% for the NW¼ of Section 2 and 11.4% for the NW¼ of Section 6.

7. That in order to prevent waste and protect the correlative rights additional wells are necessary to recover remaining "J" Sand Formation reserves.

8. The Applicant agreed to be bound by oral order of the Commission.

9. Based on the facts stated in the application, having received no protests and having been heard by the Hearing Officer who recommends approval of the application, an order of the Commission should be entered amending Cause No. 232, allowing the drilling and recompletion of an additional "J" Sand Formation well for each of the 320-acre drilling and spacing units described in Finding #7 to be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction. Once drilled and completed, these will be the third "J" Sand Formation wells for the 320-acre drilling and spacing units.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Cause No. 232 is hereby amended to allow the drilling of an additional "J" Sand Formation well for each of the 320-acre drilling and spacing units in the below-listed lands to be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction.

Well Name Proposed Location 320-acre Drilling/Spacing Unit
Guthrie 21-2 NE¼ NW¼ Section 2-1S-67W N½
Sack 12-6 SW¼ NW¼ Section 6-1S-67W N½

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 10th day of April, 1998, as of March 31, 1998.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary

Dated at Suite 801 1120 Lincoln Street Denver, Colorado 80203 April 13, 1998

(232-214)