REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 16, 1994 at 8:30 a.m., in Room 318, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Energy Minerals Corporation, for an order to allow five wells to be drilled at exception locations on certain 160-acre drilling and spacing units, with the permitted wells to be located as described herein, with a tolerance of 100 feet in an y direction, for production from the Niobrara Formation.

FINDINGS

The Commission finds as follows:

1. Energy Minerals Corporation, 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. On December 19, 1983, the Commission issued Order No. 328-5 which established 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Niobrara Formation in the Waverly Field (Outside Area), with the permitted well to be located in the center of either the NW quarter-quarter or the SE quarter-quarter with a tolerance of 100 feet in any direction. An additional well was allowed to be drilled in the undrilled diagonal offset quarter-quarter section, with a tolerance of 100 feet in any direction.

5. Testimony presented at the administrative hearing showed that the below-listed wells should be allowed to be drilled at the described exception locations for the 160-acre drilling and spacing units in order to ensure efficient and economic development of the gas reservoir by locating wells near the top of anticlines and away from faults existing in the Waverly Field (Outside Area).

Township 4 North, Range 46 West, 6th P.M. HSR 16-28 Well Section 28 990' FSL, 990' FEL HSR 7-33 Well Section 33 1980' FNL, 1980' FEL HSR 14-33 Well Section 33 990' FSL, 1980' FWL HSR 5-34 Well Section 34 1980' FNL, 990' FWL HSR 7-34 Well Section 34 1980' FNL, 1980' FEL

6. Waivers have been obtained from all of the owners of the cornering and contiguous drilling and spacing units toward which the proposed exception locations would be moved.

7. Based on the facts stated in the verified application, and receiving no protests and having been heard by the Hearing Officer on May 13, 1994 and recommended for approval, the Commission should enter an order authorizing five wells to be drilled at exception locations for certain 160-acre drilling and spacing units, with the permitted well location as described in Finding 5, with a tolerance of 100 feet in any direction, for production from the Niobr ara Formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the below-listed wells are hereby approved to be drilled and completed at exception locations on certain 160-acre drilling and spacing units, with the permitted wells to be located as described below, with a tolerance of 100 feet in any direction, for production from the Niobrara Formation.

Township 4 North, Range 46 West, 6th P.M. 160-acre Units HSR 16-28 Well Section 28 990' FSL, 990' FEL SE1/4 HSR 7-33 Well Section 33 1980' FNL, 1980' FEL NE1/4 HSR 14-33 Well Section 33 990' FSL, 1980' FSL SW1/4 HSR 5-34 Well Section 34 1980' FNL, 990' FWL NW1/4 HSR 7-34 Well Section 34 1980' FNL, 1980' FEL NE1/4

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 May 16, 1994.

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 June 6, 1994 ??

(328#9)