IN THE MATTER OF THE PROMULGATION AND          CAUSE NO. 331
ESTABLISHMENT OF FIELD RULES TO GOVERN
OPERATIONS IN THE BUCKBOARD FIELD,                   ORDER NO. 331-7
YUMA COUNTY, COLORADO

REPORT OF THE COMMISSION

This cause came on for hearing before the Hearing Officers at 10:00 a.m. on January 7, 2002 in Room 201, Greeley Recreation Center, 651 10th Avenue, Greeley, Colorado on the application of Williams Production RMT Company for an order to amend Order Nos. 331-2 and 331-5 to allow any well drilled as the initial well in a 160-acre drilling and spacing unit to be located no closer than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit for certain lands in the Buckboard Field.

FINDINGS

The Commission finds as follows:

1. Williams Production RMT Company 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 November 21, 1977, the Commission issued Order No. 331-1, which established 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Niobrara Formation with the permitted well to be located no closer than 990 feet from the unit boundary underlying certain lands in the Buckboard Field. By Order No. 331-2, dated August 22, 1978 and upheld by Order No. 331-3 dated September 9, 1981, the size of the drilling and spacing units within the spaced area was reduced to 160-acres with the permitted well to be located no closer than 900 feet from the unit boundaries for the below-listed lands:

Township 3 North, Range 46 West, 6th P.M.
Sections 7 thru 11: All
Sections 14 thru 23: All

5. On June 4, 1999, the Commission issued Order No. 331-5 which allowed an additional well to be drilled and completed in Section 16, Township 3 North, Range 47 West, 6th P.M.

6. On November 19, 2001, Williams Production RMT Company, by its attorney filed with the Commission a verified Application for an order to amend Order Nos. 331-2 and 331-5 to allow any well drilled as the initial well in any 160-acre drilling and spacing unit in Section 16, Township 3 North, Range 46 West, 6th P.M. to be located no closer than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit, and to allow the Director authority to grant an exception location to the permitted well location without prior notice or hearing upon an adequate showing by the operator that topography makes it unreasonable to drill a well within a 560 feet setback, but no closer than 380 feet from the boundary of the drilling and spacing unit.

7. No protests were filed on the Application and an administrative hearing was held. At the time of the administrative hearing Williams withdrew from the application the request to allow the Director authority to grant an exception location no closer than 380 feet from the boundary of the drilling and spacing unit without prior notice and hearing.

8. Testimony presented at the administrative hearing indicated that a change in well location setbacks is necessary to allow flexibility in locating wells and optimizing drainage.

9. At the time of the administrative hearing, Williams Production RMT Company agreed to be bound by oral order of the Commission.

10. The Commission should enter an order to allow any well drilled as the initial well in any 160-acre drilling and spacing unit in Section 16, Township 3 North, Range 46 West, 6th P.M. to be located no closer than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit.

ORDER

NOW, THEREFORE IT IS ORDERED, that Order Nos. 331-2 and 331-5 are hereby amended to allow any well drilled as the initial well in any 160-acre drilling and spacing unit in Section 16, Township 3 North, Range 46 West, 6th P.M. to be located no closer than 560 feet from the outer boundaries of the 160-acre drilling and spacing unit.

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 January, 2002, as of January 7, 2002.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Dated at Suite 801 Patricia C. Beaver, Secretary 1120 Lincoln Street Denver, Colorado 80203 January 10, 2002.

(331#7)