REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 27, 1983 at 9:00 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Bellwether Exploration Company, for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Codell formation underlying certain lands in Weld County, Colorado.

FINDINGS

The Commission finds as follows:

1. Bellwether Exploration 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. Evidence presented at the hearing indicates that the Codell formation constitutes a common source of supply of oil and associated hydrocarbons underlying the following described lands in Weld County, Colorado, to-wit:

Township 5 North, Range 66 West, 6th P.M. Section 1: N/2 Section 2: N/2 Township 6 North, Range 66 West, 6th P.M. Sections 15 thru 18: All Section 19: E/2

Sections 20 thru 23: All Section 24: S/2 Sections 25 thru 29: All Sections 32 thru 36: All

5. In order to prevent waste of oil and gas, as defined by law; to protect correlative rights of all parties concerned; to prevent the drilling of unnecessary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be made establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Codeil formation, common source of supply underlying the lands defined herein. The units should consist of 80-acres, more or less, and in the area where there are existing wells producing or producible from said formation, the units should consist of the E/2 and W/2 of each quarter section according to the governmental survey and said wells should be considered the permitted wells for the units upon which each is located. For the remaining area, the units should consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section, according to the governmental survey, with the permitted well located in the center of the NE/4 and SW/4 of each quarter section with a tolerance of 200 feet in any direction, except for Sections 17, 18, 19 and 20. For the area consisting of said Sections 17, 18, 19 and 20, the permitted well should be located in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 200 feet in any direction. In addition, the Director may, without additional notice and hearing, grant exceptions to the permitted well locations due to topography, or surface hazards, provided the owners of the contiguous and cornering units toward which the proposed location would be moved, file a waiver or consent in writing, agreeing to the exception location.

6. All available geological and engineering data concerning said CodeIl formation indicate that one well will efficiently and economically drain an area of approximately 80-acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently and economically drained by one well producing from said Codeil formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the Codeil formation underlying the Bracewell Field, herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. Eighty (80) acre drilling and spacing units shall be and the same are hereby established for the production of oil and associated hydrocarbons from the' CodeIl formation underlying the following described lands in the Bracewell Field, Weld County, Colorado, to-wit:

ToWnship 5 North, Range 66 West, 6th P.M. Section 1: N/2 Section 2: N/2

Township 6 North, Range 66 West, 6th P.M. Sections 15 thru 18: All Section 19: E/2 Sections 20 thru 23: All Section 24: S/2 Sections 25 thru 29: All Sections 32 thru 36: All Rule 2. Said drilling units shall consist of 80-acres, more or less, and in the area where there are existing wells producing or producible from said Codeil formation, the units shall consist of the E/2 and W/2 of each quarter section, and said wells shall be considered the permitted wells for the units upon which each is located.

Rule 3. For the remaining undeveloped area, the units shall consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section according to the governmental survey, with the permitted well located, except for Sections 17, 18, 19 and 20, in the center of the NE/4 and SW/4 of each quarter section with a tolerance of 200 feet in any direction. For the area consisting of Sections 17, 18, 19 and 20, the permitted well shall be located in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 200 feet in any direction. The Director may, without additional notice and hearing, grant exceptions to the permitted well locations due to topography or surface hazards, provided the owners of the contiguous and cornering units toward which the proposed location would be moved, file a waiver or consent in writing, agreeing to the exception location.

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.

2 " (381-1)

ENTERED this 8th day of July 1983, as of June 27, 1983.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(381-1)