REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 18, 1984 at 9:00 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearings required by law, on the application of St. Michael Exploration Co. and Bellwether Exploration Co., for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Niobrara formation underlying the lands in the Bracewell Field in which 80-acre drilling and spacing units were established for the production of oil and associated hydrocarbons from the Codell formation by Order NO. 381-1.

FINDINGS

The Commission finds as follows:

1. St. Michael Exploration Co. and Bellwether Exploration Co., as applicants herein, are interested parties 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 June 27, 1983 the Commission authorized Order No. 381-1 to be issued which established 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Codell formation underlying certain lands in the Bracewell Field. In the area where there were existing wells, the units consist of the E/2 and W/2 of each quarter section. For the remaining area the units consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section. The permitted well location is the center of the NE/4 and SW/4 of each quarter section with a tolerance of 200 feet, except in Sections 17, 18, 19 and 20 where the permitted well location is the center of the NW/4 and SE/4 of each quarter section with a tolerance of 200 feet. Exceptions may be granted by the Director due to topography and surface hazards.

5. Evidence presented at the hearing indicates that the Niobrara formation constitutes a common source of supply of oil and associated hydrocarbons 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 Section 19: E/2 Sections 20 thru 23 Section 24: S/2 Sections 25 thru 29, 32 thru 36

6. Order No. 381-1 should be amended to include the production of oil and associated hydrocarbons from the Niobrara formation and that the units and permitted well locations be in accordance with the provisions of said Order No. 381-1.

7. All available geological and engineering data concerning said Niobrara 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 as described in Order No. 381-1 are not smaller than the maximum area that can be efficiently and economically drained by one well producing from said Niobrara formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order No. 381-1 is hereby amended to include the production of oil and associated hydrocarbons from the Niobrara formation underlying the following described lands in the Bracewell Field, Weld County, Colorado and that said lands shall be subject to the provisions of Order No. 381-1.

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 Section 19: E/2 Sections 20 thru 23 Section 24: S/2 Sections 25 thru 29, 32 thru 36 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 16th day of July 1984, as of June 18, 1984.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary 2 --

(381-2)