REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 20, 1982 at 9:00 kkktt in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Intercontinental Energy Corporation, for an order establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying certain Lands in Arapahoe County, Colorado. The application was amended at the hearing concerning the permitted well location.

FINDINGS

The Commission finds as follows-

1. Intercontinental Energy Corporation, as applicant herein, is an interested party in the subject matter of the ore-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 J" Sand constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Arapahoe County, Colorado, to-wit:

Township 4 South, Range 64 West, 6th rrrtt Section 9: SW/4, E/2 Section 22:All Section 10: All Section 23:NW/4 Section 11: W/2 Section 27:NW/4 Section 14: W/2 Section 28:All Section 15: All Section 29:All Section 16: All Section 30:E/2 Section 17: SW/4, E/2 Section 31:NE/4 Section 19: E/2 Section 32:N/2 Section 20: All Section 33:NW/4 Section 21: All

5. In order to prevent waste of oil and gas, as defined by Law; to protect the 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, an order should be made establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand, a common source of supply underlying the lands defined herein; that said units should be 160-acres and consist of a quarter section, according to the governmental survey, and the permitted well for reach unit should be located no closer than 600 feet from the boundaries of the unit, and no closer than 2400 feet from another well producing from the same formation. Existing wells and locations should be considered the permitted wells for the units upon which they are located.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the "J" Sand underlying the Chalice Field herein described, in addition to other applicable rules and regulations and (*) Of the Commission, if any, heretofore adopted and not in conflict with.

Rule 1. One hundred-sixty (160) acre drilling and spacing (*) shall be and the same is hereby established for the production of (*)gas and associated hydrocarbons from the"J" Sand underlying the following described lands in the Chalice Field, Arapahoe County, Colorado, to-wit:

Township 4 South, Range 64 West, 6th rrrtt Section 9: SW/4, E/2 Section 22:All Section 10: All Section 23:NW/4 Section 11: W/2 Section 27:NW/4 Section 14: W/2 Section 28:All Section 15: All Section 29:All Section 16: All Section 30:E/2 Section 17: SW/4, Section 31:NE/4 E/2 Section 19: E/2 Section 32:N/2 Section 20: All Section 33:NW/4 Section 21: All

Rule 2. Said drilling units shall consist of 160-acres and (*)of a quarter section, according to the governmental survey, and permitted well for each unit shall be located no closer than 600 feet (*)the boundaries of the unit, and no closer than 2400 feet from (*) well producing from the same formation. Existing wells and (*) shall be considered the permitted wells for the units upon (*)they are located.

IT IS FURTHER ORDERED, that the provisions contained in the (*) order and rules and regulations shall become effective forthwith.

IT IS FURTHER ORDERED, that the Commission expressly (*) its right, after notice and hearing, to alter, amend or repeal and/or all of the above order.

ENTERED this 17th day of January as of December 20, 1982.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

* original data missing. (393-1)