REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on March 17, 1986 at 9:00 A.M., in Room 110, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Cache Exploration, Inc., for an order to amend Order No. 410-1 and allow the option to drill an additional well on each 80-acre drilling and spacing unit for the production of oil and associated hydrocarbons from the Codell formation underlying lands in the Greeley Field.

FINDINGS

The Commission finds as follows:

1. Cache Exploration, Inc., 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 February 17, 1984, the Commission authorized Order No. 410-1 to be issued which established 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Codell and Niobrara formations underlying lands in the Greeley Field, Weld County, Colorado. The units consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section with the permitted well located in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 200 feet in any direction. Multiple completion of wells in the Codell and Niobrara formations and where there is no difference in ownership between formations, commingling of production from said formations in the wellbore is allowed by Order No. 410-2.

5. Based on the facts stated in the verified application and exhibits submitted and receiving no objections, and having been reviewed by the Director as Hearing Officer on March 13, 1986 and recommended for approval, the Commission should enter an order allowing the option to drill an additional well on each 80-acre drilling and spacing unit for the production of oil and associated hydrocarbons from the Codell and Niobrara formations in the following described lands in the Greeley Field, Weld County, Colorado.

Township 6 North, Range 65 West, 6th P.M. Sections 19 thru 22: All Sections 27 thru 30: All

and that said additional well be located in the undrilled quarter section and made subject to the provisions of Order Nos. 410-1 and 410-2.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 410-1 and 410-2 are hereby amended and the following shall apply to wells drilled, completed or recompleted in the Codell and Niobrara formations underlying the lands described herein, in addition to other applicable rules and regulations and orders of the Commission heretofore adopted and not in conflict herewith:

Rule 1. The option to drill a second well, in addition to the permitted well as provided for by Order No. 410-1, is hereby authorized to be drilled on each 80-acre drilling and spacing unit for the production of oil and associated hydrocarbons from the Codell and Niobrara formations underlying the following described lands in of the Greeley Field, Weld County, Colorado, to-wit:

Township 6 North, Range 65 West, 6th P.M. Sections 19 thru 22: All Sections 27 thru 30: All

Rule 2. Said additional well shall be located in the undrilled quarter section and be subject to the provisions of Order Nos. 410-1 and 410-2.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

ENTERED this 4th day of April 2986, as of March 17, 1986.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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(410-3)