REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 17, 1984 at 9:00 A.M., in Suite 380, Logan Tower Building, 1580 Logan Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Caribou Energy, Inc. for an order establishing two (2) 80-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying certain lands in Logan County, Colorado.

FINDINGS

The Commission finds as follows:

1. Caribou Energy, 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. Based upon the facts stated in the verified application and exhibits submitted, and receiving no objections, the Commission should enter an order establishing two (2) 80-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying the following described lands in Logan County, Colorado:

Township 10 North, Range 55 West, 6th P.M. Unit No. 1: Section 11: W/2SE/4 Unit No. 2: Sect ion 11: SE/4SE/4 Section 14: NE/4NE/4

5. In order to prevent the waste of oil and gas, as defined by law, to protect correlative rights of any 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 two (2) 80-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying the lands defined herein. The permitted well for Unit No. 1 should the Well No. 2 Lucky, located in the center of the W/2SE/4 of said Section 11 and the permitted well for Unit No. 2 should be at a location 200 feet from the south line and 660 feet from the east line of said Section 11 with a tolerance of 100 feet in any direction.

6. All available geological and engineering data concerning said "J" Sand indicate that one well could efficiently and economically drain an area of approximately 80-acres, and that the drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently and economically drained by one well producing from said "J" Sand.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or recompleted in the "J" Sand underlying certain lands in the White 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. Two (2) eighty-acre (80) drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the "J" Sand underlying the following described lands in Logan County, Colorado, to--wit:

Township 10 North, Range 55 West, 6th P.M.

Unit No. 1: Section 11- W/2SE/4 Unit No. 2: Section 11: SE/4SE/4 Section 14: NE/4NE/4

Rule 2. The permitted well for Unit No. 1 shall be Well No. 2 Lucky, located in the center of the W/2SE/4 of said Section 11, and the permitted well for Unit No. 2 shall be at a location 200 feet from the south line and 660 feet from the east line of said Section 11 with a tolerance of 100 feet in any direction.

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 June, 1985, as of December 17, 1984.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary