REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 15, 1990 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Scout Energy corporation, for an order authorizing the drilling of an exception well to be located in the SW/4 of the SW/4 of Section 36, Township 9 North, Range 59 West, 6th P.M., Weld County, Colorado.

FINDINGS

The Commission finds as follows:

1. Scout Energy Corporation, 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 July 18, 1988, the Commission entered Order No. 451-7 and 459-3 which established the West Lilli Area as part of Lilli Field in so far as development of the Cretaceous "D" Sand is concerned and other orders entered by the Commission in Cause No. 451 established 80-acre drilling and spacing units which consist of the E/2 and W/2 or the N/2 and S/2 of a governmental quarter section with the permitted well to 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, with such established area including the S/2 of Section 36, Township 9 North, Range 59 West, 6th P.M., Weld County, Colorado.

5. That the matter was heard by the Hearing Officer after no protests to the application were received and that the Hearing Officer recommends that the application be approved.

6. That an order should be issued allowing an exception well to be drilled in the SW/4 of the SW/4 of said Section 36 to establish

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production from the "D" Sand underlying the unit consisting of the W/2 of the SW/4 of said Section 36.

ORDER

NOW THEREFORE, IT IS ORDERED, that an exception well shall be authorized at a location in the SW/4 SW/4 of Section 36, Township 9 North, Range 59 West, 6th P.M., Weld County, Colorado for the production of oil and associated hydrocarbons from the Cretaceous "D" Sand underlying the unit consisting of the W/2 of the SW/4 of said Section 36.

IT IS FURTHER ORDERED, that the above order shall become effective forthwith as the interested parties have agreed to be bound by the verbal order of the Commission.

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.

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ENTERED this day of ,

1990, as of , 1990.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Dennis R. Bicknell, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 June 15, 1990

0438I

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