REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on March 16, 1992 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 application of Martin Exploration Management Company for an order granting an exception to the permitted well location as provided for in Order No. 467-6 for production of oil, gas and associated hydrocarbons from the "J" Sand and Dakota Form ations underlying the NW1/4 of Section 17, Township 1 South, Range 68 West, 6th P.M.

FINDINGS

The Commission finds as follows:

1. Martin Exploration Management Company, 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 16, 1991 the Commission issued Order No. 467-6, which among other things, established 160-acre drilling and spacing units for certain lands in the Wattenberg Field, for production of gas and associated hydrocarbons from the "J" Sand Formation no closer than 990 feet from the boundaries of the quarter section. The NW1/4 of Section 17, Township 1 South, Range 68 West, 6th P.M., Adams County, Colorado lies within the area spaced by this order.

5. On February 19, 1992, the Commission issued Order No. 467-9 which established identical drilling and spacing units for production of oil, gas and associated hydrocarbons from the Dakota Formation as those previously established in Order No. 467-6 for the "J" Sand Formation, and allowed the downhole commingling of production from the Dakota Formation with production from the "J" Sand Formation. The NW1/4 of Section 17, Township 1 South, Range 68 West , 6th P.M., Adams County, Colorado lies within the area spaced by this order.

6. A protest was filed by Charles and Linda Swain, Kenneth and Maxine Spruce, Ralph Spruce, Mark and Jodell Mossoni and Norman and Alice Spruce. After testimony at the time of hearing, the Commission determined that an order should be entered allowing a well to be drilled at the above-described exception location.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that an exception to the permitted well location as provided for in Order Nos. 467-6 and 467-9 for the Wattenberg Field is hereby granted for the Fedorowicz No. 2-17 Well to be drilled 1100 feet FNL and 2200 feet FWL in the NW1/4 of Section 17, Township 1 South, Range 68 West, 6th P.M., Adams County, Colorado, for the production of oil, gas and associated hydrocarbons from the "J" Sand and Dakota Formations for the 160-acre drilling and spacing unit consisting of the NW1/4 of said Section 17.

IT IS FURTHER ORDERED, that if a commercial well shall be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantages which the person securing the exception may have over other producers by reason of drilling the well as an exception, including suitable provisions to prevent the production from the well drilled as an exception of more than its just and equitab le share of the oil and gas in the pool.

IT IS FURTHER ORDERED, that the provision 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 day of , 1992, as of March 16, 1992.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 April 7, 1992 C:\WP51\ORDERS\467-10 ??