REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 19, 1993, in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the application of Saturn Land Company, for an order to amend Cause No. 490 to allow a well to be drilled at an exception location in the SE1/4 SE1/4 of Section 2, Township 12 South, Range 51 West, 6th P.M., for the 80-acre drilling and spacing unit cons isting of the S1/2 SE1/4 of Section said 2, for production from the Morrow Formation.

FINDINGS

The Commission finds as follows:

1. Saturn Land Company as applicant herein, are interested parties 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. In Order No. 490-1 the Commission established 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow Formation underlying certain lands in the Speaker Field including Section 2, Township 12 South, Range 51 West, 6th P.M., with the units to consist of the N1/2 and S1/2 or the E1/2 and W1/2 of a governmental quarter section, with the permitted well to be located in the SW1/4 and the NE1/4 of each quarte r section and no closer than 400 feet from the boundaries of the unit. Further, the order allowed the Director to grant exceptions to well locations provided that the owners proposing to drill a well, file with the Commission a waiver or consent signed by the lease owner toward whom the well location is proposed to be moved or if the owner of the proposed well is also the owner of the lease on the property toward which the well is proposed to be moved, a waiver shall be obtained from the mineral interest owner of the lands covered by the offset lease.

5. This matter was heard by the Hearing Officers who recommend approval based upon the geological and geophysical testimony presented at the administrative hearing that an exception to the permitted well location is necessary in order to encounter a hydrocarbon-bearing zone in the Morrow Formation.

6. No objections to the application were received and an order of the Commission should be entered allowing a well to be drilled at an exception location in the SE1/4 SE1/4 of Section 2, Township 12 South, Range 51 West, 6th P.M., for the 80-acre drilling and spacing unit consisting of the S1/2 SE1/4 of Section said 2, for production from the Morrow Formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order No. 490-1 shall be amended to allow a well to be drilled at an exception location in the SE1/4 SE1/4 of Section 2, Township 12 South, Range 51 West, 6th P.M., for the 80-acre drilling and spacing unit consisting of the S1/2 SE1/4 of Section said 2, for production from the Morrow Formation.

IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

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 day of July, 1993, as of July 19, 1993.

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 July 30, 1993 ??

(490#2)