BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

                        This cause came on for hearing before the Commission at 9:00 a.m. on February 12, 2007, in Suite 801 The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to increase the number of wells which can be optionally drilled into and produced from the Williams Fork and Iles Formations for certain lands in Township 6 South, Range 91 West, 6^th P.M., the equivalent of one (1) Williams Fork and Iles Formation well per 20 acres, or sixteen (16) wells for the existing 320-acre drilling and spacing units, with each well located no closer than two hundred (200) feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.

                        The Commission finds as follows:

                        1. Orion Energy Partners, L.P. ("Orion"), 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 December 19, 1994, the Commission issued Order No. 513-2, which among other things, established 320-acre drilling and spacing units for production of gas and associated hydrocarbons from the Williams Fork Formation within the Mesaverde Group and allowed additional wells, up to eight (8) per unit, to be drilled on the 320-acre units, with the permitted wells to be located no closer than four hundred (400) feet from the boundaries of the unit and no closer than eight hundred (800) feet from another Williams Fork Formation well. A portion of the Application lands being, Township 6 South, Range 91 West, Sections 8 and 17, are subject to this 320-acre drilling and spacing unit order.

                        5. Rule 318a. of the Rules and Regulations of this Commission requires that wells drilled in excess of two thousand five hundred (2,500) feet in depth be located not less than six hundred (600) feet from any lease line, and located not less than one thousand two hundred (1,200) feet from any other producible or drilling oil or gas well when drilling to the same common source of supply. Rule 318a. is applicable to the Application lands for production from the Iles Formation.

                        6. On December 22, 2006, Orion, by its attorney, filed with the Commission a verified application for an order to allow the equivalent of one (1) well per 20 acres to be drilled in four (4) existing 320-acre units and also in unspaced lands subject to Rule 318a. as follows:

                        That as to all future Williams Fork Formation or Iles Formation wells to be drilled upon the application lands, each well may be located anywhere downhole in the established drilling and spacing unit but no closer than two hundred (200) feet from the boundaries of the unit or two hundred (200) feet from any lease line in unspaced areas, without exception being granted by the Director.

                        7. Testimony and exhibits presented at the administrative hearing conducted under Rule 511.b. showed that Orion has the right to earn Williams Fork Formation and Iles Formation in the application lands.

                        8. Testimony and exhibits presented at the administrative hearing showed that the Williams Fork and Iles Formations are subsections of the Mesaverde Group.

                        9. Testimony and exhibits presented at the administrative hearing showed that the Williams Fork Formation is between three thousand three hundred (3300) feet and three thousand five hundred (3500) feet thick in the application area, and the average Williams Fork sand body is five hundred twenty eight (528) in width.  The underlying Iles Formation is approximately one thousand (1000) feet thick.

                        10. Testimony and exhibits presented at the administrative hearing showed that the estimated original gas in place for the Williams Fork Formation for the application lands is in the sixty-three (63) BCF per section range and that the estimated Iles Formation reserves for the application lands are additive thereto.

                        11. Testimony and exhibits presented at prior administrative hearings of which the Commission took administrative notice, showed that core data indicates the average porosity of the Iles Formation is six percent (6%) and the average permeability is 0.009 millidarcies.

                        12. Testimony and exhibits presented at prior administrative hearing(s) showed that hydraulically induced fractures will propagate in a northwest-southeast orientation, creating an elliptical northwest-southeast drainage pattern in the application area.

                        13. Testimony and exhibits presented at the administrative hearing showed that current well density will not effectively drain the Williams Fork and Iles Formations.

                        14. Testimony and exhibits presented at the administrative hearing showed that increasing well density to 20 acres in the application area will increase the estimated ultimate incremental recovery.

                        15. Testimony and exhibits presented at the administrative hearing showed that increasing well density to 20 acres in the application area will also increase the estimated ultimate recovery from the Iles Formation. Additional testimony indicated that Iles Formation wells could not be economically drilled as "stand alone" wells and that Williams Fork Formation wells would be deepened to the Iles Formation.

                        16. No protests to the application were filed with the Commission or the Applicant.

17. Orion agreed to be bound by oral order of the Commission.

18. Based on the facts stated in the verified application, having received no protests and have been heard by the Hearing Officer who recommended approval, the Commission should approve the application.

                        NOW, THEREFORE, IT IS ORDERED, that additional wells are hereby allowed to be optionally drilled into and produced from the Williams Fork and Iles Formations, for the below-listed lands, the equivalent of one Williams Fork and Iles Formation well per 20 acres for those lands subject to Rule 318a., or sixteen wells within each existing 320-acre drilling and spacing unit, with each well located no closer than 200 feet from the boundaries of the unit or from a lease line for lands subject to Rule 318a., without exception being granted by the Director of the Oil and Gas Conservation Commission:

                        IT IS FURTHER ORDERED, that wells to be drilled under this Application shall be drilled from the surface either vertically or directionally from no more than one well pad located on a given quarter quarter section unless exception is granted by the Director of the Colorado Oil and Gas Conservation Commission, and that both the Williams Fork and Iles Formations shall be reached from a single wellbore, i.e., separate wells shall not be drilled to reach each formation.

                        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.

                        IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.

                        IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.

                        ENTERED this ______ day of February, 2007, as of February 12, 2007.

OIL AND GAS CONSERVATION COMMISSION

                OF THE STATE OF COLORADO

By____________________________________

Patricia C. Beaver, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

February , 2007