BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION AND ) CAUSE NO. 523

ESTABLISHMENT OF FIELD RULES TO GOVERN )

OPERATIONS IN THE MAMM CREEK FIELD, ) ORDER NO. 523-2

GARFIELD COUNTY, COLORADO )

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 10:00 a.m. on October 31, 2005, in the Ramada Inn & Suites, 124 West 6^th Street, Glenwood Springs, Colorado, for an order to establish 320-acre drilling and spacing units for certain lands in Township 6 South, Range 92 West, 6^th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group, allowing the equivalent of one well per ten (10) acres, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.

FINDINGS

The Commission finds as follows:

1. Antero Resources Corporation ("Antero Resources"), 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. Rule 318.a. of the Rules and Regulations of the 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, unless authorized by order of the Commission upon hearing. The below-listed lands are subject to this Rule:

Township 6 South, Range 92 West, 6^th P.M.

Sections 9 and 10: S½

Sections 14 and 15: N½

5. On September 6, 2005, Antero Resources, by its attorney, filed with the Commission a verified Application for an order to establish 320-acre drilling and spacing units for the below-described lands, for production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group, the equivalent of one well per ten (10) acres, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission. In cases where the application lands abut or corner lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill 10-acre density Williams Fork Formation wells, the well should be located downhole no closer than 200 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission. That, except as previously authorized by order of the Commission, wells to be drilled under this application will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Colorado Oil and Gas Conservation Commission pursuant to application made for such exception.

Township 6 South, Range 92 West, 6^th P.M.

Sections 9 and 10: S½

Sections 14 and 15: N½

6. Testimony and exhibits presented at the administrative hearing indicated that Antero Resources has a 100% leasehold in the majority of the application lands.

7. Testimony and exhibits presented at the administrative hearing showed the geological nature of the Williams Fork Formation and the extent of typical Williams Fork Formation sands in the application area.

8. Testimony and exhibits presented at the administrative hearing showed that increased well density has increased gas production which would increase the ultimate gas recovery from the Williams Fork Formation in the Mamm Creek Field.

9. Testimony and exhibits presented at the administrative hearing showed that increasing well density from twenty (20) to ten (10) acres would increase estimated ultimate recovery and that drilling wells would be economic in the application lands.

10. The above-referenced testimony and exhibits show that the proposed spacing and density will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery and will not violate correlative rights.

11. Antero Resources Corporation agreed to be bound by oral order of the Commission.

12. Based on the facts stated in the verified application, having received no protests and having been heard by the Hearing Officer who recommended approval, the Commission should enter an order to establish 320-acre drilling and spacing units for certain lands in Township 6 South, Range 92 West, 6^th P.M., for production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group.

ORDER

NOW, THEREFORE IT IS ORDERED, that 320-acre drilling and spacing units are hereby established for the below-described lands, for production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group, allowing the equivalent of one well per ten (10) acres, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.

Township 6 South, Range 92 West, 6^th P.M.

Sections 9 and 10: S½

Sections 14 and 15: N½

IT IS FURTHER ORDERED, that in cases where the application lands abut or corner lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill 10-acre density Williams Fork Formation wells, the well shall be located downhole no closer than 200 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.

IT IS FURTHER ORDERED, that, except as previously authorized by order of the Commission, wells to be drilled under this application shall be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Colorado Oil and Gas Conservation Commission pursuant to application made for such exception.

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 November, 2005, as of October 31, 2005.

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

November 30, 2005