IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE PLUM BUSH CREEK FIELD, WASHINGTON COUNTY, COLORADO

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CAUSE NO. 57

ORDER NO. 57-10

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 18, 1985 at 9:00 A.M., in Room 110, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Bert A. Lear, for an order pooling all interests in the drilling and spacing unit consisting of the SE1/4 NW1/4 Section 25, Township 2 South, Range 56 West, 6th P.M., Washington County, Colorado for the development and operation of the "J" Sand for the production of oil, gas and associated hydrocarbons underlying said unit, pursuant to 34-60-116 C.R.S. 1973, as amended.

FINDINGS

The Commission finds as follows:

1. Bert A. Lear, 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. The SE1/4NW1/4 Section 25, Township 2 South, Range 56 West, 6th P.M. has been established a drilling and spacing unit by the Commission by Order No. 57-9.

5. Effort has been made to obtain the voluntary pooling of all interests in said drilling unit for the development and operation thereof, but that it has not been possible to secure the agreement of all owners of interest in said unit for the voluntary pooling thereof.

6. Applicant is an "interested person" within the meaning of 34-60-116 (6), C.R.S., as amended, of the Oil and Gas Conservation Act of the State of Colorado.

7. In order to insure proper and efficient development of said drilling unit and to promote conservation of the oil and gas resources of the State, an order should be made pooling all interests in the 40-acre drilling unit described herein.

8. An order of the Commission pooling all interests in said drilling unit is necessary in order to afford each owner of interest in each said drilling unit the opportunity to recover and receive his just and equitable share of the oil, gas and associated hydrocarbons from the common source of supply underlying said drilling unit.

9. Production obtained from said drilling unit should be allocated to each tract therein on the basis of the proportion that the number of acres in each tract bears to the total number of acres within said drilling unit.

ORDER

NOW, THEREFORE, IT IS ORDERED, that [sic]1. Pursuant to the provisions of 34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act of the State of Colorado, all interests in the drilling and spacing unit consisting of the SE1/4NW1/4 Section 25, Township 2 South, Range 56 West, 6th P.M., Plum Bush Creek Field, Washington County, Colorado, are hereby pooled for the development of oil, gas and associated hydrocarbons from the "J" Sand underlying said unit.

2. The production obtained from said drilling unit shall be allocated to each owner therein in the unit to the total number of mineral acres within said drilling unit; each owner of an interest in said drilling unit shall be entitled to receive his share of the production of the well located on said drilling unit applicable to his interest in said drilling unit.

3. The non-consenting owner within said unit shall be treated as the owner of the landowner's royalty to the extent of 12.5% of his or her record title interest, whatever that interest may be, until such time as the consenting owner recovers, only out of the non-consenting owner's proportionate 87.5% share of production, the costs specified in C.R.S. 34-60-116 (7) (b), as amended. After recovery of such costs, the non-consenting owner shall then own his proportionate 8/8th share of the well, surface facilities and production, and then be liable for his proportionate share of further costs incurred in connection with the well as if he had originally agreed to the drilling.

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 11th day of March 1985, as of February 18, 1985.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary