BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE APPLICATION OF

BAYSWATER EXPLORATION & PRODUCTION,

LLC FOR AN ORDER ESTABLISHING AN

APPROXIMATE 640-ACRE DRILLING AND

SPACING UNIT AND APPROVING TEN

HORIZONTAL WELLS WITHIN THE UNIT WITH

WELL LOCATION RULES FOR THE DRILLING

AND PRODUCING OF WELLS FROM THE

NIOBRARA AND CODELL FORMATIONS

COVERING THE S1/2 OF SECTION 33 AND THE

S1/2 OF SECTION 34, TOWNSHIP 7 NORTH,

RANGE 65 WEST, 6TH P.M., WATTENBERG

FIELD, WELD COUNTY, COLORADO

) Cause No. 407

)) Docket No. 190700488

)) Type: SPACING

))))))))

APPLICATION

Bayswater Exploration & Production, LLC ("Bayswater" or "Applicant"), Operator No. 10261,

on behalf of Bayswater Resources LLC and Bayswater Fund lll-A, LLC, by its attorneys, Welborn

Sullivan Meek & Tooley, P.C., respectfully submits this Application to the Oil and Gas Conservation

Commission of the State of Colorado ("Commission") for an order establishing an approximate

640-acre drilling and spacing unit for the S1/4 of Section 33 and the S1/4 of Section 34, Township 7

North, Range 65 West, 6th P.M., and approving ten horizontal wells within the unit, with well

location rules applicable to the drilling of wells and producing of oil, gas and associated

hydrocarbons from the Niobrara and Codell Formations. In support of its Application, Applicant

states:

Applicant is a Colorado limited liability company that is duly authorized to conduct

business in the State of Colorado and is a registered operator in good standing with the

Commission.

1.

Bayswater Resources LLC and Bayswater Fund lll-A, LLC own leasehold interests in

the following lands ("Application Lands") and have granted operating rights to Bayswater:

2.

Township 7 North. Range 65 West, 6th P.M.

Section 33: S1/4

Section 34: SVi

A reference map of the Application Lands is attached hereto.

On April 27, 1988, the Commission adopted Rule 31 8A, the Greater Wattenberg Area

Special Well Location, Spacing and Unit Designation Rule, which was amended on August 8, 201 1

3.

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to, among other things, address the drilling of horizontal wells and requires that a horizontal

wellbore spacing unit must include any governmental quarter-quarter section that are located lessthan 460' from the completed interval of the wellbore lateral. Rule 31 8A further allows for

overlapping horizontal wellbore spacing units. Rule 31 8A supersedes all prior Commission drilling

and spacing orders affecting well location and density requirements of the Greater WattenbergArea. The Rule does not, however, prohibit the establishment of drilling and spacing units withinthe Greater Wattenberg Area.

On August 20, 2012, the Commission entered Order No. 407-679, which pooled all

interests in an approximate 80-acre drilling and spacing unit for the W1/4SW% of Section 33,Township 7 North, Range 65 West, 6th P.M., and granted cost recovery pursuant to Section 34-60-

1 1 6(7)(b), C.R.S., against any nonconsenting owners in the Appaloosa 33-13 Well (API No. No.05-123-33003) and Appaloosa 33-14 Well (API No. API No. 05-123-32999), for the production of oil,gas, and associated hydrocarbons from the Codell and Niobrara Formations. The Appaloosa 33-13

Well and Appaloosa 33-14 Well are directional wells.

4.

On August 20, 2012, the Commission entered Order No. 407-696, which pooled all

interests in an approximate 160-acre designated wellbore spacing unit for the SWA of Section 33,Township 7 North, Range 65 West, 6th P.M., and granted cost recovery pursuant to Section 34-60-1 1 6(7)(b), C.R.S., against any nonconsenting owners in the Lamb 33-53 Well (API No. No. 05-123

33000), for the production of oil, gas, and associated hydrocarbons from the Codell and NiobraraFormations. The Lamb 33-53 Well (API No. No. 05-123-33000) is a vertical well.

5.

There are other vertical and/or directional wells within the above-described 640-acredrilling and spacing unit producing from the Niobrara and/or Codell Formations. Applicant requeststhat the Appaloosa 33-13 Well (API No. No. 05-123-33003), the Appaloosa 33-14 Well (API No.API No. 05-123-32999), the Lamb 33-53 Well (API No. No. 05-123-33000), and all other verticaland/or directional wells remain subject to their applicable Commission rules and orders such thatproceeds from the sale of oil or gas from those wells shall continue to be distributed based on theapplicable rules and orders.

6.

On May 16, 2013, the Commission approved a Form 2 Application for Permit-to-Drill

the Aim 33W-404 Well (API No. 05-123-37331), and thereby established a Rule 31 8A designatedhorizontal wellbore spacing unit for certain lands, including the Application Lands. The Aim 33W-404 Well was spud on April 24, 2015, and subsequently completed to the Codell Formation. TheAim 33W-404 Well lies outside of the Application Lands. Applicant requests that the Aim 33W-404Well continued to be governed by its applicable rules and orders.

7.

On May 16, 2013, the Commission approved a Form 2 Application for Permit-to-Drill

the Aim 33W-314 Well (API No. 05-123-37330), and thereby established a Rule 31 8A designatedhorizontal wellbore spacing unit for certain lands, including the Application Lands. The Aim 33W-314 Well was spud on April 16, 2015, and subsequently completed to the Niobrara Formation. TheAim 33W-314 Well lies outside of the Application Lands. Applicant requests that the Aim 33W-314Well continued to be governed by its applicable rules and orders.

8.

On February 18, 2016, the Commission approved two Form 2 Applications forPermit-to-Drill the following-described wells (the "Mach One Wells"), and thereby approved two

9.

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Rulle 31 8A designated horizontal wellbore spacing units for certain lands including the ApplicationLands:

Well Name API No.

Mach One E03-685 05-123-42791

Mach One E03-689 05-123-42794

The Mach One Wells were never spud. The Mach One Well APDs expired on February 17, 2018.

On July 26, 2016, the Commission approved eight Form 2 Applications for Permit-to-Drill the following-described wells (the "Teakwood Wells"), which were oriented within the

Application Lands:

10.

Well Name API No.

Teakwood EF 33-224HC 05-123-39403

Teakwood EF 33-229HN 05-123-39404

Teakwood EF 33-230HN 05-123-39405

Teakwood EF 33-222HN 05-123-39406

Teakwood EF 33-221 HN 05-123-39407

Teakwood EF 33-224HN 05-123-39408

Teakwood EF 33-227HN 05-123-39409

Teakwood EF 33-227HC 05-123-39410

The Teakwood Wells were never spud. The Teakwood Well APDs expired on July 25, 2018.

To promote efficient drainage of the Niobrara and Codell Formations within theApplication Lands and to assist in preventing waste, the Commission should establish anapproximate 640-acre drilling and spacing unit covering the below-described Application Lands,and should approve up to ten horizontal wells within the unit, for production of oil, gas andassociated hydrocarbons from the Niobrara and Codell Formations, with the treated interval ofeach wellbore permitted within the unit be located no closer than 150 feet from the treated intervalof any other wellbore producing from the same common source of supply, no closer than 150 feetfrom the eastern and western unit boundary, and no closer than 460 feet from the northern andsouthern unit boundaries, without exception having been granted by the Director:

11.

Township 7 North. Range 65 West, 6th P.M.

Section 33: SV2

Section 34: SVz

Applicant maintains that the Application will allow for efficient drainage of theNiobrara and Codell Formations, will prevent waste, will protect correlative rights, and will assure agreater ultimate recovery of oil, -gas and associated hydrocarbons.

12.

The drilling and spacing unit is not smaller than the maximum area that can bedrained by the wells within the unit drilled to the requested boundary setbacks, and Applicant'srequest will have no adverse effect on correlative rights of adjacent owners.

13.

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Applicant requests that the wells be drilled from no more than one surface location

located within the unit or at a legal location on adjacent lands.

14.

15. Applicant maintains that the wells permitted within the unit will be drilled in a east-

west orientation.

The names and addresses of the interested parties, pursuant to Rule 507.b.(1), Rule

507. c., and Rule 507. d., will be submitted to the Commission in accordance with Rule 507. a. (2).

Applicant certifies that copies of this Application will be served on all locatable interested parties at

least sixty (60) days prior to the date of the hearing for this Application, as required by Rule

507. a. (1).

16.

WHEREFORE, Applicant respectfully requests that this matter be set for hearing, that

notice be given as required by law and that, upon such hearing, this Commission enter its order

consistent with Applicant's proposals as set forth above.

Dated this 9th day of April, 2019.

Respectfully submitted,

WELBORN SULLIVAN MECK & TOOLEY, P.C.

By: /"t

Joseph C./Rierzchala

Geoffrey W. Storm

Welborn Sullivan Meek & Tooley, P.C.

1125 17th Street, Suite 2200

Denver, CO 80202

303-830-2500

jpierzchala@wsmtlaw.com

gstorm@wsmtlaw.com

Attorneys for Bayswater Exploration & Production LLC

Operator Representative:

Name:

E-Mail:

Phone:

Address:

Tyler Hammond, Landman, Bayswater Exploration & Production, LLC

thammond@bayswater.us

303-893-2503

730 17th Street, Suite 500

Denver, CO 80202

{00701499.1}

VERIFICATION

STATE OF COLORADO )) ss.

CITY & COUNTY OF DENVER )

Tyler Flammond, Landman with Bayswater Exploration & Production, LLC uponoath deposes and says that he has read the foregoing Application and that the

statements contained therein are true to the best of his knowledge, information andbelief.

BAYSWATER EXPLORATION &

PRODUCTION, LLC

\MA~ tTyler He mmond, Landman

Subscribed and sworn to before me Vns day of April, 2019 by TylerHammond, Landman for Bayswater Exploration & Production, LLC

Witness my hand and official seal.

STATE Of COLORADO

Notary Public j

My Commission Expires: £-/// *

5{00701499.1}

EXHIBIT A

INTERESTED PARTIES

Weld County Department of Planning Services

Jason Maxey

1555 North 17th Avenue

Greeley, CO 80631

Colorado Department of Public Health and Environment

Attn: Oil and Gas Liaison

4300 Cherry Creek Drive South

Denver, CO 80246-1500

Colorado Parks and Wildlife

Brandon Marette

Northeast Region Office

6060 Broadway

Denver, CO 80216

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

EXHIBIT A CONTINUED ON NEXT PAGE

6{00701499.1}

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BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE APPLICATION OF

BAYSWATER

PRODUCTION, LLC FOR AN ORDER

ESTABLISHING AN APPROXIMATE 640-

ACRE DRILLING AND SPACING UNIT AND

APPROVING TEN HORIZONTAL WELLS

WITHIN THE UNIT WITH WELL LOCATION

RULES FOR THE DRILLING AND

PRODUCING OF WELLS FROM THE

NIOBRARA AND CODELL FORMATIONS

COVERING THE S1/2 OF SECTION 33 AND

THE S1/2 OF SECTION 34, TOWNSHIP 7

NORTH, RANGE 65 WEST, 6TH P.M.,

WATTENBERG FIELD, WELD COUNTY,

COLORADO

) Cause No. 407

EXPLORATION & )) Docket No. 190700488

)) Type: SPACING

)))))))))

CERTIFICATE OF SERVICE

STATE OF COLORADO §§

CITY AND COUNTY OF DENVER §

I, Geoffrey W. Storm, of lawful age, and being first duly sworn upon my oath, state and

declare:

That I am the attorney for Bayswater Exploration & Production, LLC, and that on or

before May 30, 2019, I caused a true and correct copy of the Application and Notice of

Hearing to be deposited in the United States mail, postage prepaid, addressed to the

interested parties to the Application, as required by Commission Rul

and §34-60-108(4), C.R.S.

^.(1)^507.b.(2),

GeoffreyTA/.-^orm

Subscribed and sworn to before me Juw bp , 2019.

Witness my hand and official seal.

MELISSA A. MORMANNOTARY PUBLIC

STATE OF COLORADONOTARY ID 19894012434

My COMMISSION EXPIRES AUGUST 29. 2021 s

Notary Public ~My commission expires: t Agff / OC-Q I

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