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 TO GOVERN OPERATIONS IN THE IGNACIO-BLANCO FIELD, LA PLATA, COLORADO

)

CAUSE NO. 1

ORDER NO. 1-36 (Formerly 1-146)

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 17, 1993 at 8:30 a.m., in the 2nd Floor Auditorium, Department of Transportation, 4201 East Arkansas Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Billy Ray and Louise Clary for an order to be issue to determine the amount of production proceeds which have not been paid and may be due the applicants from Amoco Production Company.

FINDINGS

The Commission finds as follows:

1. Billy Ray and Louise Clary, as applicants 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. On July, 1, 1990, through C.R.S. 34‑60‑118.5, the Colorado Oil & Gas Conservation Commission was given exclusive jurisdiction to determine several matters concerning the payment of proceeds derived from the sale of oil, gas or associated products from a well in Colorado including the following:

(a) The date on which payment of proceeds is due a payee under section (2) of the section;

(b) The existence or nonexistence of an occurrence pursuant to subsection (3) of this section which would justifiably cause a delay in payment; and

5. On May 27, 1992, Billy Ray Clary and Louise Clary, by their attorney, filed with the Commission, an application for an order to be issued to determine the amount of production proceeds which have not been paid and may be due to the applicants from Amoco Production Company by virtue of natural gas produced from the Clary No. 1 Well located in the SW¼ of Section 18, Township 34 North, Range 9 West, N.M.P.M., for the 320-acre drilling and spacing unit consisting of the S½ of Section 18. The order requested the Commission to direct Amoco Production Company to pay royalty payments on production from on the Clary No. 1 Well, plus simple interest at the rate specified by C.R.S. 34-60-118.5 (4), and any attorney fees and associated costs incurred.

6. On July 16, 1992, the applicants filed with the Commission a request to continue this matter to the August hearing and prior to the August hearing, the matter was rescheduled to the September hearing. On September 21, 1992, at the time of the hearing, the Commission determined that their jurisdiction was limited to whether timely payments were made by the payor to the applicants by Amoco Production Company. The Commission then directed both the applicant and the protestant to file affidavits with the Commission within fifteen (15) days from the September 21, 1992 hearing to show when payments were made and continued the matter to the October hearing.

7. Additional testimony was presented at the October hearing and the Commission directed the applicants to submit to both Amoco Production Company and to the Commission within thirty days, the amount of payment of proceeds they deemed due from Amoco Production Company. Amoco Production Company was directed to respond within twenty days to the Clarys' submittal and the applicant was given ten days to make a final response to the Amoco Production Company submittal. The Commission continued the matter to the January 21, 1993 hearing. No testimony was presented at the January 1993 hearing and the Commission continued the matter to the March 15, 1993 hearing.

8. At the March 15, 1993 hearing, the Commission directed that the information previously requested at the October hearing be submitted by both parties. The hearing was then continued until such information was submitted to the Commission. On March 30, 1993, Amoco Production Company, by its attorney, filed with the Commission the additional information requested. In addition, Amoco Production Company requested that the Commission dismiss the application due to the Clarys' failure to provide evidence to support their claim for payment of proceeds. The hearing in this matter was rescheduled to the May 17, 1993 meeting.

9. The Commission should dismiss the application of Billy Ray and Louise Clary for payment of proceeds for the Clary No. 1 Well with prejudice.

ORDER

NOW, THEREFORE, IT IS ORDERED that the application of Billy Ray and Louise Clary for an order to be issued to determine the amount of production proceeds which have not been paid and may be due the applicants from Amoco Production Company by virtue of natural gas produced from the Clary No. 1 Well located in the SW¹/₃ of Section 18, Township 34 North, Range 9 West, N.M.P.M. is hereby dismissed with prejudice.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

IT IS FURTHER ORDERED, that the Commission expressly reserved its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

ENTERED THIS 17^th day of June, 1993, as of May 17, 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

June 17, 1993