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 McCLAVE FIELD, KIOWA COUNTY, COLORADO	) ) ) )	CAUSE NO. 105 ORDER NO. 105-34

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 8:30 a.m. on July 17, 1995, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order allowing a well to be drilled and completed at an exception location for production from the McClave Sand, for a 640-acre drilling and spacing unit.

FINDINGS

The Commission finds as follows:

1.      Thomas L. Spring, as applicant herein, is an interested party in the subject matter of the above-referenced matter.

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 May 15, 1957, the Commission issued Order No. 105-1 which established 640-acre drilling and spacing units for the production of oil and associated hydrocarbons from the McClave Sand underlying certain lands in the McClave Field, with the units to consist of a governmental section, with the permitted well to be located no closer than 990 feet from the center of the drilling and spacing unit upon which it is located.  Subsequent Order No. 105-2 included additional lands under the McClave Field, including Section 25, Township 20 South, Range 48 West, 6th P.M.

5.      The Richards No. 1 Well was drilled in 1976 in the NE¼ SW¼ of Section 25, Township 20 South, Range 48 West, 6th P.M., for production from the McClave Sand and was plugged and abandoned after the well developed casing leaks in 1991.  It is estimated that 1 BCFG is still in place under Section 25.

6.      Geological and historical evidence presented at the administrative hearing indicated that the optimum location to obtain production would require locating a well equidistant from the existing producing wells in the offsetting drilling and spacing units while maintaining distance from the formation damage in the Richards No. 1 Well.

7.      That in order to protect correlative rights and to prevent waste, a well should be authorized to be drilled at an exception location 1980 feet FSL and 1000 feet FWL of Section 25, Township 20 South, Range 48 West, 6th P.M., for production from the McClave Sand, for the 640-acre drilling and spacing unit consisting of said Section 25.

8.      Based on the facts presented at the administrative hearing, and having received no protests to the application, the Hearing Officer recommends approval of the application.  The Commission should approve the request and amend Order No. 105-1 to allow an exception well to be drilled and completed for production from the McClave Sand in Section 25, Township 20 South, Range 45 West, 6th P.M.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order No. 105-1 is hereby amended and a well is authorized to be drilled at an exception location 1980 feet FSL and 1000 feet FWL of Section 25, Township 20 South, Range 48 West, 6th P.M., for production from the McClave Sand, for the 640-acre drilling and spacing unit consisting of said Section 25.

IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

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 August, 1995, as of July 17, 1995.

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

August 9, 1995