REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 16, 1977 at 9 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing, as required by law, on the application of Martin Oil Service, Inc., for an order to allow the drilling of an additional well on each 80-acre drilling and spac-ing unit for production of oil and associated hydrocarbons from the Shannon formation underlying the S/2 Section 24, Township 2 North, Range 68 West, 6th P.M. The applica-tion was amended at the hearing to not include an additional well location in the NW/4 SW/4 of said Section 24.

FINDINGS

The Commission finds as follows:

1. That due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

2. That 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.

3. That on February 16, 1976, the Commission issued its Order No. 250-12 for the Spindle Field which, among other things, revised the spaced area for the Spindle Field and established 80-acre drilling and spacing units for the production of oil and gas from the Sussex and Shannon formations underlying said field. The order was amended by Order No. 250-22 which allowed the drilling of an additional well in each 80-acre drilling unit in the Spindle Field. However, certain lands were not included as part of the area where additional drilling is allowed; the S/2 Section 24, Township 2 North, Range 68 West, 6th P.M. being such lands not included.

4. That evidence presented at the hearing indicates that one well will not adequately drain an area of 80-acres from the Shannon formation, therefore, additional wells should be allowed to be drilled at locations in the center of the NE/4 SE/4 (to be directionally drilled to avoid a surface hazard), NW/4 SE/4 and the SE/4 SW/4 of said Section 24, with a tolerance of 200 feet to avoid surface hazards or obstructions.

ORDER

NOW, THEREFORE IT IS ORDERED, that additional wells are hereby authorized to be drilled on three (3) of the 80-acre drilling and spacing units previously established in the S/2 of Section 24, Township 2 North, Range 68 West, 6th P.M., for the production of oil and associated hydrocarbons from the Shannon formation. Such addi-tional wells shall be located in the center of the NE/4 SE/4 (to be directionally drilled from surface location), the center of the NW/4 SE/4 and the SE/4 SW/4 of said Section 24, with a tolerance of 200 feet in any direction to avoid surface hazards or obstructions. . (over)

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

ORDERED this 16th day of May, 1977.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

-- 2 --(#250-14)