REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 19, 1981 at 9:00 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Amoco Production Co., for an order approving a Unit Agreement and Unit Operating Agreement providing for unit-operations of the Sussex Sand reservoir underlying a portion of the Spindle Field, and further to approve a fluid injection project which will initially be a waterflood pro-ject for secondary recovery purposes with newer recovery techniques tried at some future date.

FINDINGS

The Commission finds as follows:

1. Amoco Production Company, 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 Sussex Sand reservoir encountered in the Well No. 2 Leo Stairs "B" located in the NE/4NW/4 Section 20, Township 2 North, Range 66 West, 6th P.M., Weld County, Colorado, between the approximate depths of 4475 and 4610 feet subsurface, has been defined and determined by drilling as underlying the following described lands in Weld County, Colorado, to-wit:

Township 2 North, Range 66 West, 6th P.M. Section 17: S/2 S/2 Section 20: N/2, N/2 S/2 and that said reservoir constitutes a common source of supply; and that such lands should hereafter be referred to as the Northeast Spindle Sussex Sand Unit Area.

5. The Unit Agreement and Unit Operating Agreement as presented by Applicant, are necessary to increase the ultimate recovery of oil and gas from said reset voir, and that the terms provided therein are just and reasonable to all interests contained within said Sussex Sand Unit Area.

6. The proposed fluid injection project, which will initially be water injec-tion, and the use of other recovery techniques at some future date upon approval by the Director, for secondary recovery is necessary to increase the ultimate recovery of oil and gas, and that such operation, pursuant to said Unit Agreement and Unit Operating Agreement, will result in an estimated additional recovery of oil and gas with a value in excess of the estimated additional cost incident to conducting such operation.

7. Wells to be utilized as intake wells for the waterflood project are Well No. 1 Schmidt, NW/4 NE/4; Well No. 1 H & M Schmidt, SW/4 NE/4; Well No. B-2 Stairs, NE/4NW/4; and Well No. B-1 Stairs, SE/4 NW/4, all in said Section 20. The utilization of other wells in the unit area as intake wells when deemed necessary by the operator, should

(over) be upon approval of the Director, and upon compliance with the rules and regulations of the Commission.

8. Testimony presented at the hearing showed that said Unit Agreement and Unit Operating Agreement have been approved in writing by those persons who, under the agreement, will be required to pay at least eighty per cent (80%) of the costs of the unit operation, and also by the owners of at least eighty percent (80%) of the production or proceeds attributable to royalty, overriding royalty, and production payments.

ORDER

NOW, THEREFORE, IT IS ORDERED:

1. The Unit Agreement and Unit Operating Agreement covering lands in the Northeast Spindle Sussex Sand Unit Area, which agreements are attached to, and made a part of the original order of this Commission on file in the office of the Commission, are approved as being in the public interest for conservation.

2. The Sussex Sand reservoir, common source of supply, underlies the following described lands in Weld County, Colorado, to-wit:

Township 2 North, Range 66 West, 6th P.M. Section 17: S/2 S/2 Section 20: N/2, N/2 S/2 and such area shall hereafter be known as the Northeast Spindle Sussex Sand Unit Area.

3. The provisions contained in said Unit Agreement and Unit Operating Agreement as they pertain to 34-60-118 of the Oil and Gas Conservation Act are just and reasonable, and are incorporated herein as the Commission's plan of involuntary unit operations for such lands.

4. The Fluid injection project for the Sussex Sand reservoir of the North-east Spindle Sussex Sand Unit Area, as presented by Applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject into said reservoir through injection wells in such quantities as shall be reasonably determined by the operator to best achieve the maximum recovery of oil without waste. Injection wells shall be Well No. 1 Schmidt, NW/4 NE/4; Well No. H & M Schmidt, SW/4 NE/4; Well No. B-2 Stairs, NE/4 NW/4; and Well No. B-1 Sinits, SE/4 NW/4, all in said Section 20.

5. In the event that it becomes necessary in the future to convert additional producing wells to input wells; to plug and abandon certain wells in the Unit Area, or to drill additional producing or input wells as dictated by developments in the course of the operations of the waterflood, the Unit Operator is authorized to make such changes in the operation of the project as may be required to facilitate the efficient development thereof, including the use of other recovery techniques, subject to the approval of the Director and in compliance with the rules and regulations of the Commission.

IT IS FURTHER ORDERED, that the orders contained herein, 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 part of and/or all of the above orders.

ENTERED this 4th day of 1981 as of January 19, 1981.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary