IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE LEFT HAND FIELD, KIOWA COUNTY, COLORADO Cause No. 252 Order No. 252-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 18, 1972, at 9 A.M., in Room 132, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Arapaho, Petroleum, Inc., for an order establishing 640-acre drilling units for production of gas from the Keyes (Lower Morrow) Sandstone underlying certain lands in Kiowa County, Colorado.

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 evidence presented at the hearing indicates that the Keyes (Lower Morrow) Sandstone constitutes a common source of supply of gas and associated hydro-carbons underlying the following described lands in Kiowa County, Colorado, to-wit: Township 18 South, Range 47 West, 6th P.M. Section 17: SW/4 Section 28: All Section 18: S/2 Section 29: All Section 19: All Section 30: All Section 20: All Section 31: All Section 21: W/2 SE/4 Section 32: All Section 22: SW/4 Section 33: All Section 26: W/2 Section 34: All Section 27: All Section 35: W/2 Township 18 South, Range 48 West, 6th P.M. Section 13: S/2 Section 25: All Section 14: SE/4 Section 26: E/2 Section 23: E/2 Section 35: NE/4 Section 24: All Section 36: N/2, SE/4 Township 19 South, Range 47 West, 6th P.M. Section 2: NW/4, SW/4 Section 5: N/2, SE/4 Section 3: N/2, SE/4 Section 6: N/2 Section 4: N/2, SW/4 Township 19 South, Range 48 West, 6th P.M. Section 1: NE/4 (over)

4. That in order to prevent waste of gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unnecessary wells. and to insure proper and efficient development and promote conservation of the gas re-sources of the State, an order should be made establishing 640-acre drilling units for the production of gas and associated hydrocarbons from the Keyes (Lower Morrow) Sandstone, a common source of supply underlying said lands, as defined herein; that said drilling units should consist of 640 acres and the permitted well for any such unit should be located within a radius of 1320 feet of the center of such units.

5. That all available engineering data concerning said Keyes (Lower Morrow) Sandstone indicate that one well will efficiently and economically drain an area of approxi-mately 640 acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently and economically drained by one well producing from said Keyes (Lower Morrow) Sandstone.

6. That the wells No. 1-E Merrick, located in the center of the NE/4 NE/4 Section 33; No. 1 Teal, located in the center of the NW/4 SW/4 Section 28; and No. 1 Wilcox, located in the center of the NE/4 Section 34; all in Township 18 South, Range 47 West, 6th P.M., which are already drilled, be the permitted wells for the drilling units upon which they are located.

ORDER

NOW, THEREFORE, IT IS ORDERED that the following rules and regula-tions shall apply to wells heretofore and hereafter drilled and completed or recompleted in the Keyes (Lower Morrow) Sandstone, as herein defined, in addition to other rules, regulations, and orders of the Commission heretofore adopted and not in conflict herewith:

Rule 1. Six Hundred Forty (640) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the Keyes (Lower Morrow) Sandstone, common source Of supply underlying the lands as described in Finding 3 herein, and said units shall be numbered and described as fol-lows: Kiowa County, Colorado, 6th P.M. Unit Description Unit Description Unit Description --------------------------------------------------------------------------------T 18S, R 47W T 18S, R 47W T 18S, R 47W 1 Sec. 27: SW/4 4 Sec. 19: SE/4 6 Sec. 29: SW/4 Sec. 28: SE/4 Sec. 20: SW/4 Sec. 30: SE/4 Sec. 33: NE/4 Sec. 29: NW/4 Sec. 31: NE/4 Sec. 34: NW/4 Sec. 30: NE/4 Sec. 32: NW/4 T 18S, R 47W T 18S, R 47W T 18S, R 47W 2 Sec. 28: W/2 5 Sec. 19: SW/4 7 Sec. 32: E/2 Sec. 29: E/2 Sec. 30: NW/4 Sec. 33: W/2 T 18S, R 47W T 18S, R 48W T 18S, R 47W 3 Sec. 34: E/2 Sec. 24: SE/4 8 Sec. 26: W/2 Sec. 35: W/2 Sec. 25: NE/4 Sec. 27: E/2

- 2 - (#252

Unit Description Unit Description Unit Description --------------------------------------------------------------------------------T 18S, R 47W T 18S, R 48W T 19S, R 47W 9 Sec. 21: SE/4 14 Sec. 23: SE/4 Sec. 6: NW/4 Sec. 22: SW/4 Sec. 24: SW/4 Sec. 27: NW/4 See. 25: NW/4 T 18S, R 47W Sec. 28: NE/4 Sec. 26: NE/4 18 Sec. 31: SE/4 T 18S, R 47W T 18S, R 48W Sec. 32: SW/4 10 Sec. 20: E/2 15 Sec. 25: SW/4 T 19S, R 47W Sec. 21: W/2 Sec. 26: SE/4 Sec. 35: NE/4 Sec. 5: NW/4 T 18S, R 47W Sec. 36: NW/4 Sec. 6: NE/4 11 Sec. 17: SW/4 T 18S, R 48W T 19S, R 47W Sec. 18: SE/4 Sec. 19: NE/4 16 Sec. 25: SE/4 19 Sec. 4: W/2 Sec. 20: NW/4 Sec. 36: NE/4 Sec. 5: E/2 T 18S, R 47W T 18S, R 47W T 18S, R 47W 12 Sec. 18: SW/4 Sec. 30: SW/4 20 Sec. 34: SW/4 Sec. 19: NW/4 Sec. 31: NW/4 Sec. 35: SE/4 T 18S, R 48W T 18S, R 48W T 19S, R 47W Sec. 13: SE/4 17 Sec. 36: SE/4 Sec. 3: NW/4 Sec. 24: NE/4 Sec. 4: NE/4 T 18S, R 47W T 18S, R 48W T 19S, R 47W Sec. 31: SW/4 13 Sec. 13: SW/4 21 Sec. 2: W/2 Sec. 14: SE/4 T 19S, R 48W Sec. 3: E/2 Sec. 23: NE/4 Sec. 24: NW/4 Sec. 1: NE/4 and the permitted well for each drilling and spacing unit shall be located within a radius of 1320 feet of the center of such units.

IT IS FURTHER ORDERED that the wells already drilled be considered ex-ceptions where applicable and be the permitted wells for the units as follows: Unit No. 1, Well No. 1-E Merrick, located in the C NE/4 NE/4 Section 33, Township 18 South, Range 47 West, 6th P.M.; Unit No. 2, Well No. 1 Teal, located in the C NW/4 SW/4 Section 28, Township 18 South, Range 47 West, 6th P.M.; and Unit No. 3, Well No. 1 Wilcox, located in the C NE/4 Section 34, Township 18 South, Range 47 West, 6th P.M.

IT IS FURTHER ORDERED, that this 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, rules, or regulations.

ORDERED this 18th day of April 1972.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO By Frank J. Piro, Secretary

3 - (#252-1)