IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE PEACE PIPE FIELD, ARAPAHOE COUNTY, COLORADO Cause No. 259 Order No. 259-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 17, 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 Amoco Production Co. for an order establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying certain lands in Arapahoe 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 "J" Sand con-stitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Arapahoe County, Colorado, to-wit:

Township 4 South, Range 62 West, 6th P.M. Section 34: E/2 Section 35: All Section 36: All

Township 5 South, Range 62 West, 6th P.M. Section 1: All Section 2: All Section 3: All

4. That in order to prevent the waste of gas and oil, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unneces-sary wells, and to insure proper and efficient development and promote conservation of the gas and oil resources of the State, an order should be made establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand, common source of supply underlying the lands defined herein; that said units should be 320-acres, more or less, and consisting of the E/2 and W/2 or the N/2 and S/2 of each section, according to the governmental survey thereof, which drilling units should be designated at the time of filing the permit to drill; and that the S/2 Section 35, Township 4 South, Range 62 West, N/2 Section 2 and the S/2 Section 3, Township 5 South, Range 62 West, 6th P.M., should be designated as drilling and spacing units; that the permitted well for each unit be located in the NW/4 and SE/4 of each section and no closer than 660 feet to the boundaries of the quarter section upon which it is located; and further provi-ding that the Director may, without additional notice and hearing, grant exceptions to the permitted well locations to avoid surface hazards or obstructions, provided the owners of the contiguous and cornering drilling units toward which the well location is to be moved, file a waiver or consent in writing agreeing to said exception. (over)

5. That all available geological and engineering data concerning said "J" and indicate that one well will efficiently and economically drain an area of approxi-mately 320 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 "J" Sand.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to wells drilled, completed, or recompleted in the "J" Sand underlying the Peace Pipe Field herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. Three Hundred Twenty (320) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydro-carbons from the "J" Sand underlying the following described lands in the Peace Pipe Field, Arapahoe County, Colorado, to-wit:

Township 4 South, Range 62 West, 6th P.M. Section 34: E/2 Section 35: All Section 36: All

Township 5 South, Range 62 West, 6th P.M. Section 1: All Section 2: All Section 3: All

Rule 2. Said drilling units shall consist of three hundred twenty (320) acres, more or less, and each such drilling unit shall be the E/2 and W/2 or the N/2 and S/2 of each section according to the governmental survey thereof, which drilling units shall be designated at the time of filing the permit to drill; and that the S/2 Section 35, Township 4 South, Range 62 West, N/2 Section 2 and the S/2 Section 3, Township 5 South, Range 62 West, 6th P.M., shall be designated as drilling and spacing units; that the permitted well for each unit be located in the NW/4 and SE/4 of each section and no closer than 660 feet to the boundaries of the quarter section upon which it is located; and further provi-ding that the Director may, without additional notice and hearing, grant exceptions to the permitted well locations to avoid surface hazards or obstructions, provided the owners of the contiguous and cornering drilling units toward which the well location is to be moved, file a waiver or consent in writing agreeing to said exception.

IT IF FURTHER ORDERED, that the provisions contained in the above orders 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 and regulations.

ORDERED this 17th day of October, 1972.

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

(#259-1)