REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 15, 1979 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 Texas Oil and Gas Corporation, for an order granting an exception to the spacing pattern established by Order No. 271-1 for the Wagon Trail Field, Bent County, Colorado.

FINDINGS

The Commission finds as follows:

1. Texas Oil and Gas Corporation, 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. On August 21, 1973, the Commission issued Order No. 271-1 which among other things, established 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Morrow formation underlying lands in the Wagon Trail Field, with the permitted well located no closer than 1320 feet to the bound-aries of the unit.

5. Evidence presented at the hearing indicates that a well, the No. 1 Pol-son, was drilled at a 10 carton 660 feet from the south line and 660 feet from the west line Section 10, Township 23 South, Range 48 West, 6th P.M., for the purpose of testing the Morrow formation for oil production. The well was not productive of oil; however, the Middle Sandstone member of the Morrow formation is capable of gas production. Said well should be considered an exception and be the permitted well for the unit consisting of said Section 10.

6. A well, the No. 1 Sniff "B" was drilled in 1974 at a location 2310 feet from the west line and 2310 feet from the north line Section 9, Township 23 South, Range 48 West, 6th P.M., and has produced gas from the Upper Sandstone member of the Morrow formation.

7. In order to offset any advantage said Well No. 1 Polson may have, and to prevent the production from the well of more than its just and equitable share and protect correlative rights, a restriction of production from said well should be considered.

8. In order to obtain additional information to determine the proper restriction, said Well No. 1 Polson should not be produced until the Middle Sandstone member of the Morrow formation of said Well No. 1 Sniff "B" is perforated and, that both wells should be produced for Sixty (60) days with production reports and periods of production submitted to the Commission; thereafter, the Commission should hold a further hearing to determine what restriction of production, if any, should be placed on the Well No. 1 Poison to offset the advantage said well may have.

(over)

ORDER

NOW, THEREFORE, IT IS ORDERED, that Well No. 1 Poison, located 660 feet from the south line and 660 feet from the west line Section 10, Township 23 South, Range 48 West, 6th P.M., shall be considered an exception to the spacing pattern as established by Order No. 271-1 and said well shall be the permitted well for the unit consisting of said Section 10.

IT IS FURTHER ORDERED, that in order to offset any advantage said Well No. 1 Poison may have as an exception well, and in order for the Commission to determine what the restriction of production, if any, shall be, additional information shall be obtained as follows:

1. Said Well No. 1 Poison shall be shut-in until Well No. 1 Sniff "B", located 2310 feet from the north line and 2310 feet from the west line Section 9, Town-ship 23 South, Range 48 West, 6th P.M. is completed in the Middle Sandstone member of the Morrow formation and then both wells shall be produced for a period of sixty (60) days. Production reports and periods of production shall be submitted to the Commis-

2. The Commission shall hold a further hearing to determine what restriction, if any, shall be applied to the Well No. 1 Poison [or the production of gas.

ORDERED this 15th day of October, 1979.

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

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