REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 16, 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 Mull Drilling Company for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow Sandstone formation underlying certain lands in Cheyenne County, Colorado.

FINDINGS

The Commission finds as follows:

1. Mull Drilling 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. Evidence presented at thehearing indicates that the Morrow Sandstone formation constitutes a common source of supply of oil and associated hydrocarbons underlying the following described lands in Cheyenne County, Colorado, to-wit:

Township 13 South, Range 49 West, 6th P.M. Sections 19 thru 21-28 thru 30, 31 thru 33 Township 13 South, Range 50 West, 6th P.M. Sections 24, 25 and 36 Township 14 South, Range 49 West, 6th P.M. Sections 4 thru 9 Township 14 South, Range 50 West, 6th P.M. Sections 1 and 12

5. In order to prevent the waste of oil and gas, as defined by law; to pro-tect 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 oil and gas resources of the State, an order should be made establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow Sandstone formation underlying the lands herein defined that said units should be 80-acres, more or less, consisting of the E/2 and W/2 of each quarter section according to the govern-mental survey thereof, and the permitted well located in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 150 feet in any direction.

6. All available geological and engineering data concerning said Morrow Sandstone formation indicate that one well will efficiently and economically drain an area of approximately 80-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 Morrow Sandstone.

(over)

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to wells drilled, completed, or re-completed in the Morrow Sandstone formation underlying the Sorrento 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. Eighty (80) acre drilling and spacing units shall be and the same are hereby established for the production of oil and associated hydrocarbons from the Morrow Sandstone formation underlying the following described lands in the Sorrento Field Cheyenne County, Colorado, to-wit:

Township 13 South, Range 49 West, 6th P.M. Sections 19 thru 21, 28 thru 30, 31 thru 33

Township 13 South, Range 50 West, 6th P.M. Sections 24, 25 and 36 Township 14 South, Range 49 West, 6th P.M. Sections 4 thru 9 Township 14 South, Range 50 West, 6th P.M. Sections 1 and 12

Rule 2. Said drilling units shall consist of eighty (80) acres, more or less, and each unit shall consist of the E/2 and W/2 of each quarter section according to the governmental survey thereof, with the permitted well located in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 150 feet in any direction.

IT IS FURTHER ORDERED, that the provisions contained in the above 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 order and rules.

ORDERED this 16th day of July, 1979.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(#349-1) DATE Of ENTRY 9/7/79