REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 21, 1980 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 Walter. S. Fees, Jr. and Willard Pease, for an order establishing 160-acre drilling and spacing units for the pro-duction of gas and associated hydrocarbons from the Dakota and Morrison formations underlying certain lands in Mesa County, Colorado.

FINDINGS

The Commission finds as follows:

1. Walter S. Fees, Jr. and Willard Pease, as applicants herein, are interested parties in the subject matter of the above-referenced hearing.

2. Due notice of the time, place and purpose or 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 the hearing indicates that the Dakota and Morri-son Formations each constitutes a common source of supply of gas and associated hydro-carbons underlying the following described lands in Mesa County, Colorado, to-wit:

Township 9 South, Range 103 West, 6th P.M. Section 15: All Section 21: All Section 16: All Section 22: All Township 2 North, Range 3 West, Ute P.M. Section 6: All Section 7: All

5. In order to prevent waste of oil and gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling or unnecessary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources, an order should be made establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Dakota and Morrison formations, each a common source of supply underlying the lands defined herein; that said units should be 160-acres and consist of a quarter section, according to the govern-mental survey, and the permitted well for each unit should be located in the NW/4 of each quarter section and the existing producing or producible wells should be designated as the permitted well for the unit upon which each is located, with additional wells located no closer than 1600 feet from an existing well. In addition, specific well locations should be designated as follows:

ToWnshiP 9 South, Range 103 West, 6th P.M.

Unit Well Location SE/4 Section 15 NW/4SE/4 NW/4 Section 15 NW/4NW/4 SE/4 Section 22 NW/4SE/4 SW/4 Section 22 SW/4SW/4

(over)

Township 2 North, Range 3 West, Ute P.M.

Unit Well Location Sections 6 & 7 All, except as noted below in the SE/4 of each quarter section NE/4 Section 6 SE/4NE/4

6. All geological and engineering data concerning the Dakota and Morri-son Formations indicate that one well will efficiently and economically drain an area of approximately 160-acres, and that the drilling unit or the size and shape hereinabove described is not smaller than the maximum area that can be efficiently drained by one well producing from said Dakota and Morrison Formations.

ORDER

NOW, THEREFORE IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to a well drilled, completed, or recompleted in the Dakota and Morrison formations underlying the lands in the Peachtree 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. One hundred-sixty (160) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the Dakota and Morrison formations underlying the following described lands in the Peachtree Field, Mesa County, Colorado, to-wit:

Township 9 South, Range 103 West, 6th P.M. Section 15: All Section,21: All Section 16: All Section 22: All Township 2 North, Range 3 West, Ute P.M. Section 6: All Section 7: All

Rule 2. Said drilling units shall consist of 160-acres and consist of a quarter section, according to the governmental survey. The permitted well shall be located in the NW/4 of each quarter section and the existing producing or producible wells shall be designated as the permitted well For the unit upon which each is located, with additional wells located no closer than 1600 feet from an existing well In addition, specific well locations shall be designated as Follows:

Township 9 South, Range 103 West, 6th P.M.

Unit Well Location SE/4 Section 15 NW/4SE/4 NW/4 Section 15 NW/4NW/4 SE/4 Section 22 NW/4SE/4 SW/4 Section 22 SW/4SW/4

Township 2 North, Range 3 West, Ute P.M.

Unit Well Location Sections 6 & 7 All, except as noted below in the SE/4 of each quarter section NE/4 Section 6 SE/4NE/4

IT IS FURTHER ORDERED, that the provisions contained in the above order and rules and regulations shall become effective forthwith.

2 --(#366-1)

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.

ENTERED this 23rd day July, 1980, as of July 21, 1980.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary -- 3 --(# 366 - 1 )