REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 18, 1983 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 Impel Energy Corporation for an order establishing a four-section drilling and spacing unit for the production of carbon dioxide from the Leadville and Ouray formations underlying certain lands in Dolores County, Colorado.

FINDINGS

The Commission finds as follows:

1. Impel Energy 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. Evidence presented at the hearing indicates that the Leadville and Ouray formations constitutes a common source of supply of carbon dioxide underlying the following described lands in Dolores County, Colorado, to-wit:

Township 40 North, Range 15 West, N.MP.M. Section 2: All Section 11: All Section 14: All Township 41 North, Range 15 West, N.MP.M. Section 36: All

5. In order to prevent waste, 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, an order should be made establishing a drilling and spacing unit consisting of approximately 2,637.75 acres for the production of carbon dioxide, common source of supply underlying the lands defined herein, with the permitted well for the four-section unit to be Well No. 41-44 Redd, located in the NE/4NE/4 Section 14, Township 40 North, Range 15 West, N.MP.M.

6. All available geological and engineering data concerning said Leadville and Ouray formations indicate that one well will efficiently and economically drain a drilling and spacing unit consisting of four-sections of land and that said drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently drained by one well producing from said Leadville and Ouray formations.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply to wells drilled, completed, or recompleted in the Leadville and Ouray formations underlying the Lone Mesa 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 four-section drilling and spacing unit consisting of approximately 2,637.75 acres, shall be and the same is hereby established for the production of carbon dioxide from the Leadville and Ouray formations underlying the following described lands in the Lone Mesa Field, Dolores County, Colorado, to-wit:

Township 40 North, Range 15 West, N.MP.M. Section 2: All Section 11: All Section 14: All

Township 41 North, Range 15 West, N.MP.M. Section 36: All

Rule 2. The permitted well for said unit shall be Well No. 41-14 Redd, located in the NE/4NE/4 Section 14, Township 40 North, Range 15 West, N.MP.M.

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

ENTERED this 17th day of February 1983, as of February 18, 1983.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

2 --(395-1)