IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE McCLAVE FIELD, BENT AND KIOWA COUNTIES, COLORADO Cause No. 105 Order No. 105-6

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 21, 1963, at 10 ato., in Room 132, State Services Building, Denver, Colorado, after publication of Notice of Hearing as required by law, on the application of the Frankfort Oil Com-pany, a Division of Joseph E. Seagram & Sons, for an order establishing drilling un-its of approximately 640 acres for production of gas from the Upper Morrow Sand un-derlying certain lands in the McClave Field, Bent and Kiowa Counties, Colorado. At the hearing, the Frankfort Oil Company amended its application as to area and the size of the drilling unit comprised of Section. 5, so as to delete the south 320 acres from said Section 5, Township 21 South, Range 48 West, 6th P.M., Bent County.

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 Upper Morrow Sand constitutes a common source of supply of gas underlying the following described lands in Bent and Kiowa Counties, Colorado, to-wit:

Township 20 South, Range 48 West, 6th P.M. Kiowa County, Colorado Section 31: All Section 33: All Section 32: All Section 34: All Township 21 South, Range 48 West, 6th P.M. Bent County, Colorado Section 1: S/2 (South 320 acres) Section 2: All Section 9: All Section 3: All Section 10: All Section 4: All Section 11: All Section 5: Lots 1 through 10, inclusive

4. That in order to prevent waste of gas, 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 of the gas resources of the State, an order should be made establishing drilling units of approximately 640 acres for the production of gas from the Upper Morrow Sand, that sandstone member of the Morrow formation of Pennsylvanian Age cor-relative with that found between 4685 feet and 4703 feet in the State-Bock #1 Well, located in the SW/4NE/4 of Section 31 Township 20 South, Range 48 West, 6th P.M., Kiowa County, Colorado, common source of supply underlying the lands as defined herein; that said units should be approximately 640 acres consisting of complete sections according to the governmental survey thereof, except that in the irregular Sections 1, 2, 3, 4 and 5 of Township 21 South, Range 48 West, Bent County, Colo-rado, the drilling units should be comprised as set forth in the following order; and that the permitted well for each such drilling unit should be located within a radius of 990 feet from the center of the drilling unit upon which it is located, except with respect to the drilling unit comprising the S/2 of Sections 1 and 2, in which the per-mitted well should be located not less than 990 feet from the boundary lines thereof.

5. That all available geological and engineering data concerning said Up-per Morrow Sand indicate that one well will adequately and efficiently drain an area of approximately 640 acres of land in said formation.

6. That all wells drilled, and all locations approved by the Commission prior to May 21, 1963, should be the permitted wells or locations for the respective drilling units.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply to wells heretofore and hereafter drilled and completed or recom-pleted in the Upper Morrow Sand of the McClave Field, as defined herein, in addi-tion to other applicable rules, regulations and orders of the Commission heretofore adopted and not in conflict herewith:

Rule 1. Drilling units of approximately 640 acres shall be, and the same are hereby established for- the production of gas from said Upper Morrow Sand, com-mon source of supply underlying the following described lands in Bent and Kiowa Counties, Colorado, to-wit:

Township 20 South, Range 48 West, 6th P.M. Kiowa County, Colorado Section 31: All Section 33: All Section 32: All Section 34: All Township 21 South, Range 48 West, 6th P.M. Bent County, Colorado Section 1: S/2 (South 320 acres) Section 2: All Section 9: All Section 3: All Section 10: All Section 4: All Section 11: All Section 5: Lots 1 through 10, inclusive

Rule 2. Said units shall consist of approximately 640 acres, comprising a complete section according to the governmental survey thereof, except that in the ir-regular Sections 1, 2, 3, 4 and 5 of Township 21 South, Range 48 West, 6th P.M., Bent County, Colorado, the drilling units shall be comprised as follows:

-- 2 --#105-6

(a) Lots 1 through 10, inclusive, as to each of Sections 2, 3, 4 and 5.

(b) The S/2 of Section 1 and the S/2 of Section 2.

(c) The S/2 of Section 3 and the S/2 of Section 4.

and the permitted well for each such drilling unit shall be located within a radius of 990 feet from the center of the drilling unit upon which it is located, except with res-pect to the drilling unit comprising the S/2 of Sections 1 and 2, in which the permitted well shall be located not less than 990 feet from the boundary lines thereof.

IT IS FURTHER ORDERED, that all wells drilled, and all locations approved by the Commission prior to May 21, 1963, shall be the permitted wells or locations for the respective drilling units.

IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective forthwith, and henceforth the commencement of the drilling of any well or wells in the Upper Morrow Sand, as defined herein, for the purpose of producing gas therefrom, at a location other than authorized by this order, is hereby prohibited.

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 or regulations.

ORDERED this 21st day of May 1963. THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By William R. Smith, Secretary

#105-6