BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE ALKALI GULCH FIELD LA PLATA COUNTY, COLORADO	) ) ) )	CAUSE NO. 106 ORDER NO. 106-5

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 8:30 a.m. on March 20, 1995, in the La Plata County Fairgrounds Extension Building, Durango, Colorado, for an order allowing the Marvel Ute Com No. 1 Well located at a surface location 1350 feet FNL and 1450 feet FWL in Section 6, Township 33 North, Range 12 West, N.M.P.M. and completed at a bottomhole location closer than 1320 feet FNL but not closer than 1085 feet FNL to be produced from the Paradox member of the Hermosa Formation at an exception location due to natural deviation during drilling.

FINDINGS

The Commission finds as follows:

1.      Meridian Oil, Inc., as applicant herein, is an interested party in the subject matter of the above-referenced matter.

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 20, 1957, the Commission issued Order No. 106-1 which established 640-acre drilling and spacing units for the production of gas from the Paradox member of the Hermosa Formation, underlying certain lands in the Alkali Gulch Field including Section 6, Township 33 North, Range 12 West, N.M.P.M., with the permitted well no closer than 1320 feet from any section line, and no closer than 330 feet from the quarter lines of each said section.

5. The Marvel Ute Com No. 1 Well was commenced September 7, 1994, and encountered consecutively aligned and steeply-banked structural formations which caused the drilling bit to walk up structure, resulting in the well deviating from the vertical.

7. [sic]  That in order to protect correlative rights and to prevent waste, the Marvel Ute Com No. 1 Well should be allowed to produce from the Paradox member of the Hermosa Formation at an exception location.

8. [sic] Based on the facts presented at the administrative hearing, and having received no protests to the application, the Hearing Officer recommends approval of the application.  An order of the Commission should be entered authorizing the Marvel Ute Com. 1 Well at an exception location 1350 feet FNL and 1450 feet FWL of Section 6, Township 33 North, Range 12 West, N.M.P.M., and completed at a bottom hole location closer than 1320 feet FNL but not closer than 1085 feet FNL for production from the Paradox member of the Hermosa Formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order No. 106-1 is hereby amended to authorize the Marvel Ute Com. 1 Well at an exception location 1350 feet FNL and 1450 feet FWL of Section 6, Township 33 North, Range 12 West, N.M.P.M., and completed at a bottom hole location closer than 1320 feet FNL but not closer than 1085 feet FNL for production from the Paradox member of the Hermosa Formation.

IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

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 orders.

ENTERED this 13^th day of April, 1995, as of March 20, 1995.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
	By  Patricia C. Beaver, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado  80203

April 13, 1995