BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

REPORT OF COMMISSION

This cause came on for hearing before the Commission on August 8, 2011, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to grant a well location exception for the Colorado 32-7-3 #16 Well, a directional well, with an intended bottomhole location of 660 feet FSL and 660 feet FEL in the SE¼ SE¼ of Section 3, Township 32 North, Range 7 West, N.M.P.M. and actual bottomhole location of the Well is 681.6 feet FSL and 583.2 feet FEL, for the production of gas and associated hydrocarbons from the Fruitland Coal Seams.

FINDINGS

The Commission finds as follows:

1.    Samson Resources Company (“Samson” or Applicant”), 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 pursuant to the Oil and Gas Conservation Act.

4.    On June 9, 2011, Samson, by its attorneys, filed with the Commission a verified application (the “Application”) for an order to grant a well location exception for the Colorado 32-7-3 #16 Well (the ”Well”), API #05-067-09836, a directional well, with an intended bottomhole location of 660 feet FSL and 660 feet FEL in the SE¼ SE¼ of Section 3, Township 32 North, Range 7 West, N.M.P.M.  The actual bottomhole location of the Well is 681.6 feet  FSL and 583.2 feet FEL, or 76.8 feet inside the 660 foot setback along the east line of Section 3.  The Well is approximately 897 feet from the cornering drilling and spacing unit. 

5.    On July 26, 2011, Samson, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits. Sworn written testimony and exhibits were submitted in support of the Application.

6.    Testimony and exhibits submitted in support of the Application by Rebecca Bell, Landman – San Juan Basin for Samson Resources Company, showed:  (1) the bottomhole location of the Colorado 32-7-3 #16 Well was inadvertently located within the east 660 foot setback created by Colorado Oil and Gas Conservation Commission Order 112-181; (2) all adjacent owners affected by the setback infringement have been provided notice of this Application; (3) one of those owners has agreed to the requested variance/exception location in exchange for a reciprocal variance/exception location in the adjacent quarter-quarter section affected by the incorrect downhole location; (4) the remaining two owners have not protested the Application; and (5) Samson is willing to concede to a reciprocal variance/exception location for the remaining two owners who have neither executed a waiver nor protested the Application; all of which will prevent waste and protect correlative rights.

7.    The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.

8.    Samson agreed to be bound by oral order of the Commission. 

9.    Based on the facts stated in the verified Application, having received no protests, and based on the Hearing Officer review of the Application under Rule 511., the Commission should enter an order granting a well location exception for the Colorado 32-7-3 #16 Well, a directional well, with an intended bottomhole location of 660 feet FSL and 660 feet FEL in the SE¼ SE¼ of Section 3, Township 32 North, Range 7 West, N.M.P.M. and actual bottomhole location of the Well is 681.6 feet FSL and 583.2 feet FEL, for the development for the development and operation of the Fruitland Coal Seams .

ORDER

NOW, THEREFORE IT IS ORDERED, that a well location exception is hereby granted for the Colorado 32-7-3 #16 Well, a directional well, with an intended bottomhole location of 660 feet FSL and 660 feet FEL in the SE¼ SE¼ of Section 3, Township 32 North, Range 7 West, N.M.P.M. and actual bottomhole location of the Well is 681.6 feet  FSL and 583.2 feet FEL, or 76.8 feet inside the 660 foot setback along the east line of said Section 3.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective immediately.

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.

IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this Order to be final agency action for purposes of judicial review within 30 days after the date this Order is mailed by the Commission.

IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

                        ENTERED this   12^th   day of August, 2011, as of August 8, 2011.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By____________________________________         

                                                                                    Robert A. Willis, Acting Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

August 12, 2011