139-14

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 RULISON FIELD, GARFIELD COUNTY, COLORADO

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CAUSE NO. 139

ORDER NO. 139-14 (Corrected)

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 20, 1990 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of the Office of Naval Petroleum and Oil Shale Reserves, U.S. Department of Energy, for an order modifying Order No. 139-8 to include additional lands for production of gas from the Wasatch and Mesaverde formations underlying such lands.

FINDINGS

The Commission finds as follows:

1. That the Office of Naval Petroleum and Oil Shale Reserves, U.S. Department of Energy, as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

2. That due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

3. 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.

4. That by Order No. 139-8 the Commission established that the Wasatch formation and the Mesaverde formation each constitutes a supply of gas and associated hydrocarbons underlying the following described lands in a portion of the Rulison Field, Garfield County, Colorado, to-wit:

Township 6 South, Range 93 West, 6th P.M.
Sections	5 thru 8:	All
Sections	17 thru 20:	All

Township 6 South, Range 94 West, 6th P.M.
Sections	1 thru 3:	All
Sections	8 thru 17:	All
Sections	19 thru 24:	All
Sections	27 thru 33:	All

and that all available geological and engineering data concerning said Wasatch and Mesaverde formations indicates that one well will efficiently and economically drain an area of approximately 160-acres for the Wasatch formation and approximately 320-acres for the Mesaverde formation, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently and economically drained by one well producing from each said formation

5. That the Mesaverde group should include the Mesaverde which lies above the Cameo formation, and the lower portion of the Mesaverde which includes the Cameo, Rollins, Cozzette and Corcoran Sands, and the Coalbed Methane horizons, and that the below listed lands should be included within the area established by Order No. 139-8 for the production of gas and associated hydrocarbons from the Wasatch and Mesaverde formations underlying them, to-wit:

Township 6 South, Range 94 West, 6th P.M.
Sections 1, 2, 3, 9, 10, 11, 15, 16, 17, 18, 19, 20 and 30

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or re-completed in the Wasatch and Mesaverde formations underlying that portion of the Rulison Field, Garfield County, Colorado, described as follows, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Township 6 South, Range 93 West, 6th P.M.
Sections	5 thru 8:	All
Sections	17 thru 20:	All

Township 6 South, Range 94 West, 6th P.M.
Sections	1 thru 3:	All
Sections	8 thru 24:	All
Sections	27 thru 33:	All

Wasatch Formation

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 Wasatch formation underlying that portion of the Rulison Field hereinabove described.

Rule 2. Said drilling units for the Wasatch formation shall consist of 160-acres, more or less, and each shall consist of a quarter section, according to the governmental survey thereof, with the permitted well located no closer than 600 feet to the boundaries of the unit and no closer than 1200 feet from another producing or producible well in the same formation, and Well No. 1 Clough, SE1/4 SE1/4 Section 15, Township 6 South, Range 94 West, 6th P.M. shall be considered the permitted well for the unit upon which it is located.

Mesaverde Formation

Rule 3. Three hundred twenty (320) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the Mesaverde formation which shall include the upper portion of the Mesaverde which lies above the Cameo formation and the lower portion of the Mesaverde which includes the Cameo, Rollins, Cozzette and Corcoran Sands, and the Coalbed Methane horizons underlying that portion of the Rulison Field hereinabove described.

Rule 4. Said drilling units for the Mesaverde formation shall consist of 320-acres, more or less, and shall consist of the E1/2 and W1/2 or the N1/2 and S1/2 of a section, according to the governmental survey thereof (the drilling unit shall be designated at the time of filing the permit to drill), with the permitted well located in the NE1/4 and SW1/4 of each section and no closer than 600 feet to the boundaries of the quarter section upon which it is located, and no closer than 1200 feet from another producing or producible well in the same formation, and Well No. 2 Clough, SE1/4 SW1/4 Section 21, Township 6 South, Range 94 West, 6th P.M. shall be considered the permitted well for the unit upon which it is located.

IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective upon the date the written order is mailed as indicated by the entry date below.

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 8th day of March, 1990, as of February 20, 1990.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Dennis R. Bicknell, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203