156-2

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 FLODINE PARK FIELD, MONTEZUMA COUNTY, COLORADO

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CAUSE NO. 156

ORDER NO. 156-2

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 21, 1961, at 10 a.m., in Room 320B, State Capitol, Denver, Colorado, after publication of Notice of Hearing as required by law, on the application of C.S. McGhee, a protestant in the above-styled matter at the hearing before the Commission on September 19, 1961. Applicant petitioned the Oil and Gas Conservation Commission of the State of Colorado to alter, amend or repeal its order entered October 3, 1961, as it pertains to the drilling and spacing units established in the West Half of Section 22, Township 35 North, Range 20 West, N.M.P.M.

The acreage involved at this hearing consists of lands with disputed oil and gas lease ownership. The question of lease ownership is now and has been pending for a relatively long period of time. The Commission notes that the status of this disputed acreage is, for all practical purposes, unchanged since the September 19, 1961 hearing in this cause, and no reliable information is available to the Commission as to when a final determination of the lease ownership controversy will occur. It should be mentioned that if a lease ownership should be determined administratively, the unsuccessful party would still have recourse to the Federal. courts, which would further delay determination of the lease ownership dispute.

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 no material additional information was presented at the November 21, 1961 hearing.

4. That the title to Lots 5, 6, 7 and 8, Section 22, Township 35 North, Range 20 West, N.M.P.M. is still in dispute, and that no accurate estimate can be made as to the length of time it will take to conclude the disagreement.

5. That other parties owning interests in Section 22 have expressly represented to the Commission that if the disputed acreage is spaced with non-disputed. acreage, the owners of the non-disputed acreage will be unable to develop their properties until the dispute is settled. If Applicant's request is granted, no development will take place on Lots 1, 2, 3, 4, 5, 6, 7 and 8 until a final determination of the lease ownership dispute.

6. That there are producing wells to the north and west of Lots 1 through 8 in Section 22.

7. That in order to permit the development of the non-disputed acreage in Section 22, the Commission's Order No. 156-1 should remain unchanged.

8. That at such time as development does take place on Lots 5, 6, 7 and 8, the owners of said acreage would have the right to petition the Commission and, if the evidence presented justifies, obtain an order for such adjustments or compensatory requirements as may be necessary to protect correlative rights.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the application of C. S, McGhee to alter, amend or repeal the Commission's Order No. 156-1 is hereby denied.

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 its rules and regulations established for the Flodine Park Field.

ORDERED this 6th day of December 1961.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

D.V. Rogers, Secretary