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 BISON FIELD, WASHINGTON COUNTY, COLORADO	) ) ) )	CAUSE NO. 163 ORDER NO. 163-3

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 21, 1978, at 9 a.m., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing, as required by law, on the application of Quest Oil Company for an order granting an exception to the spacing pattern as established by Order No. 163-1 and an additional well to be drilled as an exception to Rule 318.

FINDINGS

The Commission finds as follows:

1.      Quest Oil Company, 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.

4.      On June 6, 1962, the Commission issued its Order No. 163-1 which established 40-acre drilling and spacing units for production of oil from the "J" Sand underlying lands in the Bison Field.  The units consist of a quarter-quarter section with the permitted well located no closer than 600 feet from the boundaries of the unit.

5.      A well has been drilled in the NE¼NE¼ Section 12, Township 4 South, Range 54 West which was completed as an oil producer but has now been plugged and abandoned as an exhausted producer, and a well has been drilled in the SE¼NE¼ of said Section 12, and plugged and abandoned as a dry hole.  In addition, a dry hole was drilled at a location in the NE¼NE¼ of Section 13, Township 4 South, Range 54 West.

6.      Evidence presented at the hearing indicates that drilling units are located partly outside the reservoir of the Bison Field, and that in order to obtain oil that would otherwise be unrecovered, exceptions to the spacing pattern as established by Order No. 163-1 and Rule 318 should be granted.

7.      An exception should be allowed for a well to be drilled at a location 1350 feet from the north line and no closer than 525 feet from the east line of Section 12, Township 4 South, Range 54 West; however, the Commission should, at the request of interested persons, take such action as will offset any advantage which the person securing the exception at this location may have over other producers by reason of the drilling of the well at said location.  In addition, an exception to Rule 318 should be allowed for a well to be drilled at a location no closer than 330 feet from the north line and no closer than 330 feet from the east line of Section 13, Township 4 South, Range 54 West; however, in order to offset any advantage a well at this location may have over other producers by reason of drilling the well as an exception, and in order to prevent production from the drilling unit upon which the well is located of more than its just and equitable share of oil from the reservoir, a restriction of fifty percent (50%) of the average of the daily production from the three direct offset wells should be placed on the well.

ORDER

NOW, THEREFORE, IT IS ORDERED, that an exception to the spacing pattern established by Order No. 163-1, is hereby granted for a well to be drilled at a location 1350 feet from the north line and no closer than 525 feet from the east line Section 13, Township 4 South, Range 54 West; however, if a commercial well is drilled on the location as set forth above, the Commission shall, at the request of interested persons, take such action as will offset any advantage which the person securing the exception may have over other producers by reason of the drilling of the well as an exception.

IT IS FURTHER ORDERED, that an exception to Rule 318 is hereby granted for a well to be drilled at a location no closer than 330 feet from the north line and no closer than 330 feet from the east line Section 13, Township 4 South, Range 54 West, 6th P.M.; however, if a commercial well is drilled at said location, it shall be restricted in production to fifty percent (50%) of the average of the daily production from all direct offset wells drilled in accordance with the spacing pattern as established by Order No. 163-1.

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.

ORDERED this 21st day of August, 1978.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
	By	Frank J. Piro, Secretary