179-2

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 RED LION FIELD, LOGAN AND SEDGWICK COUNTIES, COLORADO

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CAUSE NO. 179

ORDER NO. 179-2

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 15, 1975 at 9 a.m., in Room 532, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Keba Oil & Gas Company, acting for itself and on behalf of The Termo Company for an order requiring the pooling of all tracts of land within the designated unit consisting of the N½ Section 19, Township 10 North, Range 47 West, 6th P.M., Sedgwick County, Colorado.

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 by its Order No. 179-1, the Commission established a 320-acre drilling and spacing unit for the production of gas and associated hydrocarbons and the development of the "D" Sand underlying said unit which is comprised of the N½ Section 19, Township 10 North, Range 47 West, 6th P.M., Sedgwick County, Colorado.

4. That reasonable effort has been made to obtain the voluntary pooling of all interests in said drilling unit for the development and operation thereof, but that it has not been possible to secure the agreement of all owners of interests in said unit for the voluntary pooling thereof.

5. That Applicant is an "interested person" within the meaning of 34-60-116 (6), CRS 1973, of the Oil and Gas Conservation Act of the State of Colorado.

6. That the Well No. 31-19 Federal, drilled by the Applicant and located 600 feet from the north line and 2100 feet from the east line of said Section 19, has been completed as a well capable of producing gas from the "D" Sand and that said well constitutes the permitted well for said drilling unit.

7. That in order to insure proper and efficient development of said drilling unit and to promote conservation of the gas resources of the State, an order should be made pooling all interests in the 320-acre drilling unit described herein.

8. That an order of the Commission pooling all interests in said drilling unit is necessary, just and reasonable in order to afford each owner of interest in said drilling unit the opportunity to recover and receive his just and equitable share of the gas from the common source of supply underlying said drilling unit.

9. That production obtained from said drilling unit should be allocated to each tract therein on the basis of the proportion that the number of acres in such tract bears to the total number of acres within said drilling unit.

10. That interest on money borrowed by the Applicant to equip the well should not be considered as part of the reasonable actual cost of drilling and operating the permitted well.

11. That for those costs that are in dispute, the following figures should be used as the proper actual cost:

Item	Amount	Cost

4 1/2 inch Casing	3871.58 (@4.75/ft.)	$	18,390.01
2 3/8 inch Tubing	3820.67 (@2.50/ft.)	$	9,550.68
Drill Stem Test	1	$	805.00

ORDER

NOW, THEREFORE, IT IS ORDERED, that pursuant to the provisions of 34-60-116, CRS 1973, of the Oil and Gas Conservation Act of the State of Colorado, all interests in the drilling unit described as the N½ Section 19, Township 10 North, Range 47 West, 6th P.M., Red Lion Field, Sedgwick County, Colorado, are hereby pooled for the development and operation of said drilling unit.

IT IS FURTHER ORDERED, that the production obtained from said drilling unit shall be allocated to each tract therein on the basis of the proportion that the number of acres in such tract bears to the total number of acres within said drilling unit, and each owner of interest in said tracts in said drilling unit shall be entitled to receive his share of the production of the well located on said drilling unit, applicable to his interest in said drilling unit.

IT IS FURTHER ORDERED, that payment for the reasonable actual costs for the permitted well shall not include interest on money borrowed by the operator, and that the proper costs for the casing, tubing and drill stem test shall be as shown in Finding 11 herein.

IT IS FURTHER ORDERED., that the above orders shall become effective April 15, 1975.

ORDERED this 9th day of May, 1975.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary