184-1

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 STEM FIELD, WASHINGTON COUNTY, COLORADO

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CAUSE NO. 184

ORDER NO. 184-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 17, 1964, at 10 a.m., in Room 132, State Services Building, Denver, Colorado, after publication of Notice of Hearing as required by law, on the application of Edward Mike Davis doing business as Tiger Oil Company, requesting an order establishing two 640-acre drilling and spacing units for production of gas from the "D" sand formation underlying Sections 5 and 8, Township 1 North, Range 52 West, 6th P.M., Washington County, Colorado; and for an order requiring the pooling of all interests in said drilling units for the development of the "D" sand formation underlying said lands.

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 evidence presented at the hearing indicates that the "D" sand formation constitutes a common source of supply of gas and associated hydrocarbons underlying Sections 5 and 8, Township 1 North, Range 52 West, 6th P.M., Washington County, Colorado.

4. That in order to prevent waste of gas and associated hydrocarbons; to protect the correlative rights of all parties concerned; to prevent the drilling of unnecessary wells, and to insure proper and efficient development and promote conservation of the resources of the State, an order should be made establishing drilling units of approximately 640 acres for production of gas and associated hydrocarbons from the "D" sand formation underlying said lands, as defined herein; that said units should be 640-acre drilling units consisting of complete sections, according to the governmental survey thereof.

5. That the No. 1 Lewton well located in the SW¼NE¼ of the drilling unit consisting of Section 5, Township 1 North, Range 52 West, Washington County, Colorado, should be the permitted well for said drilling unit.

6. That all available geological and engineering data concerning said "D" sand formation indicate that one well will adequately and efficiently drain an area of approximately 640 acres of land in said formation.

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

8. That Applicant is an "interested person" within the meaning of 100-6-4(6) of the Oil and Gas Conservation Act of the State of Colorado.

9. That in order to insure proper and efficient development of said drilling units, and to promote conservation of all resources of the State, an order should be made pooling all interests in each of said 640-acre drilling units described herein.

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

11. That production of gas and associated hydrocarbons obtained from the drilling units described as Section 5 and Section 8, Township 1 North, Range 52 West, 6th P.M., Washington County, Colorado, 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 each of said drilling units.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled completed, or recompleted in the "D" sand formation underlying the Stem Field herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. Six Hundred Forty (640) acre drilling units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the "D" sand formation, common source of supply underlying the following described lands in Washington County, Colorado, to-wit:

Township 1 North, Range 52 West, 6th P.M.

Sections 5 and 8

and such area shall henceforth be known as the Stem Field.

Rule 2. Said drilling units shall consist of approximately 640 acres, each unit comprising a complete section according to the governmental survey thereof; and the permitted well for each drilling unit shall be located in accordance with the general rules and regulations of the Commission.

IT IS FURTHER ORDERED, that all interests in the drilling unit described as Section 5, Township 1 North, Range 52 West, 6th P.M., Washington County, Colorado, are hereby pooled for the development and operation of said drilling unit; and production of gas and associated hydrocarbons obtained from the "D" sand formation of the authorized well for said drilling unit shall be allocated to each tract therein on the # 184-1 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 from the permitted well for said drilling unit.

IT IS FURTHER ORDERED, that all interests in the drilling unit described as Section 8, Township 1 North, Range 52 West, 6th P.M., Washington County, Colorado, are hereby pooled for the development and operation of said drilling unit; and production of gas and associated hydrocarbons obtained from the "D" sand formation of the authorized well for 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 from the permitted well for said drilling unit.

ORDERED this 17th day of November 1964.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

William R. Smith, Secretary