226-2

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 PEORIA FIELD, ARAPAHOE COUNTY, COLORADO

)

CAUSE NO. 226

ORDER NO. 226-2

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 21, 1970, at 10 a.m., in the P.U.C. Hearing Room, 5th Floor, Columbine Building, 1845 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Pan American Petroleum Corporation, for an order establishing 80-acre drilling and spacing units for the production of oil from the "J" Sand of the Muddy formation underlying certain lands in Arapahoe County, Colorado, and that Sections 28 and 33, Township 4 South, Range 60 West, 6th P.M., be deleted from the lands covered by Order No. 226-1 and made subject to the Order requested by the Applicant.

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 "J" sand of the Muddy formation constitutes a common source of supply of oil underlying the following described lands in Arapahoe County, Colorado, to-wit:

Township 4 South, Range 60 West, 6th P.M.

Section	28:	All	Section	31:	All
Section	29:	All	Section	32:	All
Section	30:	All	Section	33:	All

4. That in order to prevent the waste of oil and gas, as defined by law; 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 oil and gas resources of the State, an order should be made establishing 80-acre drilling and spacing units for the production of oil from the "J" sand of the Muddy formation, common source of supply underlying the lands defined herein; that said units should be 80-acre drilling units, and consisting of the E½ and the W½ or the N½ and the S½ of each quarter section, according to the governmental survey thereof; and that the permitted well for each such drilling unit should be located in the center of the NE¼ and the SW¼ of each quarter section, with a tolerance of 200 feet in any direction.

5. That the Well No. 1 Twin Quin (formerly known as Well No. 1 Interstate Racing Association), located in the NE¼ SW¼ SW¼ Section 28, Township 4 South, Range 60 West, 6th P.M. be considered an exception and be the permitted well for the drilling unit upon which it is located, and that because of a surface hazard, the Well No. 2 Twin Quin, to be located 1650 feet from the North line and 990 feet from the West line of section 28, Township 4 South, Range 60 West, also be considered an exception and be the permitted well for the drilling unit upon which it is to be located.

6. That Sections 28 and 33, Township 4 South, Range 60 West, be deleted from the lands covered by Order No. 226-1, which established 320-acre drilling and spacing units for the production of gas in the Peoria Field, and said sections be made subject to the Order requested by the Applicant.

7. That all available geological and engineering data concerning said "J" sand indicate that one well will efficiently and economically drain an area of approximately 80 acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one well producing from said "J" sand.

ORDER

NOW, THEREFORE, IT IS ORDERED that the following rules and regulations shall apply hereafter to wells drilled, completed, or recompleted in the "J" sand of the Muddy Formation underlying that portion of the Peoria 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: Eighty (80) acre drilling and spacing units shall be and the same are hereby established for the production of oil from the "J" sand of the Muddy formation underlying the following described lands in the Peoria Field, Arapahoe County, Colorado, to-wit:

Township 4 South, Range 60 West, 6th P.M.

Section	28:	All	Section	31:	All
Section	29:	All	Section	32:	All
Section	30:	All	Section	33:	All

Rule 2: Said drilling units shall consist of eighty (80) acres, and each such drilling unit shall be the E½ and the W½ or the N½ and the S½ of each quarter section, according to the governmental survey thereof, and the permitted well for each such drilling unit shall be located in the center of the NE¼ and the SW¼ of each quarter section, with a tolerance of 200 feet in any direction.

IT IS FURTHER ORDERED, that the Well No. 1 Twin Quin (formerly known as Well No. 1 Interstate Racing Association), located in the NE¼ SW¼ SW¼, Section 28, Township 4 South, Range 60 West, 6th P.M. shall be considered an exception and is the permitted well for the drilling unit upon which it is located, said unit being the W½ S½ of Section 28, and that because of a surface hazard, the Well No. 2 Twin Quin, to be located 1650 feet from the North line and 990 feet from the West line of section 28, Township 4 South, Range 60 West 6th P.M., shall also be considered an exception and be the permitted well for the drilling unit upon which it is to be located.

IT IS FURTHER ORDERED, that Sections 28 and 33, Township 4 South, Range 60 West, are deleted from the lands covered by Order No. 226-1 and are included in the lands herein described.

IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective forthwith.

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, rules and regulations.

ORDERED this 21st day of July 1970.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary