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 WATTENBERG GAS SPACED AREA AND THE CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO	) ) ) )	CAUSE NO.   232 and 407 ORDER NO.   232-104 and 407-141

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission at 8:30 a.m. on January 19, 1994 in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado on the application of Gerrity Oil & Gas Corporation for an order to amend Cause Nos. 232 and 407 to allow the Pezoldt UU No. 32-4J Well to be completed in the "J" Sand Formation at an exception location 1739 feet FSL and 1794 feet FEL in the NW1/4 SE1/4 of Section 32, Township 1 North, Range 68 West, 6th P.M. for the 320-acre drilling and spacing unit consisting of the E1/2 of said Section 32.  Further, the applicant requests approval for recompletion of the well to the Codell and Niobrara Formations, the downhole commingling of production from the "J" Sand Formation with production from the Codell and Niobrara Formations, and approval of a proposed allocation method for the E1/2 of Section 32 for production from the "J" Sand Formation, and for the W1/2 SE1/4 of Section 32 for production from the Codell and Niobrara Formations.

FINDINGS

                        1.  Gerrity Oil & Gas Corporation, 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.  In Cause No. 232, the Commission established 320-acre drilling and spacing units for the production of gas from the "J" Sand Formation in the Wattenberg Field with one well allowed for each unit to be located in the NE1/4 and SW1/4 and no closer than 990 feet to the boundaries of the quarter section.  On August 21, 1979, the Commission issued Order No. 232-20 which allowed a second well to be drilled on each 320-acre unit, including Section 32, Township 1 North, Range 68 West, 6th P.M.

                        5.  In Order No. 407-1, the Commission established 80-acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation.  Wells shall be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction.  Subsequent orders of the Commission amended Order No. 407-1 to include production from the Niobrara Formation in certain lands and to allow the downhole commingling of production from the Codell and Niobrara Formations, including Section 32, Township 1 North, Range 68 West, 6th P.M.

                        6.  In Order Nos. 407-66 and 232-47, the Commission, among other things, allowed the downhole commingling of production from the "J" Sand Formation with production from the Codell and Niobrara Formations, including Section 32, Township 1 North, Range 68 West, 6th P.M.

                        7.  On July 15, 1993, the Commission approved an Application for Permit to Drill filed by Gerrity Oil & Gas Corporation for the Pezoldt UU No. 32-4J Well at a location 1650 feet FSL and 1650 feet FEL in the NW1/4 SE1/4 of said Section 32 for the 320-acre drilling and spacing unit consisting of the E1/2 of said Section 32 for production from the "J" Sand Formation underlying said unit.

                        8.  On July 26, 1993, the applicant sent a Sundry Notice, Form 4, requesting approval from the Commission staff on the revised location of the Pezoldt UU No. 32-4J Well.  The well was moved eighty (80) feet to the east to a location 1650 feet FSL and 1730 feet FEL.  The well was then spudded on August 9, 1993 and on September 21, 1993, at the time Commission staff processed the July 26, 1993, Sundry Notice, staff advised the applicant that a Commission order was necessary to approve the request to complete the "J" Sand Formation at an exception location.

                        9.  On October 1, 1993, the applicant requested approval to produce the Pezoldt UU No. 32-4J Well at a further revised location 1739 feet FSL and 1794 feet FEL in said Section 32 under provisional terms until a hearing could be held and an order of the Commission issued.  The well was moved due to topography and safety concerns caused by the proximity of a rifle range between July 26, 1993, and August 9, 1993, prior to spudding.  Commission staff approved the request and Gerrity Oil & Gas Corporation proceeded under the terms of approval by the Commission.

                        11.  Based on the facts stated in the application and having been heard by the Hearing Officers who recommended approval of the application, and having received no protests, the Commission should approve the request and amend the orders in Cause Nos. 232 and 407 to allow the Pezoldt UU No. 32-4J Well, located 1739 feet FSL and 1794 feet FEL in the NW1/4 SE1/4, Section 32, Township 1 North, Range 68 West, 6th P.M. to be completed at an exception location for production from the "J" Sand Formation, and to allow recompletion to the Codell and Niobrara Formations, the downhole commingling of production from the "J" Sand Formation with production from the Codell and Niobrara Formations, and the approval of an allocation method for the E1/2 of Section 32 for production from the "J" Sand Formation, and for the W1/2 SE1/4 of Section 32 for production from the Codell and Niobrara Formations.

O R D E R

                        NOW, THEREFORE, IT IS ORDERED that the orders in Cause Nos. 232 and 407 are hereby amended to allow the Pezoldt UU No. 32-4J Well, located 1739 feet FSL and 1794 feet FEL in the NW1/4 SE1/4, Section 32, Township 1 North, Range 68 West, 6th P.M. to be completed at an exception location for production from the "J" Sand Formation, and to allow recompletion to the Codell and Niobrara Formations, the downhole commingling of production from the "J" Sand Formation with production from the Codell and Niobrara Formations, and the approval of an allocation method for the E1/2 of Section 32 for production from the "J" Sand Formation, and for the W1/2 SE1/4 of Section 32 for production from the Codell and Niobrara Formations.

                        IT IS FURTHER ORDERED that no additional Application for Permit to Drill be submitted, but that all actual information concerning the completion of the Pezoldt UU No. 32-4J Well shall be reported to the Commission by means of the initial Completion Report, Form 5, initial Certificate of Clearance, Form 10, and a set of mechanical logs, accompanied by a copy of this order, within thirty (30) days from the date the order is entered.

                        IT IS FURTHER ORDERED that the provisions contained in the above order 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.

                        ENTERED this  day of , 1994, as of January 19, 1994.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                           OF THE STATE OF COLORADO

                                                                        By

                                                                                    Patricia C. Beaver, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203

February 1, 1994