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, ADAMS COUNTY, COLORADO	) ) ) )	CAUSE NO.   232 ORDER NO.   232-108

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission at 8:30 a.m. on April 18, 1994 in Room 318, Centennial Building, 1313 Sherman Street, Denver, Colorado on the application of Smith Oil Properties, Inc. for an order to establish 40-acre drilling and spacing units for four producing wells located in Section 4, Township 1 South, Range 64 West, 6th P.M., for production from the "D" Sand and "J" Sand Formations.  Further, the order should allow the completion or recompletion of all wells drilled in said Section 4 for production of oil, gas, and associated hydrocarbons from the "D" Sand and "J" Sand Formations, either by multiple completion or downhole commingling within the wellbore.

FINDINGS

                        The Commission finds as follows:

                        1.  Smith Oil Properties, Inc., 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 4, Township 1 South, Range 64 West, 6th P.M.

                        5.  Rule 316. of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission requires that wells drilled to a depth of 2500 feet or deeper be located no closer than 600 feet from any lease line, and not less than 1,200 feet from any other producible or drilling oil or gas well drilling to the same common source of supply, unless authorized by an order of the Commission or unless waivers are obtained from those parties who will be affected by the exception location.  The "D" Sand Formation falls under the provisions of this rule in Section 4, Township 1 South, Range 64 West, 6th P.M.

                        6.  Rule 320 of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission requires that an application be submitted for approval for the multiple zone completion or commingling in one well bore.

                        7.  The Banter Morris No. 32-4 Well located in the NE1/4 SW1/4, the Silver Dollar Gattman No. 43-4 Well located in the NE1/4 SE1/4, the Joy No. 1 Well located in the NE1/4 NW1/4, and the Terri No. 1 Well located in the SW1/4 SW1/4, all in Section 4, Township 1 South, Range 64 West, 6th P.M., have been drilled and completed in the "D" Sand Formation and should be designated as the permitted wells for the 40-acre drilling and spacing units upon which they are located.

                        8.  Upon the applicant's filing and the Director's approval of the proper forms in accordance with Rule 303.b., the order should allow the completion or recompletion of the wells described above in Finding 7 for production of oil, gas, and associated hydrocarbons from the "J" Sand Formation and further allow the multiple completion or downhole commingling of production from the "D" Sand and "J" Sand Formations within the wellbore without segregation.

                        9.  Based on the facts stated in the application, having received no protests, and having been heard by the Hearing Officers on April 14, 1994, who recommended approval, the Commission should enter an order approving the application.

ORDER

                        NOW, THEREFORE, IT IS ORDERED that, the Oil and Gas Conservation Commission enter an order to establish 40-acre drilling and spacing units in the NE1/4 SW1/4, the NE1/4 SE1/4, the NE1/4 NW1/4, and the SW1/4 SW1/4, all in Section 4, Township 1 South, Range 64 West, 6th P.M., for production from the "D" and "J" Sand Formations, and allow the completion or recompletion of the four wells drilled in said units for production of oil, gas, and associated hydrocarbons from the "D" Sand and "J" Sand Formations, either by multiple completion or downhole commingling.

                        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 April 18, 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

April 25, 1994