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 FIELD, WELD COUNTY, COLORADO	) ) ) )	CAUSE NO. 232 ORDER NO. 232-48

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 20, 1991, in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of DJ Energy, Inc. and Timothy J. Pivonka to allow the 320-acre drilling and spacing unit consisting of the S1/2 of Section 22, Township 5 North, Range 67 West, 6th P.M. to be segregated into two 160-acre drilling and spacing units consisting of the SW1/4 and the SE1/4 of said Section 22 for production from the "J" Sand formation.

FINDINGS

The Commission finds as follows:

1.      DJ Energy, Inc. and Timothy J. Pivonka, as applicants herein, are interested parties in the subject matter of the above-entitled 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 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.

5.      Proceeds from the first date of production, July 7, 1983, from the Hankins No. 2 well located in the SW1/4 SE1/4 of Section 22, have, to the best of the applicants' knowledge always been paid as if the 160-acre tract consisting of the SE1/4 was the drilling and spacing unit for production from the "J" Sand formation.

6.      Based on the facts stated in the verified application and having been heard by the Hearing Officer who recommended approval of the application, and having received no protests, the Commission should approve the request and amend Order No. 232-1 and establish two 160-acre units consisting of the SW1/4 and the SE1/4 of said Section 22 for the production of oil, gas and associated hydrocarbons from the "J" Sand formation.

7.      The Hawkins No. 2 well should be the permitted well for the 160-acre drilling and spacing unit consisting of the SE1/4 of said Section 22.

8.      At the time of administrative hearing the parties agreed to be bound by the verbal order of the Commission in this matter.

ORDER

NOW, THEREFORE, IT IS ORDERED, that, the unit consisting of the S1/2 of Section 22, Township 5 North, Range 67 West, 6th P.M., Weld County, Colorado be segregated into two 160-acre drilling and spacing units consisting of the SW1/4 and the SE1/4 for the production of oil, gas and associated hydrocarbons from the "J" Sand formation underlying these lands, and further that the Hawkins No. 2 well shall be considered the permitted well for the 160-acre drilling and spacing unit consisting of the SE1/4 of said Section 22.

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.

IT IS FURTHER ORDERED, that with the verbal consent of the interested parties at the time of hearing, this order shall become effective retroactive to the first date of reported production, July 7, 1983.

ENTERED this 3rd day of June 1991 as of May 20, 1991.

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

May 31, 1991