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.   232-90 and 407-126

REPORT OF THE COMMISSION

                                  This cause came on for hearing before the Commission on November 16, 1992 at 8:30 a.m. in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Vessels Oil and Gas Company for an order amending Order No. 232-1 to allow a well originally drilled and completed for production in the Codell and Niobrara Formations, to be recompleted to the "J" Sand Formation at an exception location 470 feet FNL and 1980 feet FWL in the NE1/4 NW1/4 of Section 20, Township 1 North, Range 68 West, 6th P.M.  Further, the order should allow the downhole commingling of production from the "J" Sand Formation with production from the Codell and Niobrara Formations and approve the 320-acre drilling and spacing unit consisting of the N1/2 for production from the "J" Sand Formation and the 80-acre drilling and spacing unit consisting of the N1/2 NW1/4 for production from the Codell and Niobrara Formations.

FINDINGS

                                  The Commission finds as follows:

                                  1.  Vessels Oil and Gas Company, 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 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 20, Township 1 North, Range 68 West, 6th P.M. 

                                  5.  The Commission authorized Order No. 407‑1 to be issued, which 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.  In Order Nos. 407‑10 and 407‑13, 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 20, Township 1 North, Range 68 West, 6th P.M., Weld County, Colorado which lies within the area spaced by these orders.

                                  6.  This matter was heard by the Hearing Officer on November 13, 1992, who recommends approval based upon the testimony presented at the administrative hearing that using the existing wellbore would result in less surface disturbance and greater economic recovery for production from the deeper horizon.

                                  7.  No objections to the application were received and an order of the Commission should be entered allowing the Peltier No. 2 Well to be recompleted at the above-described exception location for production from the "J" Sand Formation and for the downhole commingling of production from Codell and Niobrara Formations.

O R D E R

                                  NOW, THEREFORE, IT IS ORDERED, that an exception is hereby granted to the spacing pattern established by Order No. 232-1, for the Peltier No. 2 Well to be recompleted to the "J" Sand Formation at an exception location 470 feet FNL and 1980 feet FWL in the NE1/4 NW1/4 of Section 20, Township 1 North, Range 68 West, 6th P.M.  Further, the order shall allow the downhole commingling of production from the "J" Sand Formation with production from the Codell and Niobrara Formations and approve the 320-acre drilling and spacing unit consisting of the N1/2 of said Section 20 for production from the "J" Sand Formation and the 80-acre drilling and spacing unit consisting of the N1/2 NW1/4 for production from the Codell and Niobrara Formations.

                                  IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

                                  IT IS FURTHER ORDERED, that the provisions in the above order shall become effective forthwith.

                                  Entered this day of ,

1992, as of November 16, 1992.

                                                                        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

November 30, 1992