REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 18, 1972, at 9 A.M., in Room 132, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Amoco Production Company for an order establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying certain lands in Arapahoe County, Colorado.

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 con-stitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Arapahoe County, Colorado, to-wit:

Township 5 South, Range 60 West, 6th P.M. Section 7: All Section 30: All Section 18: All Section 31: All Section 19: All Town ship 5 South, Range 61 West, 6th P.M. Section 13: All Section 25: All Section 24: All Section 36: All

4. That in order to prevent the waste of gas and oil, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unneces-sary wells, and to insure proper and efficient development and promote conservation of the gas and oil resources of the State, an order should be made establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand, common source of supply underlying the lands defined herein; that said units should be 320-acres, more or less, and consisting of the E/2 and W/2 or the N/2 and S/2 of each section, according to the governmental survey thereof, which drilling units should be designated at the time of filing for the permit to drill; and that the permitted well for each such drilling unit should be located no closer than 660 feet to the boundaries of the half section upon which it is located, and further that the Director may, without additional notice and hearing grant exceptions to the permitted well locations to avoid hazardous conditions in drilling near surface obstructions, provided the owners of the contiguous and cornering drilling units file a waiver or consent in writing agreeing to said exceptions.

(over)

5. That the "j" Sand gas wells drilled prior to June 23, 1972 should be the permitted wells for the drilling and spacing units upon which they are located, and certain units are designated as follows: N/2 Section 18 WI Section 30 Township 5 South, Range 60 West, 6th P.M.; N/2 and S/2 Section 13, N/2 and S/2 Section 24, Township 5 South, Range 61 We st, 6th P.M.

6. That all available geological and engineering data concerning said "J" Sand indicate that one well will efficiently and economically drain an area of approximately 320 acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently and economically drained by one well producing from said "J" Sand.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to wells drilled, completed, or recompleted in the "J" Sand underlying the Latigo 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. Three Hundred twenty (320) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydro-carbons from the "J" Sand underlying the following described lands in the Latigo Field, Arapahoe County, Colorado, to-wit:

Township 5 South, Range 60 West, 6th P.M. Section 7: All Section 30: All Section 18: All Section 31: All Section 19: All

Township 5 South, Range 61 West, 6th P.M. Section 13: All Section 25: All Section 24: All Section 36: All

Rule 2. Said drilling units shall consist of three hundred twenty (320) acres, more or less, and each such drilling unit shall be the E/2 and W/2 or the N/2 and S/2 of each section, according to the governmental survey thereof, which drilling units shall be designated at the time of filing the permit to drill; and the permitted well for each drilling unit shall be located no closer than 660 feet to the boundaries of the half section upon which it is located, and that the Director may, without additional notice and hearing grant excep-tions to the permitted well locations to avoid hazardous conditions in drilling near surface obstructions, provided the owners of the contiguous and cornering drilling units file a waiver or consent in writing agreeing to said exceptions.

IT IS FURTHER ORDERED that the "J" Sand gas wells drilled prior to June 23, 1972 shall be the permitted wells for the drilling and spacing units upon which they are located and certain units are designated as follows: N/2 Section 18, W/2 Section 30, Township 5 South, Range 60 West, 8th P.M.; N/2 and S/2 Section 13, N/2 and S/2 Section 24, Township 5 South, Range 61 West, 6th P.M.

IT IS FURTHER ORDERED that the provisions contained in the above orders shall become effective forthwith.

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IT IS FURTHER ORDERED that the Commission expressly reserves its rights after notice and hearing, to alter, amend or repeal any and/or all of the above orders, rules and regulations.

ORDERED this 19th day of July, 1972.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary