REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 21, 1977 at 9 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the Complaint of Betty J. Meats, Marva J. Welsh, Shirley J. Bell and Carol J. Ladine, that they did not receive proper notice con-cerning a hearing held December 20, 1976 which resulted in the issuance of Order No. 240-2 and requesting, therefore, that said order should be repealed and vacated.

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 That on December 20, 1976, the Commission issued its Order No. 240-2 for the Peetz-Northwest Field which rescinded a previous order, No. 240-1 and re-established a 640-acre drilling and spacing unit consisting of the W/2 Section 28 and the E/2 Section 29, Township 12 North, Range 52 West, 6th P.M., with the permitted well the No. 1 Ladine, located in the SW/4 NW/4 of said Section 28. In addition, all interests were pooled for the development and operation of said drilling unit.

4. That Plaintiffs are lessors of mineral rights in the NW/4 Section 28, Township 12 North, Range 52 West, 6th P.M., by virtue of a lease dated June 25, 1975 which granted to the lessee "the right and power to pool or combine acreage covered by such lease.

5. That Plaintiff's rights are limited to a royalty interest.

6. That the Oil and Gas Conservation Act, as amended, requires service on interested parties and Rule 516 defines "interested parties" as those persons who own any interest in the tracts to be pooled or unitized. The Commission has interpreted this phrase to apply to working interest mineral owners whose interest constitute an interest in real estate rather than a royalty interest which is an interest in personalty. Addi-tionally, where there is a mineral lease with a grant to the lessee to pool the leased interest, the Commission has held that the royalty interest holder's rights are contract-ual in nature and a Commission hearing is not the proper forum to decide this type of contract dispute.

7. That the complaint should be dismissed since Plaintiffs are not interested parties within the meaning of the Statute or Rules for Notices of Hearing on application for pooling.

8. That as to the spacing portion of Order No. 240-2, the Statute then in effect, required only service of the Notice of Hearing by one of two alternative means, one of which was publication and such publication was in fact made.

(over)

ORDER

NOW, THEREFORE, IT IS ORDERED, that the Complaint filed October 21, 1977 by Betty J. Meats, Marva J. Welsh, Shirley J. Bell and Carol J. Ladine, requesting that Order No. 240-2 be repealed and vacated is hereby dismissed.

ORDERED this 21st day of November, 1977.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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