REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 19, 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 Gen Oil, Inc., which appli-cation was amended at the hearing deleting certain lands from the area to be spaced, for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Shannon formation, underlying certain lands in Weld 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 Shannon forma-tion constitutes a common source of supply of oil and associated hydrocarbons under-lying the following described lands in Weld County, Colorado, to-wit:

Township 1 North, Range 68 West, 6th P.M. Section 1: All Section 10: All Section 2: All Section 11: All Section 3: All Section 12: All Township 2 North, Range 67 West, 6th P.M. Section 19: All Section 30: All Section 20: All Section 31: All Section 29: All Section 32: All Township 2 North, Range 68 West, 6th P.M. Section 25: All Section 35: All Section 26: E/2 Section 36: All Section 34: All

4. That in order to prevent the waste of oil and gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of un-necessary wells, and to insure proper and efficient development and promote conserva-tion of the oil and gas resources of the State, an order should be made establishing 80-acre drilling units, and consisting of the E/2 and W/2 or the N/2 and S/2 of each quarter

(over) section, according to the governmental survey thereof, which drilling units should be designated at the time of filing the permit to drill; and that the permitted well for each such drilling unit should be located in the center of the NE/4 and SW/4 of each quarter section, with a tolerance of 200 feet in any direction from said location to avoid surface hazards or obstructions; however, the Director may without additional notice and hearing, grant exceptions to the permitted well locations to avoid hazardous conditions in drilling near mines, mine shafts, water supply sources, or surface conditions, provided owners of the contiguous and correcting drilling units toward which the pro-posed location would be moved, file a waiver or consent in writing agreeing to said exceptions.

5. That all available geological and engineering data concerning said formation indicate that one well will efficiently and economically drain an area of approximately 80-acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one well producing from said Shannon formation.

ORDER

NOW, THEREFORE, IT IS ORDERED that the following rules and regula-tions shall apply hereafter to wells drilling, completed, or recompleted in the Shannon formation, underlying the Spindle 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. Eighty (80) acre drilling and spacing units shall be and the same are hereby established for the production of oil and associated hydrocarbons from the Shannon formation underlying the following described lands in the Spindle Field, Weld County, Colorado, to-wit:

Township 1 North, Range 68 West, 6th P.M. Section 1: All Section 10: All Section 2: All Section 11: All Section 3: All Section 12: All Township 2 North, Range 67 West, 6th P.M. Section 19: All Section 30: All Section 20: All Section 31: All Section 29: All Section 32: All Township 2 North, Range 68 West, 6th P.M. Section 25: All Section 35: All Section 26: All Section 36: All Section 34: All

Rule 2. Said drilling units shall consist of eighty (80) acres, 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 such drilling unit shall be located in the center of the NE/4 and SW/4 of each quarter section, with a tolerance of 200 feet in any direction from said location to avoid surface hazards or obstructions; however, the Director may, without additional notice and hearing, grant exceptions to the permitted well locations to avoid hazardous conditions in drilling near mines, mine shafts, water supply sources, or surface conditions, provided the owners of the contiguous and cornering drilling units toward which the proposed location would be moved, file a waiver or consent in writing agreeing to said exceptions.

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IT IS FURTHER ORDERED, that the rules and regulations contained herein 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, rules and regulations.

ORDERED this 19th day of September, 1972.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO By Frank J. Piro, Secretary

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