REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 19, 1973 at 9 A.M., in the Auditorium, Social Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Edward Mike Davis for an order granting an exception to Order No. 254-1 for a well to be drilled in the NE/4 of Section 28, Township 2 South, Range 62 West, 6th P.M., Longbranch Field, Adams County, Colorado and that such well be located no closer than 990 feet from any bound-ary of the quarter section, and that it be the permitted well for the drilling unit consis-ting of the E/2 of said Section 28.

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 April 18, 1972, the Commission issued its Order No. 254-1 which, among other things, established 320-acre drilling and spacing units for the pro-duction of gas and associated hydrocarbons from the "J" Sand, said units to consist of the E/2 and W/2 or the N/2 and S/2 of each section with the permitted well to be located in the NW/4 and SE/4 of each section and no closer than 990 feet to the boundaries of the quarter section upon which the well is located.

4. That Webb Resources, Inc., with its associates, are the lessees of 87/2 percent of Section 28, Township 2 South, Range 62 West, 6th P.M and Edward Mike Davis is the lessee on the remaining 12/2 percent, being a 50 percent interest in the NE/4 of said section.

5. That Webb Resources on May 11, 1973, obtained approval to drill a well in the NE/4 SE/4 of Section 28 and also a well in the SE/4 NW/4 of Section 28, and has designated the drilling units to be the E/2 and W/2 of said section and has represented to the Commission that it is prepared to commence the drilling of the well in the SE/4.

6. That the Oil and Gas Conservation Commission has the duty to protect the correlative rights of owners and producers in a common pool or source of supply of oil and gas, and to protect the equities as provided for in 100-6-4(3) CRS 1963, as amended.

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7. That if Webb Resources does drill a well located in the SE/4 of said Section 28 within a reasonable period of time as it has represented it intends to do, the correlative rights of Edward Mike Davis will be protected. However, if Webb Re-sources does not drill a well as represented, or drills a well as a dry hole in said SE/4, Edward Mike Davis should be permitted to protect his correlative rights by being allowed to drill a well as an exception located in the NE/4 of Section 28, and no closer than 990 feet to the boundaries of the quarter section upon which it is located and that it be the permitted well for the unit consisting of the E/2 of said Section 28.

8. That in the event Edward Mike Davis drills a commercial well as an exception in the NE/4 of said Section 28, the operator may run casing and test such well, but that no production should be allowed until the Commission determines the rate of production. The results of the test should be reported to the Commission and Webb Resources and if such test results are submitted 15-days before the next scheduled hear-ing date, the Commission will notify the other interested parties that appeared at the hearing held June 19, 1973 and the Commission will hear evidence as to whether or not said well should be restricted pursuant to 100-6-4 (3) CRS 1963, as amended.

ORDER

NOW, THEREFORE IT IS ORDERED, that the application for an order granting an exception for a well to be drilled in the NE/4 of Section 28, Township 2 South, Range 62 West, 6th P.M., Longbranch Field, Adams County, Colorado is hereby denied provided that Webb Resources, Inc., commences to drill the well No. 28-9 Rice located in the NE/4 SE/4 of said Section 28 on or before September 8, 1973, and once commenced, such well to be drilled to completion in a period of time normal for wells in that area. IT IS FURTHER ORDERED, that if said well located in the SE/4 of Section 28 has not commenced drilling by September 8, 1973, or if such well is drilled and com-pleted as a dry hole, then upon proper application by Edward Mike Davis, the Director is authorized to approve a well to be drilled as an exception and located in the NE/4 of said Section 28 and no closer than 990 feet from the boundaries of the quarter section and that it be the permitted well for the designated unit consisting of the E/2 of said Section 28.

IT IS FURTHER ORDERED, that in the event Edward Mike Davis drills a commercial well as an exception in the NE/4 of said Section 28, the well shall be tested in accordance with good engineering practices, but no production shall be allowed until the Commission determines the rate of production. The results of the test shall be reported to the Commission and Webb Resources and if such test results are submitted 15-days before the next scheduled hearing date, the Commission shall notify the other interested parties that appeared at the hearing held June 19, 1973 and the Commission shall hear evidence as to whether or not said well shall be restricted pursuant to 100-6-4(3) CRS 1963, as amended.

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

ORDERED this 26th day of June, 1973.

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

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