IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE PYRAMID FIELD, ADAMS COUNTY, COLORADO Cause No. 261 Order No. 261-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 21, 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 Sundance Oil Company for an order establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons, and also to establish 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "D" Sand underlying certain lands in Adams 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 there has not been sufficient development to determine if the "D" Sand is a common source of supply of oil and associated hydrocarbons underlying the area and there was insufficient evi-dence to indicate that one well will efficiently and economically drain 80-acres; therefore that part of the application as submitted, pertaining to 80-acre drilling and spacing units, should be denied.

4. That evidence presented at the hearing indicates that the "D" Sand constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Adams County, Colorado, to-wit:

Township 1 South, Range 60 West, 6th P.M. Section 4: W/2 Section 7: All Section 5: All Section 8: All Section 6' All Section 9: W/2

5. 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 "D" 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 he designated at the time of filing the permit to drill; that the permitted well for each

(over) unit be located in the center of the NW/4 and SE/4 of each section, with a tolerance of 150-feet in any direction and the well No. 1-8 Murphy located in the NW/4 NW/4 Section 8, Township 1 South, Range 60 West, 6th P.M., should be considered an exception and be the permitted well for the unit upon which it is located.

6. That all available geological and engineering data concerning said "D" 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 "D" 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 "D" Sand underlying the Pyramid 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 "D" Sand underlying the following described lands in the Pyramid Field, Adams County Colorado to-wit:

Township 1 South, Range 60 West, 6th P.M. Section 4: W/2 Section 7: All Section 5: All Section 8: All Section 6: All Section 9: W/2 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; that the permitted well for each unit be located in the center of the NW/4 and SE/4 of each section, with a tolerance of 150-feet in any direction and the well No. 1-8 Murphy, located in the NW/4 NW/4 Section 8, Township 1 South, Range 60 West, 6th P.M. shall be considered an exception and be the permitted well for the unit upon which it is located.

IT IS FURTHER ORDERED, that the provisions contained in the above orders 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 8th day of December, 1972.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(#261-1)