REPORT OF THE COMMISSION

This cause came on for hearing before the Commission June 19, 2973 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 Amoco Production Company, for an order establishing 80-acre drilling and spacing units for the production of oil from the Sussex formation, underlying certain lands in Adams and Weld Counties, Colorado. An application was filed by Smitherman Oil and Gas Company requesting that the area as described in the Amoco application be extended to include two additional sections.

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 no objection was offered to the application of Smitherman Oil and Gas Company to extend the area to include two additional sections.

4. That evidence presented at the hearing indicates that the Sussex forma-tion constitutes a common source of supply of oil underlying the following described lands in Adams and Weld Counties, Colorado, to-wit: Township 1 North, Range 67 West, 6th P.M. Section 28: All Section 31: All Section 29: All Section 32: All Section 30: All Section 33: All Township 1 South, Range 67 West, 6th P.M. Section 4: All Section 7: All Section 5: All Section 8: All Section 6: All

5. 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 unnecessary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be made establishing 80-acre drilling and spacing units for the production of oil from the Sussex formation, common source of supply underlying the lands defined herein; that said units should be 80-acre drilling units, and consisting of the E/2 and W/2 or the N/2 and S/2 of each quarter section, according to the

(over) 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 NW/4 and SE/4 of each quarter section, with a tolerance of 200 feet in any direction from said location to avoid surface hazards or obstructions; 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 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, [lie a waiver or consent in writing agreeing to said exceptions.

6. That the Well No. 1 Bryce Bredehoft, located 1950 feet from the south line and 1850 feet from the west line of Section 6, Township 1 South, Range 67 West, 6th. P.M., should be considered an exception and be the permitted well for the unit consisting of the N/2 SW/4 of said Section 6.

7. That all available geological and engineering data concerning said Sussex 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 Sussex formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to wells drilled, completed, or recompleted in the Sussex formation, underlying the Surrey 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 from the Sussex formation underlying the following described lands in the Surrey Field, Adams and Weld Counties, Colorado, to-wit: Township 1 North, Range 67 West, 6th P.M. Section 28: All Section 31: All Section 29: All Section 32: All Section 30: All Section 33: All Township 1 South, Range 67 West, 6th P.M. Section 4: All Section 7: All -- Section 5: All Section 8: All Section 6: 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 quarter 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 NW/4 and SE/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 corner-ing drilling units toward which the proposed location would be moved, file a waiver or consent in writing agreeing to said exceptions.

-- 2 --(#266-1)

IT IS FURTHER ORDERED, that the Well No. 1 Bryce Bredehoft, located 1950 feet from the south line and 1850 feet from the west line of Section 6, Township 1 South, Range 67 West, 6th P.M., shall be considered an exception and be the permitted well for the unit consisting of the N/2 SW/4 of said Section 6.

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 June, 1973.

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

#266-1