REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 17, 1974, 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 Zoller and Danneberg, Inc. for an order establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying certain lands in Elbert 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 the Commission, on June 19, 1973, issued its Order No. 2681 which, among other things, established 80-acre drilling and spacing units for the produc-tion of oil and associated hydrocarbons from the "J" Sand underlying all of Sections 1, 2, 11 and 12, Township 6 South, Range 62 West, 6th P.M., Elbert County, Colorado.

4. That evidence presented at the hearing indicates that the "J" Sand con-stitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Elbert County, Colorado, to-wit: Township 6 South, Range 62 West, 6th P.M. Section 1: S/2 Section 13: All Section 11: E/2 Section 14: E/2 Section 12: 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 unneces-sary wells; and to insure proper and efficient development and promote conservation of the gas 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 "J" Sand, a common source of supply underlying the lands defined herein; that said units should be 320-acres, more or less and be numbered and described as follows: (over)

Unit No. 1: Section 1: S/2 Unit No. 2: Section 12: N/2 Unit No. 3: Section 12: S/2 Unit No. 4: Section 13: N/2 Unit No. 5: Section 13: S/2 Unit No. 6: Section 14: E/2 Unit No. 7: Section 11: E/2 and the permitted well for each drilling unit should be located in the center of the NW/4 NW/4 or the NW/4--SE/4 of each section, with a tolerance of 200 feet in any direction, and that Well No. 1-12 Whitehead, located in the NW/4 NW/4 of said Section 12, be the permitted well for Unit No. 2.

6. That based on current economic Conditions, for the purposes of this hearing a gas well should be defined as one that has a gas-oil ratio of fifteen thousand (15,000) cubic feet per barrel, or more.

7. That all available geological and engineering data concerning said "J" 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 drained by one well producing from said "J" Sand.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or recompleted in the "J" Sand under-lying that portion of the Doubletree 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 "J" Sand underlying the lands described in Finding 3 herein for the Doubletree Field, Elbert County, Colorado. Rule 2. Said drilling units shall consist of three hundred twenty (320) acres more or less, and shall be numbered and described as follows: Township 6 South, Range 62 West, 6th P.M. Unit No. 1: Section 1: S/2 Unit No. 2: Section 12: N/2 Unit No. 3: Section 12: S/2 Unit No. 4: Section 13: N/2 Unit No. 5: Section 13: S/2 Unit No. 6: Section 14: E/2 Unit No. 7: Section 11: E/2

Rule 3. The permitted well for each such drilling unit shall be located in the center of the NW/4 NW/4 or the NW/4 SE/4 of each section, with a tolerance of 200 feet in any direction and Well No. 1-12 Whitehead located in the NW/4 NW/4 of said Section 12 shall be the permitted well for Unit No. 2.

2 (#268-2)

IT IS FURTHER ORDERED, that for the area described herein as well as that area described in Order No. 268-1, a well shall be deemed to be a gas well if the gas-oil ratio is fifteen thousand (15,000) cubic feet per barrel, or more.

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 17th day of September, 1974.

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

-- 3 (#268-2)

BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION ) AND ESTABLISHMENT OF FIELD RULES TO ) CAUSE NO. 268 GOVERN OPERATIONS IN THE DOUBLETREE ) FIELD, ELBERT COUNTY, COLORADO ) ORDER NO. 268-2

CORRECTION OF ORDER TO ALL INTERESTED PERSONS AND TO WHOM IT MAY CONCERN:

On September 17, 1974, the Commission issued its Order No. 268-2, which established 320-acre drilling and spacing units in the Doubletree Field.

Rule 1 of the Order should be corrected to read as follows:

Three Hundred Twenty (320) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the "J" Sand underlying the lands described in Finding 4 herein for the Doubletree Field, Elbert County, Colorado.

DATED this 2nd day of October, 1974.

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