IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION OF FIELD RULES TO GOVERN THE SPACING AND DENSITY OF OIL AND GAS WELLS IN THE ADENA FIELD, MORGAN COUNTY, COLORADO

)

CAUSES NO. 26 & 27

ORDER NO. 26-1 &

ORDER NO. 27-1

APPEARANCES

John R. Moran, Attorney for Petitioners, Denver, Colorado

William T. Butler, P.O. Box 271, Tulsa, Oklahoma,

W. M. Peck, L. A. Ogden and Louis M. Perry, appearing for Pure Oil Company.

David C. Savage, 405 Ross Bldg. Denver, Colorado, appearing for Pure Oil Company, Ryan Oil Company, and Davis Oil Company.

T. J. Weaver, J. Marks, F. Marks, and Monroe Marks, 616 Kittredge Bldg., Denver, Colorado, appearing for Tri-Mark Oil Company.

Wayne McDaniel, for Eddie Fisher.

Harry A. Trueblood, Jr. for Henderson Drilling Company.

R.I. Williams for Lion Oil Company.

Eric Williams and Patrick Westfeldt for Petroleum, Inc.

A. W. Cullen for McElroy Ranches.

E. I. Blincoe, for J. W. Braden Oil Company.

Mike Anglin, for Braden Oil Company and Henderson Drilling Company

Wilbur Rocchio, Assistant Attorney General,

A. J. Jersin, Deputy Director, and

D. V. Rogers, Petroleum Engineer, for the Commission

REPORT OF THE COMMISSION

This cause came on for further hearing before the Commission on January 19, 1954, at ten o'clock A.M., Room 704, State Capitol Annex, Sherman Street and 14th Avenue, Denver, Colorado, after publication of Notice of Hearing as required by law, on the petitions of Bill Tomberlin and Lion Oil Company in Cause No. 26 for an order from the Commission to establish drilling and spacing units for the production of oil in the Adena Field, and upon the petition of Lion Oil Company in Cause No. 27 for an order of the Commission establishing drilling and spacing units for the production of gas in the Adena Field, from both the "D" and "J" sand formations of the Dakota Series, common sources of the supply underlying Sections One (1), Two (2), Three (3), Ten (10), Eleven (11), Twelve (12), Thirteen (13), Fourteen (14), Fifteen (15), Twenty-two (22), Twenty-three (23), and Twenty-four (24), Township One (1) North, Range 58 West; West half (W½) of Section Four (4), West half (W½) of Section Nine (9), West half of Section Sixteen (16), West half (W½) of Section Twenty-One (21), Northwest Quarter (NW¼) of Section Twenty-Eight (28), North half (N½) of Section Twenty-None [sic] (29), North half (N½) of Section Thirty (30) and all of Sections Five (5), Six (6), Seven (7), Eight (8), Seventeen (17), Eighteen (18), Nineteen (19), and Twenty (20), Township One (1) North, Range 57 West; East half (E½) of Section Thirty-One (31), West half (W½) of Section Thirty-three (33) and all of Section Thirty-Two (32), Township Two (2) North, Range 57 West of the Sixth Principal Meridian, Morgan County, Colorado, which area is referred to in said petition as the Adena Field.

The applicants are the owners of oil and gas leases within the above described area, and have heretofore completed several wells therein. Evidence and testimony presented at the hearing disclose that one well will efficiently drain the recoverable oil underlying Forty (40) acres in the "D" and "J" sand formations of the Dakota Series in said Adena Field, and that Forty (40) acres is not smaller than the maximum area which can be efficiently drained by one well producing from said "D" and "J" sands, and that one well will efficiently drain the recoverable gas underlying One Hundred Sixty (160) acres in the "D" and "J" sand formations of the Dakota Series in the said Adena Field, and that One Hundred Sixty (160) acres is not smaller than the maximum area which can be efficiently drained by one well producing from said "D" and "J" sands.

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 "D" and "J" sand formations of the Dakota Series in the Adena Field as used herein, constitute common sources of supply underlying the following described lands in Morgan County, Colorado:

Sections One (1), Two (2), Three (3), Ten (10), Eleven (11), Twelve (12), Thirteen (13), Fourteen (14), Fifteen (15), Twenty-Two (22), Twenty-Three (23) and Twenty-Four (24), Township One (1) North, Range 58 West; West half (W½) of Section Four (4), West half (W½) of Section Nine (9), West half (W½) of Sixteen (16), West half (W½) of Section Twenty-One (21), Northwest Quarter (NW¼) of Section Twenty-Eight (28), North half (N½) of Section Twenty-Nine (29), North half (N½) of Section Thirty (30) and all of Sections Five (5), Six (6), Seven (7), Eight (8), Seventeen (17), Eighteen (18), Nineteen (19), and Twenty (20), Township One (1) North, Range 57 West, East half (E½) of Section Thirty-One (31), West half (W½) of Section Thirty-Three (33), and all of Section Thirty-Two (32), Township Two (2) North, Range 57 West of the Sixth Principal Meridian, Morgan County, Colorado.

4. That in order to prevent waste of oil and gas as defined in the Colorado Oil and Gas Conservation Act of 1951, as amended, and to prevent the drilling of unnecessary wells, an order should be made establishing Forty (40) acre drilling and spacing units for the production of oil from the said "D" and "J" sand formations of the Dakota Series, common sources of supply underlying said land, as defined herein; that said units should be Forty(40) acre drilling and spacing units according to the governmental survey thereof, and the permitted oil well for each unit should be located in the center of the Southeast Quarter of each quarter quarter section according to the governmental survey thereof; and a tolerance of Fifty (50) feet in any direction from the prescribed location should be permitted to avoid surface hazards and obstructions.

5. That in order to prevent waste of oil and gas as defined in the Colorado Oil and Gas Conservation Act of 1951, as amended, and to prevent the drilling of unnecessary wells, an order should be made establishing One Hundred Sixty (160) acre drilling and spacing units for the production of gas from the said "D" and "J" sand formations of the Dakota Series, common sources of supply underlying said land, as defined herein; that said units should be One Hundred Sixty (160) acre drilling and spacing units according to the governmental survey thereof, and the permitted gas well for each unit should be located in the center of the Southeast Quarter of any quarter quarter section contained in each said One Hundred Sixty (160) acre unit according to the governmental survey thereof; and a tolerance of Fifty (50) feet in any direction from the prescribed location should be permitted to avoid surface hazards and obstructions.

6. That all available geological and engineering data concerning the said "D" and "J" sand formations of the Dakota Series in said Adena Field indicate that one well should efficiently and economically drain an area of approximately Forty (40) acres as to oil, and that units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one oil well producing from the said "D" and "J" sand formations of the Dakota Series.

7. That all available geological and engineering data concerning the said "D" and "J" sand formations of the Dakota Series in said Adena Field indicate that one well should efficiently and economically drain an area of approximately One Hundred Sixty (160) acres as to gas, and that units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one gas well producing from the said "D" and "J" sand formations of the Dakota Series.

8. That exceptions should be allowed for the following oil wells located on Forty (40) acre drilling and spacing units, and that each of said wells should be the permitted well for each Forty (40) acre drilling and spacing unit on which it is located:

Petroleum, Inc.

#1 H.J. Clar,

Center of the Southwest Quarter of the Southwest Quarter of the Southeast Quarter (SW¼ SW¼ SE¼) of Section Thirteen (13), Township One (1) North, Range Fifty-Eight (58) West.

Lion Oil Company

#2 Nichols

Center of the Northwest Quarter of the Northwest Quarter of the Northeast Quarter (NW¼ NW¼ NE¼) of Section Twenty-four (24), Township One (1) North, Range Fifty-Eight (58) West.

9. That exceptions should be allowed for the following gas wells located on One Hundred Sixty (160) acre drilling and spacing units, and that each of said wells should be the permitted well for each One Hundred Sixty (160) acre drilling and spacing unit on which it is located:

Falcon Seaboard Drilling Company #1 Scritsmier	Center of the Northwest Quarter of the Northeast Quarter of the Northeast Quarter (NW¼ E¼ NE¼) of Section Nineteen (19), Township One (1) North, Range Fifty-Seven (57) West.

Falcon-Seaboard Drilling Company #1 Snodgrass	Center the Northwest Quarter of the Northeast Quarter of the Northwest Quarter (NW¼ NE¼ NW¼) of Section Twenty (20), Township One (1) North, Range Fifty-Seven (57) West.

U.S. Smelting, Refining & Mining Company #1 Glenn	Center of the Northwest Quarter of the Southeast Quarter of the Southeast Quart-er (NW¼SE¼SE¼) of Section Thirty-Two (32), Township Two (2) North, Range Fifty-Seven (57) West.

Tri-Mark Oil Company #1 Glenn-Ranches	Center of the Northwest Quarter of the Northwest Quarter of the Southeast Quart-er (NW¼ NW¼ SE¼) of Section Five (5), Township One (1) North, Range Fifty-Seven (57) West.

10. Should any one of the following wells become a gas well, it should then be the permitted well for the One Hundred Sixty (160) acre drilling and spacing unit on which it is located, provided, however, that no other gas well has been previously designated as the permitted well for said unit. Should any one of the following wells become an oil well, it should then be the permitted well for the Forty (40) acre drilling and spacing unit on which it is located. These wells have been approved by the Commission as to their location, but they are not completed as of this date:

Eddie Fisher-V. H. Simmons #1 Glenn-Stephen-son, et al	Center of the Northwest Quarter of the Northwest Quarter of the Northeast Quarter (NW¼ NW¼ NE¼) of Section Five (5), Township One (1) North, Range Fifty-Seven (57) West.

U.S. Smelting, Refining & Mining Company #2 Howard Glenn	Center of the Northwest Quarter of the Northwest Quarter of the Southeast Quart-er (NW¼ NW¼ SE¼) of Section Thirty-Two (32), Township Two (2) North Range Fifty-Seven (57) West.

U.S. Smelting, Refining & Mining Company #1 Glenn-Biddle	Northwest Quarter of the Northeast Quarter of the Southwest Quarter (NW¼ NE¼ SW¼) of Section Thirty-Two (32), Town-ship Two (2) North, Range Fifty-Seven (57) West.

ORDER

IT IS THEREFORE ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed or recompleted in the "D" and "J" sand formations of the Dakota Series of the Adena Field, in Morgan County, Colorado, as hereinabove defined in the findings, which by reference are made a part hereof, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith.

Rule 1. The following drilling and spacing units shall be and the same are hereby established for the production of oil and gas from the "D" and "J" sands of the Dakota Series, common sources of supply underlying:

Sections One (1), Two (2), Three (3), Ten (10), Eleven (11), Twelve (12), Thirteen (13), Fourteen (14), Fifteen (15), Twenty-Two (22), Twenty-Three (23), and Twenty-Four (24), Township One (1) North, Range 58 West; West half (W½) of Section Four (4), West half (W½) of Section Nine (9), West half (W½) of Section Sixteen (16), West half (W½) of Section Twenty-One (21), Northwest Quarter of Section Twenty-Eight (28), North half (N½) of Section Twenty-Nine (29), North half (N½) of Section Thirty (30) and all of Sections Five (5), Six (6), Seven (7), Eight (8), Seventeen (17), Eighteen (18), Nineteen (19), and Twenty (20), Township One (1) North, Range 57 West; East half (E½) of Section Thirty-One (31), West half (W½) of Section Thirty-Three (33), and all of Section Thirty-Two (32), Township Two (2) North, Range 57 West of the Sixth Principal Meridian, Morgan County, Colorado.

(A) Forty (40) acre drilling and spacing units, according to the governmental survey thereof, for the production of oil. The permitted oil well for each unit shall be located one (1) well in the center of the Southeast Quarter of each quarter quarter Section according to the governmental survey thereof, and that a tolerance of Fifty (50) feet in any direction from the prescribed location shall be permitted only where surface obstructions or hazards make it unduly hazardous or expensive to drill in the prescribed location.

(B) One Hundred Sixty (160) acre drilling and spacing units, according to the governmental survey thereof, for the production of gas. The permitted gas well for each unit shall be located one well in the center of the Southeast Quarter of any quarter quarter Section contained in each said One Hundred Sixty (160) acre unit according to the governmental survey thereof, and that a tolerance of Fifty (50) feet in any direction from the prescribed location shall be permitted only where surface obstruction or hazards make it unduly hazardous or expensive to drill in the prescribed location.

IT IS FURTHER ORDERED, that exceptions are hereby allowed for the following oil wells located on Forty (40) acre drilling and spacing units, and that each of said oil wells shall be the permitted well for each Forty (40) acre drilling and spacing unit on which it is located:

Petroleum, Inc.

#1 H.J. Clar,

Center of the Southwest Quarter of the Southwest Quarter of the Southeast Quarter (SW¼ SW¼ SE¼) of Section Thirteen (13), Township One (1) North, Range Fifty-Eight (58) West.

Lion Oil Company

#2 Nichols

Center of the Northwest Quarter of the Northwest Quarter of the Northeast Quarter (NW¼ NW¼ NE¼) of Section Twenty-four (24), Township One (1) North, Range Fifty-Eight (58) West.

IT IS FURTHER ORDERED, that exceptions are hereby allowed for the following gas wells located on One Hundred Sixty (160) acre drilling and spacing units, and that each of said gas wells shall be the permitted well for each One Hundred Sixty (160) acre drilling and spacing unit on which it is located:

Falcon Seaboard Drilling Company #1 Scritsmier	Center of the Northwest Quarter of the Northeast Quarter of the Northeast Quarter (NW¼ E¼ NE¼) of Section Nineteen (19), Township One (1) North, Range Fifty-Seven (57) West.

Falcon-Seaboard Drilling Company #1 Snodgrass	Center the Northwest Quarter of the Northeast Quarter of the Northwest Quarter (NW¼ NE¼ NW¼) of Section Twenty (20), Township One (1) North, Range Fifty-Seven (57) West.

U.S. Smelting, Refining & Mining Company #1 Glenn	Center of the Northwest Quarter of the Southeast Quarter of the Southeast Quart-er (NW¼SE¼SE¼) of Section Thirty-Two (32), Township Two (2) North, Range Fifty-Seven (57) West.

Tri-Mark Oil Company #1 Glenn-Ranches	Center of the Northwest Quarter of the Northwest Quarter of the Southeast Quart-er (NW¼ NW¼ SE¼) of Section Five (5), Township One (1) North, Range Fifty-Seven (57) West.

IT IS FURTHER ORDERED, that should any one of the following wells become a gas well, it shall then be the permitted gas well for the One Hundred Sixty (160) acre drilling and spacing unit on which it is located, provided, however, that no other gas well has been previously designated as the permitted gas well for said unit: Should any one of the following wells become an oil well, it shall then be the permitted oil well for the Forty (40) acre drilling and spacing unit on which it is located:

Eddie Fisher-V. H. Simmons #1 Glenn-Stephen-son, et al	Center of the Northwest Quarter of the Northwest Quarter of the Northeast Quarter (NW¼ NW¼ NE¼) of Section Five (5), Township One (1) North, Range Fifty-Seven (57) West.

U.S. Smelting, Refining & Mining Company #2 Howard Glenn	Center of the Northwest Quarter of the Northwest Quarter of the Southeast Quart-er (NW¼ NW¼ SE¼) of Section Thirty-Two (32), Township Two (2) North Range Fifty-Seven (57) West.

U.S. Smelting, Refining & Mining Company #1 Glenn-Biddle	Northwest Quarter of the Northeast Quarter of the Southwest Quarter (NW¼ NE¼ SW¼) of Section Thirty-Two (32), Town-ship Two (2) North, Range Fifty-Seven (57) West.

IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective forthwith, and henceforth the commencement of the drilling of any well or wells in the "D" and "J" sand formations of the Dakota Series, as defined herein, for the purpose of producing oil and gas therefrom, at a location other than authorized by this Order, is hereby prohibited.

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 rules and regulations.

ORDERED this 19th day of January, 1954, by the Oil and Gas Conservation Commis-sion of the State of Colorado.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Annabel Hogsett, Assistant Secretary