REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 21, 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 Texas Oil & Gas Corporation and Anschutz Corporation, for an order establishing 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Morrow formation under-lying certain lands in Bent 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 insufficient evidence was presented at the hearing to indicate that the total area as presented in the application is underlain by a common source of supply of gas and associated hydrocarbons and that the applicant will drill a well, located in the center of the NE/4 Section 35, Township 22 South, Range 49 West, 6th P.M., which will provide additional information to be presented at the next scheduled meeting of the Com-mission in order to determine if the following described lands in Bent County, Colorado should also be included in the area to be spaced:

Township 22 South, Range 48 West, 6th P.M. Section 30: All Section 32: All Section 31: All (InClUding the portion of Indian Claim No. 21 located therein) Township 22 South, Range 49 West, 6th P.M. Section 13: All Section 25: All Section 14: All Section 26: All Section 15: All Section 27: All Section 22: All Section 34: All (Including the portion Section 23: All of Indian Claim No. 20 Section 24: All located therein) Section 35: All (Including the portion of Indian Claim Nos. 20 and 21 located therein) Section 36: All (Including the portion of Indian Claim No. 21 located therein)

(over)

4. That evidence presented at the hearing indicates that the Morrow formation constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Bent County, Colorado, to-wit: Township 23 South, Range 48 West, 6th P.M. Section 3: All Section 17: All Section 4: All Section 18: All Section 5: All Section 19: All Section 6: All (Including Section 20: All the portion of Indian Section 21: All Claim No. 21 located Section 22: All therein) Section 27: All Section 7: All Section 28: All Section 8: All Section 29: All Section 9: All Section 30: All Section 10: All Section 15: All Section 16: All Township 23 South, Range 49 West, 6th P.M. Section 1: All Section 12: All Section 2: All

5. That in order to prevent the waste of gas, as defined by law, to pro-tect 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 gas resources of the State, an order should be made establishing 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Morrow formation, common source of supply underlying the lands defined in Finding 4 herein; that said units should be 640-acres, more or less, and consisting of a section accord-ing to the governmental survey thereof; and that the permitted well for each such drilling unit should be located no closer than 1320 feet to the boundaries of the section upon which it is located.

6. That the Director may, without additional notice and hearing, grant exceptions to the permitted well location to avoid hazardous conditions in drilling near mines, mine shafts, water supply sources, or surface conditions or obstructions, pro-vided the owners of the contiguous and cornering drilling units file with the Commission a waiver or consent in writing agreeing to said exception.

7. That all available geological and engineering data concerning said Morrow formation indicate that one well will efficiently and economically drain an area of approximately 640-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 Morrow 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 Morrow formation underlying the Wagon Trail Field herein described, in addition to other appli-cable rules and regulations and orders of the Commission, if any heretofore adopted and not in conflict herewith:

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Rule 1. Six Hundred Forty (640) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the Morrow formation underlying the following described lands in the Wagon Trail Field, Bent County, Colorado, to-wit: Township 23 South, Range 48 West, 6th P. M, Section 3: All Section 17: All Section 4: All Section 18: All Section 5: All Section 19: All Section 6: All (Including Section 20: All the portion of Indian Section 21: All Claim No. 21 located Section 22: All therein) Section 27: All Section 7: All Section 28: All Section 8: All Section 29: All Section 9: All Section 30: All Section 10: All Section 15: All Section 16: All

Township 23 South, Range 49 West, 6th P.M. Section 1: All Section 12: All Section 2: All

Rule 2. Said drilling units shall consist of six hundred forty (640) acres, more or less, and each such drilling unit shall consist of a section according to the governmental survey thereof, and the permitted well for each drilling unit shall be located no closer than 1820 feet to the boundaries of the section upon which it is located; 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 or obstructions, provided the owners of the contiguous and cornering drilling units file with the Commission a waiver or consent in writing agreeing to said exception.

IT IS FURTHER ORDERED, that the hearing in Cause No. 271 shall be continued until the next scheduled hearing date in order for the Commission to determine if the area as described in Finding 3 herein shall also be included in the total spaced area of the Wagon Trail Field.

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 21st day of August 1973.

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

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