REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 18, 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 Belco Petroleum Corpo-ration for an order establishing 320-acre drilling and spacing units for the production of gas from the Dakota formation underlying certain lands in Garfield County. ColOrado, which lands include Section 33, Township 7 South. Range 104 West. 6th P.M., said section being subject to the provisions of Order No. 122-1 issued August 26, 1956 for the Prairie Canyon Field and the SE/4 Section 35 S/2 N/2 and S/2 Section 36, Township 7 South, Range 103 West, 6th P.M., which area is subject to the provisions of Order No. 109-1 issued October 15, 1957 for the Garmesa Area.

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 by its Order No. 122-1, Prairie Canyon Field, established a 640-acre drilling and spacing unit consisting of Section 33, Township 7 South, Range 104 West, 6th P.M., and said section was further communitized with the approval of the U.S. Geological Survey and to rescind Order No. 122-1, in order to include said section in the area requested to be spaced, would adversely affect the terms of the com-munitization agreement; therefore, said Section 33 should not be included in the area to be spaced and the provisions of Order No. 122-1 be kept in force except that an additional well should be allowed to be drilled in said Section 33 in conformance with the provisions of this order.

4. That the SE/4 Section 35, S/2 N/2 and S/2 Section 36, Township 7 South, Range 103 West, 6th P.M., should be deleted from the area subject to the provisions of Order No. 109-1 for the Garmesa Area and such area be made subject to the provisions of this order.

5. That evidence presented at the hearing indicates that the Dakota forma-tion constitutes a common source of supply of gas underlying the following described lands in Garfield County, Colorado, to-wit:

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Township 6 South, Range 103 West,6th P.M. All Sections Township 6 South, Range 104 West,6th P.M. All Sections Township 6 South, Range 105 West,6th P.M. All Sections Township 7 South, Range 103 West,6th P.M. All Sections Township 7 South, Range 104 West,6th P.M. All Sections except Section 33 Township 7 South, Range 105 West,6th P.M. All Sections

6. 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 from the Dakota formation, common source of supply underlying the lands defined herein; that said units should be 320-acres, more or less, and consist of the E/2 and W/2 or the N/2 and S/2 of a section according to the governmental survey; however, in order to protect correlative rights, two drilling and spacing units should be designated, one to consist of the SE/4 Section 34 and the SW/4 Sec-tion 35, the other to consist of the NE/4 Section 34 and the NW/4 Section 35, Township 6, South, Range 104 West, 6th P.M., and that because of the fractional nature of Townships 6 and 7 South, Range 105 West, 6th P.M., each drilling and spacing unit should consist of each fractional section contained in each of these two townships. The permitted well for each unit should be located no closer than 300 feet from the boundaries of the unit and no closer than 1620 feet from any existing oil or gas well in or adjoining the spaced area; however, Well No. 4 South Canyon Govt., located in the NW/4 NE/4 Section 2, Town-ship 7 South, Range 104 West, 6th P.M., Well No. 1 Unit, located in the NW/4 NW/4 Section 8, Township 7 South, Range 103 West, 6th P.M., Well No. 2-18 West Salt Creek Govt., located in the NE/4 NW/4 Section 18, Township 7 South, Range 103 West, 6th P.M., Well No. 2-17 Baumgartner Federal, located in the NW/4 NE/4 Section 17, Township 7 South, Range 103 West, 6th P.M., and Well No. 2-29 Govt., located in the NW/4 NE/4 Section 29, Township 6 South, Range 104 West, 6th P.M., should be considered excep-tions and be the permitted wells for the units upon which they are located.

7. That all available geological and engineering data concerning said Dakota formation 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 escribed are not smaller than the maximum area that can be efficiently and economically rained by one well producing from said Dakota 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 Dakota formation underlying the South Canyon Area 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. Three Hundred Twenty (320) acre drilling and spacing units shall be and the same are hereby established for the production of gas from the Dakota forma-tion underlying the following described lands in the South Canyon A tea, Garfield County, Colorado, to-wit:

Township 6 South, Range 103 West, 6th P.M. All Sections Township 6 South, Range 104 West, 6th P.M. All Sections Township 6 South, Range 105 West, 6th P.M. All Sections Township 7 South, Range 103 West, 6th P.M. All Sections Township 7 South, Range 104 West 6th P.M. All Sections except Section 33 Township 7 South, Range 105 West, 6th P.M. All Sections

Rule 2. Said drilling units shall consist of three hundred twenty (320) acres, more or less, and each such unit shall be the E/2 and W/2 or the N/2 and S/2 of a section according to the governmental survey; however, two units shale be designated, one to consist of the SE/4 Section 34 and the SW/4 Section 35, the other to consist of the NE/4 Section 34 and the NW/4 Section 35, Township 6 South., Range 1.04 West, 6th P.M., and further each fractional section contained in Townships 6 and 7 South, Range 105 West, 6th P.M., shall be considered a drilling and spacing unit. The permitted well for each unit shall be located no closer than 300 feet from the boundaries of the unit and no closer than 1620 feet from any existing oil or gas well in or adjoining the spaced area; however, Well No. 4 South Canyon Govt., located in the NW/4 NE/4 Section 2, Township 7 South, Range 104 West, 6th P.M., Well No. 1 Unit, located in the NW/4 NW/4 Section 8, Township 7 South, Range 103 West, 6th P.M., Well No. 2-18 West Salt Creek Govt., located in the NE/4 NW/4 Section 18, Township 7 South, Range 103 West, 6th P.M., Well No. 2-17 Baumgartner Federal, located in the NW/4 NE/4 Section 17, Township 7 South, Range 103 West, 6th P.M., and Well No. 2-29 Govt., located in the NE/4 Section 29, Township 6 South, Range 104 West, 6th P.M., should be considered exceptions and be the permitted wells for the units upon which they are located.

IT IS FURTHER ORDERED, that Section 33, Township 7 South, Range 104 West, 6th P.M., shall remain subject to the provisions of Order No. 122-1 for the Prai-rie Canyon Field; however, an additional well for production of gas from the Dakota formation shall be allowed and shall be located in accordance with Rule 2 of this order.

IT IS FURTHER ORDERED, that the SE/4 Section 35, S/2 N/2 and the S/2 Section 36, Township 7 South, Range 103 West, 6th P.M., shall be deleted from the lands subject to the provisions of Order No. 109-1 fop the Garmesa Area and such lands shall be made subject to the provisions of this order.

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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 20th day of December 2973

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

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