REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 15, 1974 at 9 A.M., in the Department of Revenue Hearing Room, State Capitol Annex, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Norris Oil Company, for an order establishing a 640-acre drilling unit for the production of gas and associated hydrocarbons from the Cedar Mountain formation underlying certain lands in Rio Blanco 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 Cedar Mountain formation constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Rio Blanco County, Colorado, to-wit:

Township 4 South, Range 102 West, 6th P.M. Section 35: All

4., That in order to prevent waste of oil and gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of un-necessary wells, and to insure proper and efficient development and promote conserva-tion of the oil and gas resources, an order should be made establishing a 640-acre drill-ing and spacing unit for the production of gas and associated hydrocarbons from the Cedar Mountain formation, a common source of supply underlying the lands defined herein; that said unit should be 640-acres and consist of the lands as herein described, and the permitted well for said unit should be the No. 1 Steele, located 1250 feet from the North line and 2525 feet from the West line of said Section 35, and further, to pre-vent waste, the gas so produced from said unit should either be (1) marketed and sold to supply domestic, industrial, or municipal needs; or (2) used for lease development or operations and fuel.

5. That all geological and engineering data concerning the Cedar Mountain formation indicate that one well will efficiently and economically drain an area of appro-ximately 640-acres, and that the drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently drained by one well producing from said Cedar Mountain formation.

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ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to a well drilled, completed, or recompleted in the Cedar Mountain formation underlying the Foundation Creek Field, herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, hereto-fore adopted and not in conflict herewith:

Rule 1. A Six Hundred Forty (640) acre drilling and spacing unit shall be and the same is hereby established for the production of gas and associated hydrocarbons from the Cedar Mountain formation underlying the following described lands in the Founda-tion Creek Field, Rio Blanco County, Colorado, to-wit:

Township 4 South, Range 102 West, 6th P.M. Section 5: All

Rule 2. The permitted well for the above described unit shall be the No. 1 Steele well, located 1250 feet from the North line and 2525 feet from the West line of said Section 5.

IT IS FURTHER ORDERED, that the gas so produced from said unit shall be either (1) marketed and sold to supply domestic, industrial or municipal needs; or (2) used for lease development or operations and fuel.

IT IS FURTHER ORDERED, that the provisions contained in the above order 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 order.

ORDERED this 15th day of January 1974.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary -- 2 --

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