REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 15, 1983 at 9:00 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Amoco Production Co., for an order granting an exception to the permitted well location as provided for in Order No. 288-1, and allow a well to be drilled at a location in the NW/4NW/4 Section 31, Township 3 South, Range 59 West, 6th P.M., Adams County, and a well to be drilled in the SE/4NW/4 Section 6, Township 4 South, Range 59 West, 6th P.M., Arapahoe County, Colorado.

FINDINGS

The Commission finds as follows:

1. Amoco Production Co., as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

2. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

3. 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.

4. On March 19, 1974, the Commission issued Order No. 288-1 which established 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "J" Sand underlying lands in the Lone Tree Field, Adams and Arapahoe Counties, Colorado. The units consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section with the permitted well located in the center of the NE/4 and SW/4 of each quarter section with a tolerance of 200 feet. The spaced area was extended by Order No. 288-14.

5. A producing well has been drilled at the permitted well locations in the SW/4NW/4 of said Section 31 and in the NE/4NW/4 of said Section 6. Both wells are capable of production at low rates.

6. Due to geological conditions, the existing wells, as described in Finding 5 herein, are insufficient to adequately drain the oil and gas from the "J" Sand underlying the drilling and spacing unit upon which they are located. Therefore, exceptions should be granted for a well to be drilled in the NW/4NW/4 Section 31, Township 3 South, Range 59 West, 6th P.M., Adams County, and a well to be drilled at a location in the SE/4NW/4 Section 6, Township 4 South, Range 59 West, 6th P.M., Arapahoe County, and that upon completion as commercial wells, they be the permitted wells for the units upon which each is located, provided said existing wells are shut-in.

7. If a commercial well is completed at either location as set forth above, the Commission should, upon application of any interested person, take such action as will offset any advantage which the person securing each exception may have over other producers by reason of the drilling of each well as an exception, including suitable provisions to prevent production from the drilling unit of more than its just and equitable share of oil and gas from the reservoir.

ORDER

NOW, THEREFORE, IT IS ORDERED, that an exception to the permitted well location, as provided for in Order No. 288-1, is hereby granted for a well to be drilled in the NW/4NW/4 Section 31, Township 3 South, Range 59 West, 6th P.M., Adams County, and a well to be drilled in the SE/4NW/4 Section 6, Township 4 South, Range 59 West, 6th P.M., Arapahoe County, and that they shall be considered the permitted well for the unit upon which each is located provided the existing wells, described in Finding 5 herein, shall be shut-in.

IT IS FURTHER ORDERED that If a commercial well is completed at either location as set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing each exception may have over other producers by reason of the drilling of each well as an exception, including suitable provisions to prevent production from the drilling unit of more than its just and equitable share of oil and gas from the reservoir.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

ENTERED THIS 9th day of September, 19 as of August 15, 1983.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary -- 2 (288-16)