REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 16, 1978 at 9 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Beaver Mesa Exploration Co. . for an order approving a certain Unit Agreement and Unit Operating Agreement, and further approving a proposed plan for injection of water into the "D" Sand underlying certain lands in Weld 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 "D" Sand underlying the Lanyard "D" Sand Unit; as set forth in the Unit Agreement by the applicant, constitutes a common source of supply of oil and gas, and that said Unit consists of the following described lands in Weld County, Colorado, to-wit: Township 2 North, Range 62 West, 6th P.M. Section 7: S/2SE/4 Section 8: SW/4SW/4 Section 18: NE/4, SW/4, E/2NW/4, SW/4NW/4, N/2SE/4, SW/4SE/4

4. That the terms and conditions provided in the Unit Agreement and Unit Operating Agreement are just and reasonable to all interests contained within said "D" Sand Unit Area and that said agreements as presented by the applicant are necessary to increase the ultimate recovery of oil and gas from said reservoir.

5. That the proposed water flood operation for secondary recovery is necessary to increase the ultimate recovery of oil and gas, and that such operation, pursuant to said Unit Agreement and Unit Operating Agreement, will result in an esti-mated additional recovery of oil and gas with a value in excess of the estimated addi-tional cost incident to conducting such operation.

6. That testimony presented at the hearing stated that said Unit Agreement and Unit Operating Agreement have been approved in writing by more than eighty percent (80%) of those persons who, under the agreement will be required to pay the costs of the unit operation, and also by more than eighty percent (80%) of the owners of the production of proceeds attributable to royalty, overriding royalty, and production payments.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to the lands set forth in this order, in addition to other appli-cable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

(over)

Rule 1. The "D" Sand underlying the Lanyard "D" Sand Unit Area as set forth in the Unit Agreement presented by the applicant constitutes a common source of supply of oil and gas underlying said Unit Area composed of the following lands in Weld County, Colorado, to-wit:

Township 2 North, Range 62 West, 6th P.M. Section 7: S/2SE/4 Section 8: SW/4SW/4 Section 18: NE/4, SW/4, E/2NW/4, SW/4NW/4, N/2SE/4, SW/4 SE/4 Rule 2. Said Unit Agreement and Unit Operating Agreement covering the Lanyard "D" Sand Unit Area herein defined, and providing for unit operations of the "D" Sand underlying said Unit Area, is hereby approved.

Rule 3. The waterflood project for the "D" Sand reservoir of the Lanyard "D" Sand Unit Area, as presented by the applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject water into said reservoir through Well No. 24-18 Andrews, SE/4SW/4 Section 18, Well No. 14-8 Vernon Preston, SW/4SW/4 Section 8, and Well No. 44-7 Vernon Preston, BE/4BE/4 Section 7, Township 2 North, Range 62 West, 6th P.M. and further, to utilize any other wells in the Unit Area whenever it is determined by the operator to be necessary.

IT IS FURTHER ORDERED, that the rules and regulations contained herein 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 16th day of January, 1978.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary (#292 -2 )