IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE MUSKRAT FIELD, ARAPAHOE COUNTY, COLORADO Cause No. 297 Order No. 297-3

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 Sandlin Oil Corporation for an order granting an exception to the permitted well location as provided for in Order No. 297-1, and for a well to be in the center of the NE/4 Section 22, Township 4 South, Range 61 West, both with a tolerance of 200 feet in any direction.

FINDINGS

The Commission finds as follows:

1. Sandlin Oil Corporation, 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 May 20, 1975, the Commission issued Order No. 297--1 for the Muskrat Field, which established 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand. The units consist of the E/2 and W/2, or the N/2 and S/2 of each section, with the permitted well located in the SE/4 and NW/4 of each section with a tolerance of 200 feet in any direction.

6. Evidence presented at the hearing indicates that wells drilled at the permitted well locations in said Section 14 were completed as dry holes, as well as a well drilled in the permitted location in said Section 22; therefore, exceptions to the permitted well locations should be granted for a well to be drilled in the center of the SW/4 of Section 14, Township 4 South, Range 61 West, with a tolerance of 200 feet in any direction. However, if commercial wells are completed at the locations set forth above, the Commission should, upon application of any interested person, take such action as will offset any advantage which the person securing the exceptions may have over other producers by reason of drilling the wells as exceptions, including suitable provisions to prevent the production from each drilling unit of more than its just and equitable share of gas from the pool.

ORDER

NOW, THEREFORE, IT IS ORDERED, that exceptions are hereby granted to the provisions of Order No. 297-1 for a well to be drilled in the center of the SW/4 Section 14, Township 4 South, Range 61 West, 6th P.M., with a tolerance of 200 feet in any direction, and a well to be drilled in the center of the NE/4 Section 22, Township 4 South, Range 61 West, 6th P.M., Muskrat Field, Arapahoe County, Colorado, and that they be the permitted well for the unit upon which each is located; however, 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 each well as an exception.

2 " (297-3)

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

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

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary (297-3)