IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE BEECHER ISLAND FIELD, YUMA COUNTY, COLORADO Cause No. 300 Order No. 300-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 16, 1975 at 9 Kkktt, in Room 532, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Kansas-Nebraska Natural Gas Co., Mountain Petroleum, Ltd. and Resources Exploration, Ltd., for an order establishing 640-acre drilling and spacing units for the production of gas from the Nio-brara formation underlying certain lands in Yuma County, Colorado. The application was amended at the time of hearing requesting that consideration be given to the status of an old existing gas well operated by the land owner.

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 evidence presented at the hearing indicates that the Niobrara for-mation constitutes a common source of supply of gas underlying the following described lands in Yuma County, Colorado, to-wit:

Township 2 South, Range 43 West, 6th rrrtt Sections 3 thru 5; 7 thru 10; 15 thru 18; 19 thru 22; 27 thru 33: All

Township 2 South, Range 44 West, 6th rrrtt Section 24: All Section 36: All Section 25: All Township 3 South, Range 43 West, 6th rrrtt Section 4: All Section 6: All Section 5: All Township 3 South, Range 44 West, 6th rrrtt Section 1: All

4. That in order to prevent the waste of gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unnecessary wells, and to insure proper and efficient development and promote conservation of the gas re-sources of the State, an order should be made establishing 640-acre drilling and spacing units for the production of gas from the Niobrara formation, common source of supply underlying the lands defined herein; that said units should be 640-acre drilling units, and consist of a section of land according to the governmental survey thereof, and that the

(over) permitted well for each such drilling unit should be located no closer than 990 feet from the boundaries of the unit; however, the Well No. 1 State, located 580 feet from the east fine and 220 feet from the south line of Section 30, Township 2 South, Range 43 West, 6th rrrtt, should be considered an exception and be the permitted well for the unit upon which it is located.

5. That all available geological and engineering data concerning said Nio-brara formation indicate that one well will efficiently and economically drain an area of approximately 640-acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one well producing from said Niobrara formation.

6. That the old existing gas well, located in the SE/4SE/4 Section 20, Town-ship 2 South, Range 43 West, 6th rrrtt, which is non-commercial and is being used by the land owner for his own use, should be considered an additional well on the unit upon which it is located and not made subject to the provisions of this order.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to wells drilled, completed, or recompleted in the Niobrara formation underlying the Beecher Island Field herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. Six Hundred Forty (640) acre drilling and spacing units shall be and the same are hereby established for the production of gas from the Niobrara formation underlying the following described lands in the Beecher Island Field, Yuma County, Colorado, to-wit:

Township 2 South, Range 43 West, 6th rrrtt Section 3 thru 5; 7 thru 10; 15 thru 18; 19 thru 22; 27 thru 33: All

Township 2 South, Range 44 West, 6th rrrtt Section 24= All Section 36: All Section 25: All Township 3 South, Range 43 West, 6th P. A/[. Section 4: All Section 6: All Section 5: All Township 3 South, Range 44 West, 6th rrrtt Section 1: All Rule 2. Said drilling units shall consist of six hundred forty (640) acres, and each such drilling unit shall consist of a section of land, according to the governmental survey thereof., and the permitted well for each such drilling unit shall be located no closer than 990 feet from the boundaries of the unit; however, the Well No. 1 State, located 580 feet from the east line and 220 feet from the south line of Section 30, Township 2 South, Range 43 West, 6th rrrtt, shall be considered an exception and be the permitted well for the unit upon which it is located.

IT IS FURTHER ORDERED, that the well located in the SE/4SE/4 Section 20, Township 2 South, Range 43 West, 6th rrrtt, shall be considered an additional well on the unit upon which it is located and shall not be made subject to the provisions of this order.

- 2 - (#300-1)

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 September, 1975.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

-- 3 --(#300-1)

BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION ) AND ESTABLISHMENT OF FIELD RULES TO ) CAUSE NO. 300 GOVERN OPERATIONS IN THE BEECHER ) ISLAND FIELD, YUMA COUNTY, COLORADO ) ORDER NO. 300-1

CORRECTION OF ORDER

TO ALL INTERESTED PERSONS AND TO WHOM IT MAY CONCERN:

On September 16, 1975, the Commission issued its Order No. 300-1, which established 640-acre drilling and spacing units in the Beecher Island Field, Yuma County, Colorado.

It has come to our attention that a correction should be made as follows:

Finding 4 should be corrected to read Well No. 2 State. This correction should also be made in Rule No. 2 of the Order.

DATED this 8th day of October, 1975.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

. By Frank J. Piro, Secretary