REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 19, 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 or Alexander and Ambrose Oil Corporation for an order to amend Order No. 300-1 to reduce the size of the drilling and spacing units from 640-acres to 160-acres, and in addition to establish 160-acre drilling and spacing units for the production of gas from the Niobrara formation under-lying additional lands in the Beechef Island Field. The application further requested that the Commission establish, in its order, a basis for the ratable purchase and taking of gas from such common source of supply as required by the Oil and Gas Conservation Act, CRS 1973, as amended. This part of the application pertaining to the ratable take was withdrawn by the applicant at the time of hearing.

FINDINGS

The Commission finds as follows:

1. Alexander and Ambrose 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. The common source of supply for the production of gas underlying lands in the Beecher Island Field is the Niobrara formation. Said formation is also the - producing horizon for the production of gas in nine (9) other fields in the relative proxi-miry of the Beecher Island Field, namely Vernon Field, Cause No. 315= Shout Field, Cause No. 316= Whisper Field, Cause No. 317; Republican Field, Cause No. 318; Mil-dred Field, Cause No. 327 Wavefly Field, Cause No. 328; Schramm Field, Cause No. 329: Armel Field, Cause No. 330; and Buckboard Field, Cause No. 331.

The Commission takes administrative notice of information in its official files that the evidence to date does not indicate a significant difference in the characteris-tics of the Niobrara formation underlying any of the above-referenced fields, including the Beecher Island Field. Further information may demonstrate that there are variables which support different size drilling and spacing units for the several fields. However, based upon the current appearance of similarities between the Niobrara formation under-lying all of these fields, and although each field will be considered on its own, a decision on one field may be precedent setting on any or all other fields.

5. A hearing has been set for August 21, 1978, before the Commission, for the purpose of receiving and reviewing evidence pertaining to the proper spacing of the other nine (9) fields, referenced above. The decision for proper spacing for those fields, as well as the decision for the within matter, must be made so as to prevent waste and protect correlative rights. It is in the best interest of the people of the State and -the operators in the Beechef Island Field and all said other fields producing gas from the Niobrara formation, that the Commission, have all information and evidence on each of said fields, including the evidence to be adduced at the August 21, 1978 hearing, before any decision concerning the proper spacing for any of the said fields is made.

(over)

ORDER

NOW, THEREFORE, IT IS ORDERED, that the decision regarding the spacing of the Beechef Island Field on the application of Alexander and Ambrose OH Corporation is hereby deferred until receipt and review of all evidence to be adduced at the August 21, 1978 hearing on Vernon Field, Cause No. 315: Shout Field, Cause No. 316; Whisper Field, Cause No. 317; Republican Field, Cause No. 318; Mildred Field, Cause No. 327; Waverly Field, Cause No. 328; Schramm Field, Cause No. 329; Armel Field, Cause No. 330; and Buckboard Field, Cause No. 331.

ORDERED this 19th day of July, 1978.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(#300-4)