BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE WELLINGTON FIELD, LARIMER COUNTY, COLORADO	) ) ) )	CAUSE NO. 303 ORDER NO. 303-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 18, 1975 at 9 a.m., in Room 532, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Russell A. Pomeroy, for an order approving a certain Unit Agreement and Unit Operating Agreement providing for involuntary unit operations of the Muddy formation reservoir underlying the Wellington Unit Area.  [sic] Hearing in the matter was continued to the December 16, 1975 hearing date.

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 Muddy formation reservoir encountered in the Well No. 9 Buckeye, located in the NE¼SE¼SW¼ Section 31, Township 10 North, Range 68 West, 6th P.M., Larimer County, Colorado, between the approximate depths of 4258 and 4348 feet subsurface, has been defined and determined by drilling as underlying the following described lands in Latimer County, Colorado, to-wit:

Township 9 North, Range 68 West, 6th P.M.
Section	5:	W½W½	Section	17:	W½W½
Section	6:	All	Section	18:	E½, E½W½
Section	7:	All			W½NW¼
Section	8:	W½W½	Section	19:	E½, E½NW¼
			Section	20:	W½NW¼
Township 10 North, Range 68 West, 6th P.M.
Section	29:	W½SW¼	Section	31:	All
Section	30:	All	Section	32:	W½W½
Township 9 North, Range 69 West, 6th P.M.
Section	1:	E½E½
Township 10 North, Range 69 West, 6th P.M.
Section	25:	E½SE¼, SE¼NE¼
Section	36:	E½E½

and that said reservoir constitutes a common source of supply; and that such lands should hereafter be referred to as the Wellington Muddy Formation Unit Area.

4.      That Applicant, Russell A. Pomeroy, made diligent but unsuccessful attempts to create a voluntary unit operation.

5.      That the Unit Agreement and Unit Operating Agreement as presented by Applicant, are necessary to increase the ultimate recovery of oil and gas from said reservoir, and that the terms provided therein are just and reasonable to all interests contained within said Muddy Formation Unit Area.

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

ORDER

NOW, THEREFORE, IT IS ORDERED:

1.      The Unit Agreement and Unit Operating Agreement covering lands in the Wellington Muddy Formation Unit Area, which agreements are attached to and made a part of the original order of this Commission on file in the office of the Commission, are approved as being in the public interest for conservation.

2.      The Muddy formation reservoir, common source of supply, underlies the following described lands in Larimer County, Colorado, to-wit:

Township 9 North, Range 68 West, 6th P.M.
Section	5:	W½W½	Section	17:	W½W½
Section	6:	All	Section	18:	E½, E½W½
Section	7:	All			W½NW¼
Section	8:	W½W½	Section	19:	E½, E½NW¼
			Section	20:	W½NW¼
Township 10 North, Range 68 West, 6th P.M.
Section	29:	W½SW¼	Section	31:	All
Section	30:	All	Section	32:	W½W½
Township 9 North, Range 69 West, 6th P.M.
Section	1:	E½E½
Township 10 North, Range 69 West, 6th P.M.
Section	25:	E½SE¼, SE¼NE¼
Section	36:	E½E½

and such area shall hereafter be known as the Wellington Muddy Formation Unit Area.

3.      The provisions contained in said Unit Agreement and Unit Operating Agreement as they pertain to:

a.	The description of the pool to be so operated;
b.	The nature of said operation;
c.	The allocation to the separately owned tracts in the Muddy Formation Unit Area of all the oil and gas that is produced from said Muddy Formation Unit Area and is saved;
d.	The provision for the credits and charges to be made in the adjustment among the owners in the Wellington Muddy Formation Unit Area for their respective investments in wells, tanks, pumps, machinery, materials, and equipment contributed to the Unit operations;
e.	The provision providing how the costs of Unit operations, including capital investments, shall be determined and charged to the separately owned tracts, and how said costs shall be paid, including, the provision providing when, how, and by whom the Unit production allocated to an owner who does not pay the shape of the cost of Unit operations charged to such owner, or the interest of such owners, may be sold and the proceeds applied to the payment of such costs;
f.	The provision for carrying or otherwise financing any person who elects to be carried or otherwise financed, allowing a reasonable interest charge for such service payable out of such persons share of the production;
g.	The provision for the supervision and conduct of the Unit operations, in respect to which each person shall have a vote with a value corresponding to the percentage of the costs of Unit operations chargeable against the interest of such person; and
h.	The time when the Unit operations shall commence, and the manner in which, and the circumstances under which the Unit operations shall terminate, are just and reasonable, and are incorporated herein as the Commission's plan of involuntary unit operations for such lands.

IT IS FURTHER ORDERED, that the rules and regulations and orders contained herein shall become effective forthwith.

ORDERED this 16th day of December, 1975.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
	By	Frank J. Piro, Secretary