IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

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 LOST CREEK FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 307

ORDER NO. 307-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 17, 1976, at 9 a.m., in Room 532, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the Commission's own motion, to establish 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" 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 evidence presented at the hearing indicates that the "J" Sand constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Weld County, Colorado, to-wit:

Township 2 North, Range 62 West, 6th P.M.

Sections 2 through 9

Township 3 North, Range 62 West, 6th P.M.

Sections 32 through 35

4. That in order to prevent the waste of oil and 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 oil and gas resources of the State, an order should be made establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand, common source of supply underlying the lands defined herein; that said units should be 160-acres, more or less, and consisting of a quarter section, according to the governmental survey thereof; and that the permitted well for each such drilling unit should be located not less than 600 feet from the boundary of each quarter section upon which it is located, and no closer than 2850 feet from another gas well producing from the same source of supply; however, Well No. 1 State, located in the SE¼NW¼SW¼ Section 34 and Well No. 44-33 Premier, located in the SE¼SE¼ Section 33, Township 3 North, Range 62 West, 6th P.M., should be considered exceptions and be the permitted wells for the units upon which they are located.

5. That all available geological and engineering data concerning said "J" Sand indicate that one well will efficiently and economically drain an area of approximately 160-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 "J" Sand.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or recompleted in the "J" Sand underlying the Lost Creek 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: One Hundred Sixty (160) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the "J" Sand underlying the following described lands in the Lost Creek Field, Weld County, Colorado, to-wit:

Township 2 North, Range 62 West, 6th P.M.

Sections 2 through 9

Township 3 North, Range 62 West, 6th P.M.

Sections 32 through 35

Rule 2: Said drilling units shall consist of one hundred sixty (160) acres, and each such drilling unit shall be a quarter section, according to the governmental survey thereof; and the permitted well for each such drilling unit shall be located not less than 600 feet from the boundary of each quarter section upon which it is located, and no closer than 1850 feet from another gas well producing from the same source of supply.

IT IS FURTHER ORDERED, that Well No. 1 State, located in the SE¼NW¼SW¼ Section 34 and Well No. 44-33 Premier, located in the SE¼SE¼ Section 33, Township 3 North Range 62 West, 6th P.M. shall be considered exceptions and be the permitted wells for the units upon which they are located.

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

IT IS FURTHER ORDERED, that the Commission expressly reserves its after notice and hearing, to alter, amend or repeal any and/or all of the above orders, and regulations.

ORDERED this 17th day of February, 1976.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary