W.E. Barton and N.J. Matthews, for the Shell Oil Company Harry Royster Wilbur Rocchio, Assistant Attorney General, and

D.V. Rogers, For the Commission

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on March 23, 1954, at lO:00 o'clock A.M., Room 704 State Capitol Annex, Denver, Colorado, after publication of Notice of Hearing as required by law on the petition of Shell Oil Company, for an order from the Commission establishing forty-acre drilling and spacing units according to the governmental survey thereof, for the production of oil and gas from the Muddy Sand, referred to herein as the "D" Sand, common source of supply underlying the East half (E/2) of Section Twenty-three (23), the East half (E/2) of Section Twenty-six (26), all or Section Twenty-four (24), and all of Section Twenty-five (25), all in Township Five (5) North, Range Sixty-one (61) West of the Sixth (6th) P.M., and the West half (W/2) of Section Nineteen (19) and the West half (W/2) of Section Thirty (30), all in Township Five (5) North, Range Sixty (60) West of the Sixth (6th) P.M., in Weld and Morgan Counties, Colorado, which area is referred to in said petition as the Masters Field.

Petitioner, Shell Oil Company, is the owner of oil and gas leases within the above-described area, and has heretofore completed in the "D" Sand its Shell-Porter No. l Well located in the Southwest Quarter of the Southeast Quarter of the Southwest Quarter (SW/4 SE/4 SW/4) of Section Twenty-four (24), Town-ship Five (5) North, Range Sixty-one (61) West of the Sixth (6th) P.M.; that petitioner has completed in said "D" Sand its Shell-Williams "B" No. 1 Well located in the Southwest Quarter of the Northwest Quarter of the Northeast Quarter (SW/4 NW/4 NW/4) of Section Twenty-five (25), Township Five (5) North, Range Sixty-one (61) West of the Sixth (6th) P.M., that petitioner has completed in the said "D" Sand its Shell-Porter No. 2 Well located in the Northeast Quarter of the Southeast Quarter of the Northwest Quarter (NE/4 SE/4 NW/4 NW/4) of Section Twenty-five (25), Township Five (5) North, Range Sixty-one (61) West of the Sixth (6th) P.M.; that petitioner is in the process of completing in the said "D" Sand its Shell-Williams "B" No. 2 Well located in the Southwest Quarter of the Southwest Quarter of the Northeast Quarter (SW/4 SW/4 NE/4) of Section Twenty-five (25), Township Five (5) North, Range Sixty-one (61) West of the Sixth (6th) P.M. Evidence and testimony presented at the hearing disclosed that petitioners wells and the other wells in the field encountered the "D" Sand common source of supply at the approximate depth of 6,440 feet below the surface. Evidence and testimony presented at the hearing further disclosed that one well will adequately drain the recoverable oil underlying forty acres in the said "D" Sand, and that forty acres is not smaller than the maximum area which can be efficient-ly drained by one well producing from the said "D" Sand.

FINDINGS

The Commission finds as follows:

1. That due notice of the 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 "D" Sand reservoir in the Masters Field, as used herein, constitutes a common source of supply of oil and gas underlying the following described lands in Weld and Morgan Counties, Colorado:

East half (E/2) of Section Twenty-three (23), the East half (E/2) of Section Twenty-six (26), all of Section Twenty-four (24), and all of Section Twenty-five (25), all in Township Five (5) North, Range Sixty-one (61) West of the Sixth (6th) P.M., and the West half (W/2) of Section Nineteen (19) and the West half (W/2) of Section Thirty (30), all in Township Five (5) North, Range Sixty (60) West of the Sixth (6th) P.M.

4. That in order to prevent waste of oil and gas as defined in the Colorado Oil and Gas Conservation Act of 1951, as amended, and to prevent the drilling of unnecessary wells, an order should be made establishing forty-acre drilling and spacing units for the production of oil and gas From the said "D" Sand, common source of supply underlying said land, as defined herein; that said units should be formed by a line running north and south through the center of each quarter section, and by a line running east and west through the center of each quarter section, according to the governmental survey thereof, and that the permitted wells should be located one in the center of the southwest ten (10) acres of each governmental quarter quarter section; and that a tolerance of Fifty (50) feet in any direction from the prescribed location should be permitted to avoid surface hazards and obstructions.

5. That all available geological and engineering data concerning the said "D" Sand in said Masters Field indicate that one well should efficiently and economically drain an area of approximately forty acres, and that 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 the said "D" Sand, common source of supply.

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6. That an exception should be allowed for the Royster-Porter No. 1 Well Located in the Northeast Quarter of the Northeast quarter of the Northwest Quarter (NE/4 NE/4 NW/4) of Section Twenty-five (25), Township Five (5) North, Range Sixty-one (61) West of the Sixth (6th) Pi,4., said exception providing that said well, together with the Royster-Porter No. 2 Well located in the Southwest Quarter of the Northeast Quarter of the Northwest Quarter (SW/4 NE/4 NW/4) of said section be the permitted wells for the development of said "D" Sand, common source of supply lying under the Northeast Quarter of the Northwest Quarter (NE/4 NW/4) of Section Twenty-five (25).

7. That an exception should be allotted for the Royster-Porter No. l Well located as aforesaid; the Royster-Porter No. 3 Well located in the North-east Quarter of the Northwest Quarter of the Northwest Quarter (NE/4 NW/4 NW/4) of Section Twenty-five (25) of Township Five (5)North, Range Sixty-one (61) West of the Sixth (6th) P.M., and the Shell-Porter No. 2 Well located in the Northeast Quarter of the Southeast Quarter of the Northwest Quarter (NE/4 SE/4 NW/4) of said section, and that said wells be permitted wells for the units on which they are Located.

ORDER

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IT IS THEREFORE ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the "D" Sand reservoir of the Masters Field, Weld and Morgan Counties, Colorado, as herein-above defined by the Findings, which, by reference, are made a part hereof, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. Forty-acre spacing and drilling units shall be and the same are hereby established for the production of oil and gas from the "D" Sand, common source of supply underlying the East half (E/2) of Section Twenty-three (23), the East half (E/2) of Section Twenty-six (26), all of Section Twenty-four (24), and all of Section Twenty-five (25), all in Township Five (5) North, Range Sixty-one (61) West of the Sixth (6th) P.M., and the West half (W/2) of Section Nineteen (19) and the West half (W/2) of Section Thirty (30), all in Township Five (5) North, Range Sixty (60) West of the Sixth (6th) P.M., Weld and Morgan Counties, Colorado, and such area shall henceforth be known as the Masters Field.

Rule 2. That said units shall be formed by a line running north and south through the center of each governmental quarter section, and by a line running east and west through the center of each governmental quarter section, the permitted wells for each unit shall be located one well in the center of the southwest ten (10) acres of each governmental quarter quarter section, and that a tolerance of fifty (50) feet from the prescribed location shall be permitted only where surface obstructions or hazards make it unduly hazardous or expensive to drill at the prescribed location.

IT IS FURTHER ORDERED, that by order of the Commission, after due notice and hearing, the said "D" Sand, common source of supply, in the Masters Field, Weld and Morgan Counties, Colorado, may be redesignated from time to time to embrace other lands in the vicinity which are believed on the basis of additional development to be capable of producing oil and gas from the said "D" Sand, com-mon source of supply.

IT IS FURTHER ORDERED, that an exception is hereby allowed for the Royster-Porter No. l Well located in the Northeast Quarter of the Northeast Quarter of the Northwest Quarter (NE/4 NE/4 NW/4) of Section Twenty-five (25), Township Five (5) North, Range Sixty-one (61) West of the Sixth (6th) P.M., pro-viding that said well, together with the Royster-Porter No. 2 Well located in -- 3 --

the Southwest Quarter of the Northeast Quarter of the Northwest Quarter (SW/4 NE/4 NW/4) of said section, be the permitted wells for the development of said "D" Sand, common source of supply lying under the Northeast Quarter of the Northwest Quarter (NE/4 NW/4) of Section Twenty five (25) and that no other well or wells shall be drilled to said sand on said unit.

IT IS FURTHER ORDERED, that an exception is allowed for the Royster-Porter No. 1 Well located as aforesaid, the Royster-Porter No. 3 Well located in the Northeast Quarter of the Northwest Quarter of the Northwest Quarter (NE/4 NW/4 NW/4) of Section Twenty-five (25) of Township Five (5) North, Range sixty-one (61) West of the Sixth (6th) P.M., and the Shell-Porter 2 Well located in the Northeast Quarter of the Southeast Quarter of the Northwest (NE/4 SE/4 NW/4) of said section, and that said wells be the permitted for the units on which they are located, and that no other wells shall be drilled to said sand on said unit.

IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective forthwith, and henceforth the commencement of the drill-ing of any well or wells in the "D" Sand, common source of supply, for the purpose of producing oil and gas therefrom at a location other than authorized by this order, except as herein provided, is hereby prohibited.

ORDERED this 31st day of March, 1954, by the Oil and Gas Conservation Commission of the State of Colorado. THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Annabel Hogsett, Asst. Secretary

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