IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE DOUGLAS CREEK-SOUTH FIELD (MANCOS "B" FORMATION), RIO BLANCO COUNTY, COLORADO Cause No. 311 Order No. 311-4

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 17, 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 of Lawrence Barker, Jr. , for an order establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mancos "B" formation underlying certain lands in Rio Blanco 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 embrace in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

3. That the Mancos "B" formation constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Rio Blanco County , Colorado, to-wit:

Township 4 South, Range 101 West, 6th P.M. Sections 5 thru 7- All

Township 4 South, Range 102 West, 6th P.M. Sections 1 thru 3: All Sections 10 thru 15- All

4. That in order to prevent 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, an order should be made establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mancos "B" formation, a common source of suppl y underlying the lands defined herein; that said unit should be 160-acres and consist of a quarter section, according to the governmental survey thereof, and the permitted well for each unit should be located no closer than 600 feet from the boundaries of the quarter section upon which it is located; however, Well No. 14 South Douglas Creek Fee, located in the SE1/4 SW1/4 of said Section 13, Well No. 7-3 Red Rock Canyon Govt., located in the SE1/4 SW1/4 o f said Section 7, Well No. 13 South Douglas Creek Govt., located in the NE1/4 NE1/4 of said Section 2 and Well No. 16 South Douglas Creek Govt., located in the SE1/4 SE1/4 of said Section 2 should be considered the permitted wells for the units upon which each is located.

5. That all geological and engineering data concerning the Mancos "B" formation indicates that one well will efficiently and economically drain an area of approximately 160 acres, and that the drilling unit of the size hereinabove described is not smaller that the maximum area that can be efficiently drained by one well producing from said Mancos "B" formation.

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the Mancos "B" formation underlying that portion of the Douglas Creek-South 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 Mancos "B" formation underlying the following described lands in the Douglas Creek-South Field, Rio Blanco County, Colorado, to-wit:

Township 4 South, Range 101 West, 6th P. M. Sections 5 thru 7- All

Township 4 South, Range 102 West, 6th P. M. Sections 1 thru 3: All Sections 10 thru 15- All

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, with the permitted well located no closer than 600-feet to the boundaries of the quarter section upon which it is located; however, Well No. 14, South Douglas Creek Fee, located in the SE1/4 SW1/4 of said Section 13, Well No. 7-3, Red Rock Canyon Govt., located in the SE1/4 S1/4 of said Section 7, Well No. 13 South Douglas Creek Govt., located in the NE1/4 NE1/4 of said Section 2, and Well No. 16 South Douglas Creek Govt., located in the SE1/4 SE1/4 of said Section 2 shall be the permitted wells for the units upon which each is located.

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

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

ORDERED this 17th day of February, 1978. OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary