REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 21, 1977 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 Kansas-Nebraska Natural Gas Co., for an order to extend the limits of the gas spaced area of the Vernon Field, Yuma 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 on january 17, 1977, the Commission issued its Order No. 315-1 for the Vernon Field which established 640-acre drilling and spacing units for the pro-duction of gas from the Niobrara formation underlying certain lands in Yuma County. Said units consist of a governmental section with the permitted well located no closer than 990-feet from the boundaries of the unit.

4. That there is sufficient data to justify a determination that the common source of supply of gas from the Niobrara formation extends beyond the present limits of the spaced area as established by Order No. 315-1. Therefore, the application should be granted and the following described lands should be included in the spaced area of the Vernon Field and made subject to said Order No. 315-1.

Township 1 South, Range 44 West, 6th P.M. Sections 3 thru 10; 16 thru 18; 27 and 34 Township 2 South, Range 44 West, 6th P.M. Sections 3, 4 Township 1 North, Range 44 West, 6th P.M. Sections 32, 33

5. That the geological data to be obtained from additional drilling would be beneficial to the Commission to more accurately define the limits of the spaced area and the proper size of the drilling units, and in order to preserve the option of the Com-mission to reduce the size of the units, the Commission, in granting the application, should require that future wells in the entire spaced area be located no closer than 990-feet from the boundaries of the quarter section upon which it is located.

6. That the Commission should review the matter in nine (9) months to evaluate both the diligence of the operators in developing the field and such additional geological data as may be available.

(ov e r )

ORDER

NOW, THEREFORE, IT IS ORDERED, that the area set Forth in Finding 4 herein shall be subject to the provisions of Order No. 315-1 and the Vernon Field shall henceforth include the following described lands in Yuma County, Colorado, to-wit:

Township 1 South, Range 44 West, 6th P.M. Sections 3 thru 10; 16 thru 18; 19 thru 21; 2 7 thru 34

Township 2 South, Range 44 West, 6th P.M. Sections 3 thru 6

Township 1 North, Range 44 West, 6th P.M. Sections 32, 33

IT IS FURTHER ORDERED, that henceforth the permitted well shall be at a location no closer than 990-feet from the boundaries of the quarter section upon which it is located.

IT IS FURTHER ORDERED, that a hearing shall be held in nine (9) months, at which time the Commission shall review the matter to evaluate both the diligence of the operators in developing the field and such additional geological data as may be available.

IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal the above orders.

ORDERED this 15th day of December, 1977.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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