REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 17, 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 establishing 640-acre drilling and spacing units for the production of gas from the Niobrara formation underlying certain lands in Yuma County, Colorado. The application was amended at the time of hearing to delete from the area to be spaced all of Sections 32, 33, 34 and 35, Township 1 North, Range 45 West, and all of Sections 1, 2, 3, and 4, Township 1 South, Range 45 West, 6th P.M.

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 Niobrara for nation constitutes a common source of supply of gas underlying the following described lands in Yuma County, Colorado, to-wit: Township 1 North, Range 45 West, 6th P.M. Sections 14 thru 16: All Sections 20 thru 23: All Sections 26 thru 29: All

4. That in order to prevent the waste of gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unnecessary well and to insure proper and efficient development and promote conservation of the gas re-sources of the State, an order should be made establishing 640-acre drilling and spacing units for the production of gas from the Niobrara formation, common source of supply underlying the lands defined herein; that said units should be 640-acre drilling units, and consist of a section of land according to the governmental survey thereof, and that the permitted well for each such drilling unit should be located no closer than 990 feet from the boundaries of the unit.

5. That all available geological and engineering data concerning said Nio-brara formation indicate that one well will efficiently and economically drain an area of approximately 640-acres, and that drilling units of the size and shape hereinabove des-cribed are not smaller than the maximum area that can be efficiently drained by one well producing from said Niobrara formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to wells drilled, completed, or recompleted in the Niobrara formation underlying the Republican Field herein described, in addition to other appli-cable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith: (over)

Rule 1. Six Hundred Forty (640) acre drilling and spacing units shall be and the same are hereby established for the production of gas from the Niobrara forma-tion underlying the following described lands in the Republican Field, Yuma County, Colorado, to-wit:

Township 1 North, Range 45 West, 6th P.M. Sections 14 thru 16: All Sections 20 thru 23: All Sections 26 thru 29: All

Rule 2. Said drilling units shall consist of six hundred forty (640) acres, and each such drilling unit shall consist of a section of land, according to the governmental survey thereof, and the permitted well for each such drilling unit shall be located no closer than 990 feet from the boundaries of the unit.

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

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

ORDERED this 17th day of January, 1977.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary -- 2 --(#318-1)