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 GREENWOOD FIELD, BACA COUNTY, COLORADO	) ) ) )	CAUSE NO. 34 ORDER NO. 34-20

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 8:30 a.m. on September 5, 1996 in Suite 801, 1120 Lincoln Street, Denver, Colorado on the application of Hayes Oil and Gas Company for an order to amend Order No. 34-1 to allow the Cogburn No. 1-1 Well drilled 660 feet FNL and 1980 feet FEL in the NW¼ NE¼ of Section 1, Township 32 South, Range 42 West, 6th P.M., to be approved as an exception to the permitted location, for production of gas from the Topeka-Lansing Formation.  In addition, the Applicant requests a waiver to Rule No. 2 of Order No. 34-1 with respect to the amount of surface casing required.

FINDINGS

The Commission finds as follows:

1.      Hayes Oil and Gas Company, as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

2.      Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

3.      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.

4.      On July 14, 1954, the Commission issued Order No. 34-1, which among other things, established 640-acre drilling and spacing units for the production of gas from the Topeka-Lansing Formation underlying lands in the Greenwood Field, including Section 1, Township 32 South, Range 42 West, 6th P.M., with the permitted well to be located within 500 feet of the center of the unit.

5.      On May 24, 1995 Hayes Oil and Gas Company submitted an Application for Permit-to-Drill the Cogburn No. 1-1 Well in Section 31, Township 32 South, Range 42 West.  The section was described in error on the permit and the well was actually drilled in Section 1.  The well was in a legal location as permitted in Section 31, however, the location was not a legal location for Section 1.

6.      Samson Oil drilled the Newman No. 1-1 Well at a legal location in Section 1 for production from the Topeka-Lansing Formation and this well ceased production in 1989.

7.      Hayes Oil and Gas would not drill a well at the legal location and that additional reserves would not be recovered if a well was not drilled at an exception location.

8.      Rule No. 2 of Order No. 34-1 requires 600 feet of surface casing to be set in all wells drilled in the Greenwood Field.

9.      Hayes Oil and Gas set 516 feet of 10¾ inch surface casing and stage cemented 225 sacks of cement through a DV tool at 1525 feet.  This completion procedure adequately protects any potential fresh water aquifers in the area.

10.      Hayes Oil and Gas Company would have applied to the Commission for an order to amend Cause No. 34 to allow an exception to the permitted location and to the amount of surface casing required in advance of drilling the well had they been aware the location fell under the provisions of Order No. 34-1.

11.      This matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing that the Cogburn No. 1-1 Well drilled 660 feet FNL and 1980 feet FEL in the NW¼ NE¼ of Section 1, Township 32 South, Range 42 West, 6th P.M. should be approved as an exception to the permitted location, for production of gas from the Topeka-Lansing Formation in order to recover additional reserves, and that an exception to the amount of surface casing required should be allowed since potential fresh water aquifers have been protected.

ORDER

NOW, THEREFORE, IT IS ORDERED that the Cogburn No. 1-1 Well drilled 660 feet FNL and 1980 feet FEL in the NW¼ NE¼ of Section 1, Township 32 South, Range 42 West, 6th P.M. is hereby approved as an exception to the permitted location described in Order No. 34-1, for production of gas from the Topeka-Lansing Formation.

IT IS FURTHER ORDERED, that an exception to the amount of surface casing required in Rule 2 of Order No. 34-1 is hereby approved.

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 its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

ENTERED this day of September, 1996, as of September 5, 1996.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
	By  Patricia C. Beaver, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado  80203

September 27, 1996