IN THE MATTER Of THE PROMULGATION AND ESTABLISHMENT Of FIELD RULES TO GOVERN OPERATIONS IN THE SPEAR FIELD, WASHINGTON COUNTY, COLORADO Cause No. 342 Order No. 342-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 18, 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 Niobrara Illuminating Gas Associates, for an order establishing 160-acre drilling and spacing units for the produc-tion of gas and associated hydrocarbons from the Niobrara formation underlying certain lands in Washington County, Colorado.

FINDINGS

The Commission finds as follows:

1. Niobrara Illuminating Gas Associates, as applicant herein, is an inter-ested 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. Evidence presented at the hearing indicates that the Niobrara formation constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Washington County, ColoradO, to-wit:

Township 2 South, Range 50 West, 6th P.M. Section 25: All 5. 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 wells, and to insure proper and efficient development and promote conservation of the gas resources of the State, an order should be made establishing 160-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 160-acre drilling units, and consist or a quarter 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 900 feet from the boundaries of the quarter section upon which it is located; however, the presently producing wells or wells capable of producing, should be the permitted wells for the units upon which each is located. In addition, the Director may, without additional notice and hearing, grant exceptions to the permitted well locations provided the owners of the contiguous and cornering drilling units toward which the proposed location would be moved, file a waiver or consent, in writing, agreeing to said exception. 6. All available geological and engineering data concerning said Niobrara formation indicate that one well will efficiently and economically drain an area of approxi-mately 160-acres, and that drilling 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 said Niobrara formation.

(over)

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 Spear 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 Niobrara formation underlying the following described lands in the Spear Field, Washington County, Colorado, to-wit:

Township 2 South, Range 50 West, 6th P.M. Section 25: All

Rule 2. Said drilling units shall consist of one hundred-sixty (160) acres, and each such drilling unit shall consist of a quarter section of land, according to the governmental survey thereof, and the permitted well for each such drilling unit shall be located no closer than 900 feet from the boundaries of the quarter section upon which it is located; however, the presently producing wells, or wells capable of producing shall be the permitted wells for the units upon which each is located.

IT IS FURTHER ORDERED, that the Director may, without additional notice and hearing, grant exceptions to the permitted well locations provided the owners of the contiguous and cornering drilling units toward which the proposed location would be moved, file a waiver or consent in writing agreeing to said exceptions.

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 18th day of September, 1978.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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