REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 19, 1983 at 9:00 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of J-W Operating Co. for an order extending the limits of the spaced area of the Rock Creek Field as established by Order No. 351-1, by the addition of certain lands, and further to amend said Order No. 351-1 and permit two (2) wells to be drilled and produced for gas and associated hydrocarbons from the Niobrara formation underlying each 160-acre drilling and spacing unit in the spaced area of the Rock Creek Field, as well as the additional wells. The application was amended at the hearing as to the location of the additional well.

FINDINGS

The Commission finds as follows:

1. J-W Operating Co., 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 August 21, 1979, the Commission issued Order No. 351-1 which established 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Niobrara formation underlying the following described lands in Yuma County, Colorado, to-wit:

Township 5 North, Range 46 West, 6th P.M. Section 19: All Section 20: All Section 29: All Section 30- All Section 31: All Township 5 North, Range 47 West, 6th P.M. Section 25: All Section 36: All The units consist of a quarter section according to the governmental survey with the permitted well located no closer than 900 feet from the boundary of the units.

5. Evidence presented at the hearing indicates that a common source of supply of gas and associated hydrocarbons underlies, in addition to the area set forth in Order No. 351-1 and described in Finding 4 herein, the following described lands in Yuma County, Colorado, to-wit:

Township 5 North, Range 46 West, 6th P.M. Section 17: All Section 18: All Section 32: All Section 33: All

Township 5 North, Range 47 West, 6th P.M. Section 23: All Section 24: All Section 26: All and that such lands be made subject to the provisions of Order No. 351-1.

6. Evidence presented at the hearing indicated that one well is insufficient to adequately drain the gas and associated hydrocarbons from that part of the reservoir underlying the drilling and spacing units as established by Order No. 353-1, and the additional lands and the drilling of an additional well on each 160-acre unit is necessary to effectively and economically drain that part of the reservoir underlying the unit. The additional well should be located in the diagonal offset quarter quarter section from the existing well, no closer than 600 feet from the boundaries of said quarter quarter section.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the area as set forth in Finding 5 herein shall be subject to the provisions of Order No. 351-1 and that said Order No. 351-1, pertaining to only one permitted well location on each 160-acre drilling and spacing unit for the production of gas and associated hydrocarbons from the Niobrara formation, is hereby amended and the following shall apply hereinafter to wells drilled completed or recompleted in said Niobrara formation underlying the lands described herein, in addition to other applicable rules and regulations and orders of the Commission heretofore adopted and not in conflict herewith.

Rule 1. A second well, in addition to the permitted well as provided for-in Order No. 351-1 is hereby authorized to be drilled on each 160-acre drilling and spacing unit for the production of gas and associated hydrocarbons from the Niobrara formation underlying the following described lands in the Rock Creek Field, Yuma County, Colorado, to-wit:

Township 5 North, Range 46 West, 6th P.M. Sections 17 thru 20: All Sections 29 thru 33: All

Township 5 North, Range 47 West, 6th P.M. Sections 23 thru 26: All Section 36: All

Rule 2. Said additional well shall be located in the diagonal offset quarter quarter section from the existing well and no closer than 600 feet to the boundaries of said quarter quarter section.

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 16th day of January 1984, as of December 19, 1983.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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