REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 21, 1979 at 9:00 A.M., in Room 318-A, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Okmar Oil Company, for an order approving a Unit Agreement and Plan for Unit Operations to initiate a waterflood project in the J2 and "main J3" Sand reservoirs underlying certain lands in the Big Sandy Field, Logan County, Colorado.

FINDINGS

The Commission finds as follows:

1. Okmar Oil 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. The "J2" and "main J3" reservoirs underlying the Big Sandy Unit Area, as set forth in the plan of unit operations by the Applicant, constitutes a common source of supply or oil and gas, and that said Unit Area consists of the following des-cribed lands in Logan County, Colorado, to-wit:

Township 8 North, Range 55 West, 6th P.M. Section 1: W/2, W/2 Lot 7, W/2SE/4 2 Section 2: E/2

5. The terms and conditions provided in the Unit Agreement and Unit Operating Agreement are just and reasonable to all interests within the Unit Area and meet the requirements of the statute, and the plan for unit operations as presented by Applicant is necessary to increase the ultimate recovery of oil and gas from said reservoir, consisting of the "J2" and "main J3" Sands.

6. The proposed water flood operation for secondary recovery is necessary to increase the ultimate recovery of oil and such operation will result in an estimated additional recovery of oil and gas, with a value in excess or the estimated additional cost incident to conducting such operation.

7. Evidence presented at the hearing indicates that said plan of unit opera-tions has been approved by more than eighty percent (80%) of the interest owners.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to the lands set forth in this order, in addition to other applicable rules and regulations and orders of the Commission, in any, heretofore adopted and not in conflict herewith:

(over)

Rule 1. The "J2 and main J3 Sands underlying the Big Sandy Unit Area as set forth in the Unit Agreement and Unit Operating Agreement presented by the Applicant constitutes a common source of supply of oil and gas underlying said Unit Area composed of the following lands in Logan County, Colorado, to-wit:

Township 8 North, Range 55 West, 6th P.M. Section 1: W/2, W/2 Lot 7, W/2SE/4 Section 2: E/2

Rule 2. Said Unit Agreement and Unit Operating Agreement covering the Big Sandy Unit Area herein defined, and providing for unit operations of the "J2" and "main J3" Sands underlying said Unit Area, is hereby approved.

Rule 3. The waterflood project for the "J2" and "main J3" Sand reservoir of the Big Sandy Unit Area, as presented by the Applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject water into said reservoir through Well No. 10 Budin, located in the approximate center of Lot 5, Section 1. Township 8 North, Range 55 West, 6th P.M., in such quantities as shall be reasonably determined by the operator to best achieve the maximum recovery of oil without waste.

IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective October 1, 1979.

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 21st day of August, 1979.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary 2 --(#357-1)