REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 15, 1979 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 Sandlin Oil Corpora-tion and Gary Sandlin, for an order establishing 160-acre drilling and spacing units for the production of gas from the "J" Sand and any other gas formation below said "J" Sand and above the Morrison formation, underlying certain lands in Adams County, Colorado. The application was amended at the time of hearing to delete all of Sections 9 and 10, Township 3 South, Range 63 West, 6th P.M., and to request that the permitted well be located in the center of the SW/4 of each quarter section.

FINDINGS

The Commission finds as follows:

1. Sandlin Oil Corporation and Gary Sandlin, as applicants herein, are interested parties 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 "J" Sand and any gas formation below said "J" Sand and above the Morrison formation constitutes a commo source of supply of gas underlying the following described lands in Adams County, Colo-rado, to-wit:

Township 2 South, Range 63 West, 6th P.M. Section 27: W/2 Section 33: All Section 34: W/2

Township 3 South, Range 63 West, 6th P.M. Section 3: All Section 4: All

5. In order to prevent the waste of oil and gas as defined by law; to pro-tect 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 "J" Sand and any other gas formation below said "J" Sand and above the Morrison formation underlying the lands herein defined that said units should be 160-acres, more or less, consisting of a quarter section of land, according to the governmental survey thereof, and the permitted well located in the cen-ter of the SW/4 of each quarter section with a tolerance of 200 feet in any direction for topography, or to avoid surface hazards.

6. Available geological and engineering data concerning said "J" Sand and any other gas formation below said "J" Sand and above the Morrison formation, indicate

(over) that one well will efficiently and economically drain an area of approximately 160-acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently and economically drained by one well producing from said "J" Sand and any other gas formation below said "J" Sand and above the Morri-son formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to wells drilled, completed, or re-completed in the "J" Sand and any other gas formation below said "J" Sand and above the Morrison formation under-lying the Katie Field, herein described, in addition to other applicable rules and regula-tions and orders of the Commission, if any, heretofore adopted and not in conflict here-with:

Rule 1. One hundred sixty (160) acre drilling and spacing units shall be and the same are hereby established for the production of gas from the "J" Sand and any other gas formation below said "J" Sand and above the Morrison formation underlying the following described lands in the Katie Field, Adams County, Colorado, to-wit:

Township 2 South, Range 63 West, 6th P.M. Section 27: W/2 Section 33: All Section 34: W/2

Township 3 South, Range 63 West, 6th P.M. Section 3: All Section 4: All

Rule 2. Said drilling units shall consist of one hundred sixty (160) acres, more or less, and each unit shall consist of a quarter section of land according to the governmental survey thereof, with the permitted well located in the center of the SW/4 of each quarter section with a tolerance of 200 feet in any direction for topography or to avoid surface hazards.

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 and rules.

ORDERED this 15th day of October, 1979.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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