REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November Iii, 1981 at 9:00 am. in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of J.M. Huber Corpora-tion, for an order establishing certain designated drilling units of approximately 160-acres more or less, ranging in sizes from 148.47 acres to 194.89 acres, for the production of oil and associated hydrocarbons from the Desert Creek zone or the Paradox formation underlying certain lands in Dolores County, Colorado.

FINDINGS

The Commission finds as follows:

1. J.M. Huber Corporation, 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. Evidence presented at the hearing indicates that the Desert Creek zone of the Paradox formation constitutes a common source of supply of oil and associated hydrocarbons underlying the following described lands in Dolores County, Colorado. to-wit:

Township 39 North, Range 20 West, N.M.P.M.

Resurvey Tract 39: W/2 Resurvey Tract 40: All Resurvey Tract 41: All Resurvey Tract 42. All Resurvey Tract 43: All Resurvey Tract 44. All Resurvey Tract 45: All Resurvey Tract 46: All Resurvey Tract 47: W/2 Resurvey Tract 48: W/2 Section 2: Lot 5 Section 3: Lot 5, Lot 6, Lot 7

5. In order to prevent the waste of oil and gas, as defined by law, to protect the correlative rights of all parties concerned; to prevent the drilling of unneces-sary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be made establishing certain. designated drilling and spacing units consisting of approximately 160-acres, more or less, ranging in size from 148.47 acres to 194.89 acres, for the production of oil and associated hydrocarbons from the Desert Creek zone of the Paradox formation, common <@source of supply of oil and associated hydrocarbons underlying the lands described here-in; that said units should be as designated and described in the order herein, with the permitted well located no closer than 600 feet from the boundaries of the units, and that

(over) exceptions should be granted for topographic reasons at the discretion of the Director upon adequate showing of inaccessibility. In addition. Well No. 3-43-1 Griffith located 550 feet from the east line and 980 feet from the south line of designated Unit No. 4. should be considered the permitted well for the unit upon which it is located.

6. All available geological and engineering data concerning said rotma-rion indicate that one (1) well will efficiently and economically drain an area of approxi-mately 160-acres more or less for the production of oil and associated hydrocarbons from the Desert Creek z one of the Paradox formation and that the 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 formation.

ORDER

NOW. THEREFORE. IT IS ORDERED. that the following rules and regula-tions shall apply hereafter to wells drilled completed or recompleted in the Desert Creek zone of the Paradox formation underlying lands in the Squaw Creek Field herein described in addition to other applicable rules and regulations and orders of the Commis sion if any heretofore adopted and not in conflict herewith.

Rule 1. Drilling and spacing units of approximately 160-acres more or less ranging in size from 148.47 acres to 194.89 acres are hereby established for the production of oil and associated hydrocarbons from the Desert Creek zone of the Paradox formation underlying the following described lands in the Squaw Creek Field. Dolores County, Colorado, to-wit:

Township 39 North, Range 20 West, N.M.P.M. Resurvey Tract 39: W/2 Resurvey Tract 40: All Resurvey Tract 41: All Resurvey Tract 42: All Resurvey Tract 43: All Resurvey Tract 44: All Resurvey Tract 45: All Resurvey Tract 46: All Resurvey Tract 47: W/2 Resurvey Tract 48: W/2 Section 2: Lot 5 Section 3: Lot 5, Lot 6, Lot 7 Rule 2. Said drilling and spacing units are hereby designated and described as follows:

#1 Described as Follows: Beginning at a point otherwise known as Corner 3 of Tract 40 T. 39 N., R. 20 W., Thence South 87 03' East 1320.66', Thence South 89 16' East 1179. 42', Thence South 2347.62' Thence North 89 40' West 264000'. Thence North 0 22' East 2694.78' to the point of beginning. Containing 148.47 acres more or less.

#2 Described as Follows: Beginning at a point otherwise known as Corner 3 of Tract 40 T. 39 N., R. 20 W., Thence South 0 22' West 2694.78'. Thence North 89 40' West 2640.00', Thence North 0 01' West 2564.76', Thence South 87 03' East 2763.42' to the point of beginning. Containing 163.01 acres more or less.

#3 Described as Follows: Beginning at a point otherwise known as Corner 2 of Tract 42 T. 39 N. R. 20 W. Thence North 0 14' East 2940. 30'. Thence South 87 03' East 3084. 18'. Thence South 0 01' East 2564.76'. Thence North 89 40' West 3084.18' to the point or beginning. Containing 194.89 acres more or less.

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#4 Described as Follows: Beginning at a point otherwise known as Corner 2 of Tract 42 T. 39 N., R. 20 W., Thence South 00 02' East 2661.12', Thence South 89 32' East 3084. 18', Thence North 00 01' West 2654.52', Thence North 89 40' West 3084. 18' to the point of beginning. Containing 188.18 acres more or less.

#5 Described as Follows: Beginning at a point located South 89 40' East 8084.18' from Corner 2 of Tract 42 T. 39 N., R. 20 W., otherwise known as the point of beginning, Thence South 89 40' East 2640.00', Thence South 0 22' West 2658.48', Thence North 89 38' West 2648.91'. Thence North 00 01' West 2654.52', to the point of beginning as described. Containing 161.27 acres more or less.

#6 Described as Follows: Beginning at a point located North 89 38' West 1320.00' from Corner 4 of Tract 43 T. 39 N., R. 20 W., otherwise known as the point of beginning, Thence North 0 22" East 2658.48', Thence South 89 40' East 2640.00', Thence South 2658.48', Thence North 89 22' West 1320.00', Thence North 89 38' West 1328.91' to the point of beginning. Containing 161.39 acres more or less.

#7 Described as Follows: Beginning at a point located North 89 38' West 1320.00' from Corner 4 of Tract 43 T. 39 N., R. 20 W., otherwise known as the point of beginning, Thence South 0 22' West 2638.68', Thence South 89 50' East 1322.31', Thence North 89 40' East 1322.31', Thence North 2638.68', Thence North 89 22' West 1320.00', Thence North 89038' West 1328.91' to the point of beginning. Containing 160. 33 acres more or less.

#8 Described as Follows: Beginning at a point located North 89 38' West 1320. 00' from Corner 4 of Tract 43 T. 39 N., R. 20 W., otherwise known as the point of beginning, Thence South 0 22' West 2638.68', Thence North 89 50' West 2644. 62', Thence North 0 01' West 2651.88', Thence South 89 38' East 2648.91' to the point of beginning. Containing 160.73 acres more or less.

#9 Described as Follows: Beginning at a point otherwise known as Corner 2 of Tract 44 T. 39 N., R. 20 W., Thence South 0 02' East 2651.88', Thence South 89 50' East 3084. 18', Thence North 0 01' West 2651.88', Thence North 89 32' West 3084. 18' to the point of beginning. Containing 187. 76 acres more or less.

#10 Described as Follows: Beginning at a point otherwise known as Corner 3 of Tract 44 T. 39 N., R. 20 W., Thence North 0 02' West 2638.02', Thence South 89 50' East 3084 18', Thence South 0 01' East 2638.02', Thence North 89 38' West 1244. 10', Thence North 89 47' West 1840.08' to the point of beginning. Containing 186.78 acres more or less.

#11 Described as Follows: Beginning at a point located South 89 47' East 1840.08', Thence South 89 38' East 1244.10' from Corner 3 of Tract 43 T. 39 N., R. 20 W., otherwise known as the point of beginning, Thence North 00 01' West 2638.02', Thence South 89 50' East 2644.62', Thence South 0 22' West 2655.84', Thence North 89 38' West 2639. 34' to the point of beginning. Containing 160.54 acres more or less.

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#12 Described as Follows: Beginning at a point located South 89 47' East 1840. 08'. Thence South 89 38' East 1244. 10'. Thence South 89 38' East 2639. 34' from Corner 3 of Tract 43 T. 39 N..

R. 20 W., otherwise known as the point of beginning. Thence North 0 22' East 2655.84'. Thence South 89 50' East 1322.31'. Thence North 89 40' East 1322.31'. Thence South 2655.84'. Thence South 89 38' West 2639. 34' to the point of beginning. Containing 161.08 acres more or less.

Rule 3. The permitted well for each unit shall be located no closer than 600 feet from the boundaries of the unit and exceptions may be granted by the Director for topographic reasons upon adequate showing of inaccessibility. Well No. 3-43-1 Grfffith located 550 feet from the east line and 980 feet from the south line of Unit No. 4 shall be considered the permitted well for the unit upon which it is located.

IT IS FURTHER ORDERED, that the above order and rules and regulations shall become effective forthwith.

IT IS FURTHER ORDERED, that the Commission expressly reserves its rights after notice and hearing to alter amend or repeal any and/or all or the above order, rules and regulations.

ENTERED this 15, day December, as of November 16. 1981.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary (#378-1)