IN THE MATTER Of THE PROMULGATION AND ESTABLISHMENT Of FIELD RULES TO GOVERN OPERATIONS IN THE SHEEP CREEK FIELD, MESA COUNTY, COLORADO Cause No. 386 Order No. 386-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 21, 1982 at 9:00 A.M., in Room 110, State Centennial Building, Denver, Colo-rado, after giving Notice of Hearing as required by law, on the application of Coors Energy Company, for an order establishing 640-acre drilling units for the production of gas and associated hydrocarbons from the Mesaverde formation (including the Cozzette and Corcoran members) underlying certain lands in Mesa County, Colorado.

FINDINGS

The Commission finds as follows:

1. Coors Energy Company, as applicant herein, is an interested arty 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 juris-dication to promulgate the hereinafter prescribed order.

4. That the Mesaverde formation (including the Cozzette and Corcoran members) constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Mesa County, Colo-rado, to-wit:

Township 9 South, Range 92 West, 6th P.M. Section 8: All Section 16: All Section 9: All Section 17: All

5. In order to prevent waste of oil and gas, as defined bylaw; to protect the correlative rights of all parties concerned; to prevent the drilling of unnecessary wells, and to insure proper and efficient develop-ent and promote conservation of the oil and gas resources, an order should be made establishing 640-acre drilling and spacing units for the production )f gas and associated hydrocarbons from the Mesaverde formation (including he Cozzette and Corcoran members), a common source of supply underlying he lands defined herein; that said units should be 640-acres and consist of a section of land according to the governmental survey, and the permitted well be located no closer than 600 feet from the boundaries of the section upon which it is located, and that Well No. USA 1-16 SC, located 519 feet from the north line and 1288 feet from the west line of said Section 16, be considered an exception and be the permitted well for the unit upon which it is located.

6. All geological and engineering data concerning the Mesa-verde formation (including the Cozzette and Corcoran members), indicate that one well will efficiently and economically drain an area of approximately 640-acres, and that the drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently drain-ed by one well producing from said Mesaverde formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recomplet-ed in the Mesaverde formation (including the Cozzette and Corcoran members), underlying the Sheep Creek Field, herein described, in addition to other

(over) applicable rules and regulations and orders of the Commission, if any, here-tofore adopted and not in conflict herewith:

Rule 1. Six Hundred Forty (640) acre drilling and spacing units shall be and the same is hereby established for the production of gas and associated hydrocarbons from the Mesaverde formation (including the Cozzette and Corcoran members), underlying the following described lands in the Sheep Creek Field, Mesa County, Colorado, to-wit:

Township 9 South, Range 92 West, 6th P.M. Section 8: All Section 16: All Section 9: All Section 17: All Rule 2. Said units shall consist of 640-acres, more or less, and consist of a section of land according to the governmental survey, and the permitted well for the above-described units shall be located no closer than 600 feet from the boundaries of the section upon which it is located, and that Well No. USA 1-16 SC, located 519 feet from the north line and 1288 feet from the west line of said Section 16, be considered an exception and be the permitted well for the unit upon which it is located.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

IT IS FURTHER ORDERED, that the Commission expressly reserve its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

ENTERED this 20th day of July 1982, as of June 21, 1982.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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