REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 16, 1982 at 9:00 Kkktt in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of J.W. Gibson, for an order establishing 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Middle Morrow Sand underlying certain lands in Kiowa County, Colorado

FINDINGS The Commission finds as follows:

1. J. W. Gibson, 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 Middle Morrow Sand constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Kiowa County, Colorado, to-wit: Township 19 South, Range 47 West, 6th rrrtt Section 21: All Section 27: All Section 22: All Section 28: All

5. In order to prevent waste of oil and gas, as defined by law; to protect 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 oil and gas resources, an order should be made establishing 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Middle Morrow Sand, a common source of supply underlying the lands defined herein; that said units should be 640-acres and consist of a section of lands according to the governmental survey, and the permitted well for the unit consisting of Section 21 should be Well No. 1. State, drilled at a location in the NE/4 SE/4 of said section; the permitted well for the unit consisting of Section 22 should be at a location in the SE/4 SW/4 of said section; and the permitted well for the unit consisting of Section 27 should be at a location in the SE/4 NW/4 of said section; and the permitted well for the unit consisting of Section 28 should be at a location in the SE/4 NE/4 of said section.

6. All geological and engineering data concerning the Middle Morrow Sand 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 that the maximum area that can be efficiently drained by one well producing from said Middle Morrow Sand.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the Middle Morrow Sand underlying the Neenoshe Field, herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore 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 Middle Morrow Sand underlying the following described lands in the Neenoshe Field Kiowa County, Colorado, to-wit: Township 19 South, Range 47 West, 6th rrrtt Section 21: All Section 27: All Section 22: All Section 28: All

Rule 2. Said drilling units shall consist of 640-acres and consist of a section of land according to the governmental survey, and the permitted well for the unit consisting of Section 21 shall be Well No. 1 State, drilled at a location in the NE/4 SE/4 of said section; the permitted well for the unit consisting of Section 22 shall be at a location in the SE/4 SW/4 of said section; the permitted well for the unit consisting of Section 27 shall be at a location in the SE/4 NW/4 of said section; and the permitted well for the unit consisting of Section 28 shall be at a location in the SE/4 NE/4 of said section.

IT IS FURTHER ORDERED, that the provisions contained in 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 of the above orders this 13th 1982 as of August 16, 1982. OIL AND GAS CONSERVATION COMMISSION Of THE STATE Of COLORADO

Frank~ Piro~ Secretary' Corrected as of December 9. 1988

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