REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 16, 1983 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 Bow Valley Petroleum, Inc., for an order establishing 320-acre, more or less, drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde formation underlying certain lands in Mesa County, Colorado.

FINDINGS

The Commission finds as follows:

1. Bow Valley Petroleum, Inc., 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 Mesaverde formation constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Mesa County, Colorado, to-wit:

Township 10 South, Range 93 West, 6th P.M. Section 1: All Section 2: 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 320-acre, more or less, drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde formation, common source of supply underlying the lands defined herein; that said units should consist of the N/2 and S/2 of said Section 2, and the N/2 and S/2, or the E/2 and W/2 of said Section 1. Well No. 2-1 Carleton-Currier, located 1100 feet from the north line and 976 feet from the east line of said Section 2 should be considered the permitted well for the unit consisting of the N/2 of said section, and the permitted wells for the remaining units should be located no closer than 600 feet from the boundaries of the unit unless otherwise approved by the Director, which approval may be granted without the necessity of holding a hearing.

6. All geological and engineering data concerning the Mesaverde formation indicate that one well will efficiently and economically drain an area of approximately 320-acres, more or less, and that the drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently drained 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 recompleted in the Mesaverde formation underlying the Vega 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. Three hundred twenty (320) acres, more or less, drilling and spacing units shall be, and the same is hereby established for the production of gas and associated hydrocarbons from the Mesaverde formation underlying the following described lands in the Vega Field, Mesa County, Colorado, to-wit:

Township 10 South, Range 93 West, 6th P.M. Section 1: All Section 2: All

Rule 2. Said drilling units shall consist of 320-acres, more or less, and shall consist of the N/2 and S/2 of said Section 2, and the N/2 and S/2, or the E/2 and W/2 of said Section 1. Well No. 2-1 Carleton-Currier, located 1100 feet from the north line and 976 feet from the east line of said Section 2 shall be considered the permitted well for the unit consisting of the N/2 of said section, and the permitted wells for the remaining units shall be located no closer than 600 feet from the boundaries of the unit unless otherwise approved by the Director, which approval may be granted without the necessity of holding a hearing.

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 right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

ENTERED this 23rd day of May / 1983, as of May 16, 1983.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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