REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 27, 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 Allison & Waring Exploration, Inc for an order establishing two (2) 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying certain lands in Morgan County, Colorado.

FINDINGS

The Commission finds as follows:

1. Allison & Waring Exploration, 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 "j" Sand constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Morgan County, Colorado, to-wit:

Township 2 North, Range 59 West, 6th P.M. Section 25: E/2NW/4, W/2NE/4, SE/4

5. In order to prevent the waste of oil and gas, as defined by law, to protect 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 of the State, an order should be made establishing two(2) 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying the lands defined herein, that each said unit consist of 160-acres, more or less, and Unit (a) consist of the E/2NW/4 and the W/2NE/4 and Unit (b) consist of the SE/4, Section 25, Township 2 North, Range 59 West, 6th P.M. The permitted well for Unit (b) should be Well No. 1-25 Ambrose-Cunningham, located in the NE/4SE/4 of said Section 25, and the permitted well for unit (a) should be at a location no closer than 600 feet from the boundaries of the unit.

6. All Available geological and engineering data concerning said "J" Sand indicate that one well will efficiently and economically drain an area of approximately 160-acres, and that the drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently and economically drained by one well producing from said "J" Sand.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or recompleted in the "J" Sand underlying certain lands in the Latch String 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. Two (2) One hundred-sixty (160) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the "J" Sand underlying the following described lands in Morgan County, Colorado, to-wit:

Township 2 North, Range 59 West, 6th P.M. Section 25: E/2NW/4, W/2NE/4, SE/4

Rule 2. Each unit shall consist of 160-acres, more or less, and Unit (a) shall consist of the E/2NW/4 and the W/2NE/4 and Unit (b) shall consist of the SE/4, Section 25, Township 2 North, Range 59 West, 6th P. M. The permitted well for Unit (b) shall be Well No. 1-25 Ambrose-Cunninghma, located in the NE/4SE/4 of said Section 25, and the permitted well for Unit (a) shall be at a location no closer than 600 feet from the boundaries of the unit.

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.

ENTERED this 8th day of July 1983, as of June 27, 1983.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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