BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION AND

ESTABLISHMENT OF FIELD RULES TO GOVERN

OPERATIONS IN THE WATTENBERG GAS SPACED AREA AND THE CODELL AND NIOBRARA SPACED AREA, WELD COUNTY, COLORADO

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CAUSE NO. 407 and 232

ORDER NO. 407‑104 and 232-70

AMENDED

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 20, 1992, in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of Basin Operating Company for an order to amend Cause Nos. 407 and 232 to allow a well to be recompleted at an exception location for production from the "J" Sand Formation, and further, to allow the downhole commingling production of oil, gas and associated hydrocarbons from the "J" Sand Formation with production from the Codell, Niobrara, Sussex and Shannon Formations.

FINDINGS

The Commission finds as follows:

1. Basin Operating Company 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. In Order Nos. 407‑66 and 232-37, the Commission among other things, allowed wells drilled, completed or recompleted in the Codell and/or Niobrara Formations, where the production is commingled or dually completed with the "J" Formation, to be approved administratively, with additional rules established for well locations, unit designations and production allocation methods, for certain lands, including Section 9, Township 1 North, Range 68 West, 6th P.M.

5. The Champlin 86 "I" No. 1 Well was drilled, completed and produced at a legal location 1980 feet FSL and 560 feet FEL, in accordance with Order Nos. 407-1 and 407-10, for production from the Codell and Niobrara Formations. Recompletion of the existing wellbore for production from the "J" Sand Formation should result in an increase of recoverable reserves and the downhole commingling of production from the "J" Sand, Codell, Niobrara, Sussex and Shannon Formations will not result in irremediable reservoir damage.

6. That evidence presented at an administrative hearing indicates that over eighty (80) percent of the working interest owners and approximately over eighty (80) percent of the royalty interest owners have approved the proposed allocation method for the three hundred and twenty (320) acre drilling and spacing unit consisting of the E1/2 of said Section 9, for production from the "J" Sand Formation. In addition, over eighty (80) percent of the working interest owners and approximately over eighty (80) percent of the royalty interest owners have approved the proposed allocation method for the eighty (80) acre drilling and spacing unit consisting of the E1/2 SE1/4 of said Section 9, for production from the Codell and Niobrara Formations.

7. The matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that an exception to allow the Champlin 86 "I" No. 1 Well located 1980 feet FSL and 560 feet FEL in the NE1/4 SE1/4 of Section 9, Township 1 North, Range 68 West, 6th P.M., to be recompleted

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 day of , 1992, as of July 20, 1992.

AMENDED this day of , 1993.

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

Patricia C. Beaver, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203

April 12, 1993