IN THE MATTER Of THE PROMULGATION AND ESTABLISHMENT Of FIELD RULES TO GOVERN OPERATIONS IN THE CODELLNIOBRARA SPACED AREA, WELD COUNTY, COLORADO Cause No. 407 Order No. 407-13

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 15, 1985 at 9:00 A.M., in Room 110 State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Sunshine Valley Petroleum, for an order to extend the spaced area of the Codel/Niobrara Spaced Area as established by Order No. 407-1 and subsequent orders by the addition of certain lands in Weld County, Colorado

FINDINGS

The Commission finds as follows:

1. Sunshine Valley Petroleum, 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. On December 19, 1983, the Commission authorized Order No. 407-1 to be issued which established 80-acre drilling and spacing units for production of oil, gas and associated hydrocarbons from the Codell formation underlying certain lands in Adams, Boulder, Jefferson, Larimer and Weld Counties, Colorado. Subsequent orders included the Niobrara formation and allowed commingling of production from the Codell and Niobrara formations.

5. Based on the facts stated in the verified application and the exhibits submitted, and having received no objection, and having been reviewed and recommended by the Director, the Commission should approve the application and establish 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara formations underlying the following described lands in Weld County, Colorado, to-wit:

Township 5 North, Range 63 West, 6th P.M. Sections 6 thru 8: All Sections 17 thru 20: All Sections 30 and 31: All

6. The herein described area should be made subject to the provisions in the orders in Cause No. 407 in that the units in the extended area consist of 80-acres, more or less, and consist of the E/2 and W/2 or the N/2 and S/2 or each quarter section according to the governmental survey and the permitted well be located in the center of a 40-acre tract with a tolerance of 200 feet in any direction. An additional well at the option of the operator should be allowed to be drilled in the undrilled 40-acre tract. Commingling of production from the Codell and Niobrara formations should be allowed for wells drilled or to be drilled in the extended area.

7. Any unit upon which a well has been completed for production from the Codell and Niobrara formations prior to the effective date of the Commission's order should be excluded from the provisions of said order except for the provisions of downhole commingling and dual completion: Such a unit is described as the SW/4NE/4 Section 19, Township 5 North, Range 63 West, 6th P.M.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following described area is hereby included in the spaced area as established by the orders in Cause No. 407 for the production of oil, gas and associated hydrocarbons from the Codel/Niobrara formations:

Township 5 North, Range 63 West, 6th P.M. Sections 6 thru 8: All Sections 17 thru 20: All Sections 30 and 31: All IT IS FURTHER ORDERED, that the herein described area shall be made subject to the provisions in the orders in Cause No. 407 in that the units in the extended area consist of 80-acres, more or less, and consist of the E/2 and W/2 or the N/2 and S/2 or each quarter section according to the governmental survey and the permitted well be located in the center of a 40-acre tract with a tolerance of 200 feet in any direction. An additional well at the option of the operator should be allowed to be drilled in the undrilled 40-acre tract. Commingling of production from the Codell and Niobrara formations should be allowed for wells drilled or to be drilled in the extended area.

IT IS FURTHER ORDERED, that any unit upon which a well has been completed for production from the Codell and Niobrara formations prior to the effective date of the Commission's order shall be excluded from the provisions of said order except for the provisions of downhole Commingling and dual completion. Such a unit is described as the SW/4NE/4 Section 19, Township 5 North, Range 63 West, 6th P.M.

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

ENTERED this 30th day of July 1985, as of July 15, 1985.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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