IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

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 CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO

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CAUSE NO. 407

ORDER NO. 407-21

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on March 17, 1986 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 Corporation for an order granting an exception to the permitted well location as provided for in Order No. 407-1 for a well, the No. 12-3 Fairmeadows, to be drilled at a location 1713 feet from the south line and 831 feet from the west line Section 3, Township 5 North, Range 65 West, 6th P.M.

FINDINGS

The Commission finds as follows:

1. Sunshine Valley Petroleum Corporation, 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. The permitted well location is in the center of the 40-acre governmental tract with a tolerance of 200 feet in any direction. Exceptions may be granted providing the owners of the contiguous and cornering units file a waiver or consent in writing.

5. Based on the facts stated in the verified application and exhibits submitted in that it was necessary to locate outside the 200 foot tolerance due to surface hazards, the matter was reviewed and recommended for approval by the Director as Hearing Officer on March 13, 1986. The Commission should therefore grant an exception to the permitted well location as provided for by Order No. 407-1 for a well, the No. 12-3 Fairmeadows, to be drilled at a location 1713 feet from the south line and 832 feet from the west line Section 3, Township 5 North, Range 65 West, 6th P.M.

6. Waivers from offset owners were received by the time of hearing.

ORDER

NOW, THEREFORE, IT IS ORDERED, that an exception to the permitted well location as provided for by Order NO. [sic] 407-1 is hereby granted for a well, the No. 12-3 Neadows, [sic] to be drilled at a location 1713 feet from the south line and 831 feet from the west line Section 3, Township 5 North, Range 65 West, 6th P.M., Weld County, Colorado.

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

ENTERED this 4th day of April, 1986, as of March 17, 1986.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary