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 SPACED AREA, BOULDER COUNTY, COLORADO

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CAUSE NO. 407

ORDER NO. 407-23

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on March 17, 1986 and continued to April 21, 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, based on the protest of Martin Exploration Management Corporation as to the designation by the Director of the W1/2SE1/4 Section 15, Township 1 North, Range 69 West, 6th P.M. as an 80-acre drilling and spacing unit for production from the Codell formation. At the March hearing the Assistant Attorney General was directed to give an opinion as to the Commission's duty when designation drilling units to specify the size and shape thereof.

FINDINGS

The Commission finds as follows:

1. Due notice of the time, place and purpose ofthe hearing has been given in all respects as required by law.

2. 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.

3 On November 18, 1985 the Commission authorized Order No. 407-17 to be issued which amended Order No. 407-1 and allowed the Director to designate the drilling unit where the operator fails to do so, and that the operator should have 30 days to protest the designation.

4. On December 3, 1985, by letter to Martin Exploration Management Corporation, the Director designated the W1/2SE1/4 Section 15, Township 1 North, Range 69 West as the drilling and spacing unit for production from the Codell formation.

5. A protest to the designation was filed with the Commission by Margin [sic] Exploration Management Corporation on February 14, 1986.

6. The Assistant Attorney General's opinion indicated it is the duty of the Commission to specify the size and shape of a drilling unit. The Commission is empowered to establish drilling units of the specified and approximately uniform size and shape (34-60-116(1) and (2)) and that this may be done by the hearing officer pursuant to 34-60-106 (6) and 34-60-104.5(1) (e).

7. Therefore, the designation by the Director of the W1/2SE1/4 Section, 15, Township 1 North, Range 69 West as a drilling and spacing unit for production from the Codell formation should be re-affirmed by the Commission.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the designation by the Director of the W1/2SE1/4 Section 15, Township 1 North, Range 69 West as a drilling and spacing unit for production from the Codell formation is hereby re-affirmed by the Commission.

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

ENTERED this 16th day of May 1986, as of April 21, 1986.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary