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

)

CAUSE NO. 407

ORDER NO. 407-47

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 17, 1989, 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 Conquest Oil Company for an order to amend Order Nos. 407-1 and 407-8 and to establish two 80-acre drilling and spacing units for production from the Codell and Niobrara formations underlying an undrilled quarter section, and to further establish two 40-acre drilling and spacing units under one of the 80-acre units and to allow downhole commingling of production from said formation.

FINDINGS

The Commission finds as follows:

1. Conquest Oil Company, as applicant herein, is an interested party in the subject matter of the above-entitled 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 the production of oil, gas and associated hydrocarbons from the Codell formation. The units consist of the E1/2 and W1/2 or the N1/2 and S1/2 of each governmental quarter-quarter section with a tolerance of 200 feet and the option to drill an additional well in the undrilled 40-acre tract. Subsequent Order No. 407-8 included the Niobrara formation and allowed downhole commingling of production from the Codell and Niobrara formations. The SW1/4 of Section 21, Township 4 North, Range 66 West, 6th P.M. [sic] Weld County, Colorado lies within the area spaced by these orders.

5. No wells have been drilled in the SW1/4 of said Section 21.

6. Based on the facts stated in the verified application and having been heard by the Hearing Officer who recommended approval of the application, and having received no protests, the Commission should approve the request and amend Order Nos. 407-1 and 407-8 and establish two 80-acre drilling and spacing units consisting of the N1/2 and S1/2 of said Section 21, and further to segregate the S1/2 unit into two 40-acre units consisting of the SW1/4 SW1/4 and SE1/4 SW1/4 of said Section 21 for the commingled production of oil, gas and associated hydrocarbons from the Niobrara and Codell formations.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-1 and 407-8 are hereby amended and two 80-acre drilling and spacing units are hereby established consisting of the N1/2 and S1/2 of the SW1/4, Section 21, Township 4 North, Range 66 West, 6th P.M., Weld County, Colorado.

IT IS FURTHER ORDERED, that the unit consisting of the S1/2 of Section 21, Township 4 North, Range 66 West, 6th P.M., Weld County, Colorado be segregated into two 40-acre drilling and spacing units consisting of the SW1/4 SW1/4 and the SE1/4 SW1/4 of said Section 14 for the commingled production of oil, gas and associated hydrocarbons from the Codell and Niobrara formations underlying these lands.

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.

IT IS FURTHER ORDERED, that with the verbal consent of the interested parties at the time of hearing, this order shall become effective forthwith.

ENTERED this 18th day of July, 1989, as of July 17, 1989.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Dennis R. Bicknell, Secretary