IN THE MATTER Of THE PROMULGATION AND ESTABLISHMENT Of FIELD RULES TO GOVERN OPERATIONS IN THE MIDNIGHT FIELD, WASHINGTON COUNTY, COLORADO Cause No. 420 Order No. 420-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 19, 1984 at 9:00 A.M., in Suite 380 Logan Tower Building, 1580 Logan Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of B. E. Hibbert for an order to establish 40-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "J" Sand underlying certain lands in Washington County, Colorado.

FINDINGS

The Commission finds as follows:

1. R. E. Hibbert, 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 jurisiiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

4. Evidence presented at the hearing was insufficient to indicate that the S/2 and NE/4 of said Section 26 is underlain by the common source of supply of oil and associated hydrocarbons from the "J" Sand and should not be included in the spaced area.

5. Evidence presented at the hearing indicates that the "J" Sand formation constitutes a common source of supply of oil and associated hydrocarbons underlying the following described lands in Washington County, Colorado, to-wit:

Township 2 South, Range 53 West, 6th P.M. Section 26: NW/4 6. In order to prevent waste of oil and gas, as defined by law; to protect the correlative rights of all parties concerned;to prevent the drilling of unnecessary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources, an order should be made establishing 40-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "J" Sand formation, a common source of supply underlying the lands defined herein; that said unit should be 40-acres, more or less, and consist of a quarter-quarter section. The permitted well for each unit should be at a location no closer than 600 feet to the quarter-quarter section line with a tolerance of 100 feet for topographical reasons and Well No. 26-1 Nickerson located in the SW/4NW/4 Section 26, Township 2 South, Range 53 West, 6th P.M. should be considered the permitted well for the unit consisting of the SW/4NW/4 of said section.

7. All available geological and engineering data concerning said "J" Sand indicate that one well will efficiently and economically drain an area of approximately 40-acres, and that a drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently and economically drained by one well producing from said "J" Sand formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the "J" Sand underlying that portion of the Midnight Field herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith.

Rule 1. Forty acre drilling and spacing units shall be and the same is hereby established for the production of oil and associated hydrocarbons from the "J" Sand underlying the following described lands in the Midnight Field, Washington County, Colorado, to-wit:

Township 2 South, Range 53 West, 6th P.M. Section 26: NW/4

Rule 2 Said drilling units shall consist of 40-acres, more or less, and consist of a quarter-quarter section according to the governmental survey. The permitted well for the each unit shall be no closer than 600 feet from the quarter-quarter section line with a tolerance of 100 feet for topographical reasons. Well No. 26-1 Nickerson located in the SW/4NW/4 Section 26, Township 2 South, Range 53 West, 6th P.M., shall be considered the permitted well for the unit consisting of the SW/4NW/4 of said section.

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 7th day of January 1985, nunc pro tunc as of November 19, 1984.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

(420-1)