REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 21, 1985 at 9:00 A.M., in Room 110, State Centennial Building, 1313 Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of W. R. Muffin, d/b/a Muffin Drilling Co. for an order establishing 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Middle Morrow Sandstone (McClave Sandstone) underlying certain lands in Prowers County, Colorado.

FINDINGS

The Commission finds as follows:

1. W. R. Muffin, d/b/a Murfin Drilling Co., 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. Based upon the facts stated in the verified application and exhibits submitted, and receiving no objections, the Commission should enter an order establishing 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Middle Morrow Sandstone (McClave Sandstone) underlying the following described lands in Prowes County, Colorado:

Township 21 South, Range 46 West, 6th P.M. Section 32: All Section 33: All

Township 22 South, Range 46 West, 6th P.M. Sections 2 thru 5:All Sections 9 thru 11:All

5. In order to prevent the waste of oil and gas as defined by law, to protect 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 of the State, an order should be made establishing 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Middle Morrow Sandstone (McClave Sandstone) herein. Each unit should consist of 640-acres, more or less, and consist of a section of land, according to the governmental survey with the permitted well located no closer than 990 feet from the section lines, except for Section 10, Township 22 South, Range 46 West where the location should be no closer than 660 feet from the section lines. Wells presently producing or producible, or permitted within the proposed area should be designated the permitted well for the unit upon which they are located.

6. All available geological and engineering data concerning said Middle Morrow Sandstone (McClave Sandstone) indicate that one well will efficiently-and economically drain an area of approximately 640-acres, and that the 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 Middle Morrow Sandstone (McClave Sandstone).

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or recompleted in the Middle Morrow Sandstone (McClave Sandstone) underlying certain lands in the Channing 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. Six hundred forty (640) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the Middle Morrow Sandstone (McClave Sandstone) underlying the following described lands in Prowers County, Colorado, to-wit:

Township 21 South, Range 46 West, 6th P.M. Section 32: All Section 33: All

Township 22 South, Range 46 West, 6th P.M. Sections 2 thru 5: All Sections 9 thru 11: All

Rule 2. Each unit shall consist of 640-acres, more or less, and consist of a section of land, according to the governmental survey with the permitted well located no closer than 990 feet from the section lines, except for Section 10, Township 22 South, Range 46 West where the location should be no closer than 660 feet from the section lines. Wells presently producing or producible, or permitted within the proposed area should be designated the permitted well for the unit upon which they are located.

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 1st day of February 1985, as of January 21, 1985.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary 2 --(424-1)