REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 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, on the verified application of Williford Energy Company for an order granting an exception to the permitted well location as provided for by Order No. 426-1 for a well to be drilled in the NE/4NE/4 Section 32, Township 13 South, Range 48 West, 6th P.M. and that it be the permitted well for the unit consisting of the E/2NE/4 of said section.

FINDINGS

The Commission finds as follows:

1. Williford Energy Company 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 February 18, 1985, the Commission authorized Order No. 426-1 to be issued which established 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Morrow formation underlying certain lands in the Mr. Pearl Field. The units consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section according to the governmental survey. The permitted well is at a location in the center of the NW/4 and SE/4 of each quarter section with a tolerance of 200 feet in any direction. The E/2SE/4 Section 34, Township 13 South, Range 48 West, 6th P.M. has been designated an 80-acre unit.

5. Testimony presented at the hearing indicates that a well drilled in the permitted location in the NE/4 of Said Section 32 would be non commercial and in order for the applicant to obtain his share of production from the pool, avoid drainage and protect correlative rights, an exception to the permitted well location as provided for in Order No. 426-1 shoul be allowed for a well to be drilled in the NE/4NE/4 Section 32, Township 13 South, Range 48 West, 6th P.M., and that it be considered the permitted well for the Unit consisting of the E/2NE/4 of said section 32.

6. Should a commercial well be completed at the exception location, production from said well should be restricted in accordance with the provisions of Order No. 426-6.

7. Reconsideration at the next scheduled hearing date should be given to Champlin Oil Company's request for three exception locations which was heard before the Commission on May 19, 1986, and continued to the November 1986 hearing date.

ORDER

NOW, THEREFORE, IT IS ORDERED, that an exception to the permitted well location as provided for in Order No. 426-l is hereby granted for a well to be drilled at a location in the NE/4NE/4 Section 32, Township 13 South, Range 48 West, 6th P.M., Mr. Pearl Field, Cheyenne County, Colorado, and that it be the permitted well for the unit consisting of the E/2NE/4 of said Section 32.

IT IS FURTHER ORDERED, that should said exception well be completed as a commercial well, production from said well shall be restricted to 50% of the average production of offset wells or a minimum production of 100 barrels of oil per day.

IT IS FURTHER ORDERED, that a re-hearing shall be held on August 18, 1986 on the application of Champlin Petroleum Company filed with the Commission on April 8, 1986, and heard before the Commission on May 19, 1986, requesting approval of three exception locations in the spaced area of the Mr. Pearl Field, Cheyenne County, Colorado.

ENTERED this day of 1986, as of July 21, 1986.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary