REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 19, 1985 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 Skaer Enterprises, Inc. for an order establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying certain lands in Morgan County, Colorado. The applicant requested the E/2 Section 13 and the E/2 Section 24, Township,3 North, Range 57 West be deleted from the proposed spaced area.

FINDINGS

The Commission finds as follows:

1. Skaer Enterprises, Inc., 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, and having been reviewed and recommended by the Director as Hearing Officer on August 16, 1985, the Commission should enter an order establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying the following described lands in Morgan County, Colorado:

Township 3 North, Range 57 West, 6th P.M. Section 13: W/2 Section 14: All Section 23: All Section 24: W/2

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 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand underlying the lands described herein Each unit should consist of 160-acres, more or less, and consist of quarter section of land, according to the governmental survey with the permitted well located no closer than 990 feet from the boundaries of the unit with exceptions granted by the Director for topographic reasons upon adequate showing of inaccessibilitY. Well No. 1 Lundock, located in the SE/4SE/4 Section 14, Township 3 North, Range 57 West, 6th P.M., should be considered the permitted well for the unit upon which it is located.

6. All available geological and engineering data concerning said "J" Sand indicate that one well will efficiently and economically drain an area of approximately 160-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 formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed, or recompleted in -the "J" Sand underlying certain lands in the Tootsie 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. One hundred sixty (160) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocarbons from the "J" Sand underlying the following described lands in Morgan County, Colorado, to-wit:

Township 3 North, Range 57 West, 6th P.M. Section 13: W/2 Section 14: All Section 23: All Section 24: W/2

Rule 2. Each unit shall consist of 160-acres, more or less, and consist of a quarter section of land, according to the governmental survey with the permitted well located no closer than 990 feet from the boundaries of the unit with exceptions being granted by the Director for topographic reasons upon adequate showing of inaccessibility. Well No. 1. Lundock, located in the SE/4SE/4 Section 14, Township 3 North, Range 57 West, 6th P.M., shall be considered the permitted well for the unit upon which it is 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 26th day of August 1985, as of August 19 1985.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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