IN THE MATTER OF THE PROMULGATION AND                      CAUSE NOS. 481, 407
ESTABLISHMENT OF FIELD RULES TO GOVERN                                       and 493
OPERATIONS IN THE ARISTOCRAT-NORTHEAST FIELD,
THE CODELL-NIOBRARA SPACED AREA AND THE                  ORDER NOS. 481-2,
WATTENBERG FIELD, WELD COUNTY, COLORADO                 407-238 and 493-41

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 8:30 a.m. on October 21, 1997 in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, on the application of Patina Oil & Gas Corporation for an order rescinding Order No. 481-1 for the lands contained in the Aristocrat-Northeast Field consisting of the S½ S½ of Section 31, Township 4 North, Range 64 West, 6th P.M. The Applicant is the operator of the four (4) wells drilled in accordance with Order Nos. 407-1 and 407-6 in the S½ S½ of Section 31 for production from the Codell and Niobrara Formations and wishes to recomplete these wells to the Sussex Formation. In addition, the Applicant requests that Order No. 493-2 and 407-67 be amended to include the above-described lands and provide 40-acre drilling and spacing units for the Sussex Formation underlying the lands, with the permitted locations for production from the Sussex Formation being designated as the location of each of these wells.

FINDINGS

The Commission finds as follows:

1. Patina Oil & Gas Corporation, as applicant herein, is an interested party in the subject matter of the above-referenced matter.

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 June 15, 1990, the Commission authorized Order No. 481-1 to be issued, establishing 40-acre drilling and spacing units for production of oil from the Sussex Formation for various lands in the Aristocrat-Northeast Field, with each well to be located no closer than 600 feet from the outer boundaries of a lease and no closer than 660 feet east or west or 660 feet north or south of an existing Codell or Niobrara Formation well, including the S½ of Section 31, Township 4 North, Range 64 West, 6th P.M.

5. In Order No. 407 1, the Commission established 80 acre drilling and spacing units with the option to drill an additional well on the undrilled 40-acre tract in each 80-acre drilling and spacing unit for the production of oil and/or gas and associated hydrocarbons from the Codell Formation. Wells shall be located in the center of the 40 acre tract or quarter quarter section with a tolerance of 200 feet in any direction. In Order Nos. 407 10 and 407 13, the Commission amended Order No. 407 1 to include production from the Niobrara Formation in certain lands and to allow the downhole commingling of production from the Codell and Niobrara Formations, including Section 31, Township 4 North, Range 64 West, 6th P.M.

6. In Order Nos. 493 2 and 407-67, the Commission established 80 acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Sussex Formation in certain lands in Weld County, Colorado. Wells shall be located in the center of the 40 acre tract or quarter quarter section with a tolerance of 200 feet in any direction and the downhole commingling of production from the Sussex, Codell and Niobrara Formations shall be allowed.

7. Patina Oil and Gas Corporation is the owner of four (4) Codell and Niobrara Formation wells located in the S½ S½ of Section 31, Township 4 North, Range 64 West, 6th P.M.

8. Patina is currently attempting to purchase the Sussex Formation rights for the S½ S½ of Section 31, Township 4 North, Range 64 West, 6th P.M., and wishes to recomplete the Sussex Formation in these four (4) wells.

9. By rescinding Order No. 481-1 Patina will be able to recomplete existing Codell and Niobrara Formation wells to the Sussex Formation, preventing the drilling of unnecessary wellbores, while protecting correlative rights and preventing waste.

10. At the time of the administrative hearing, the Applicant agreed to be bound by oral order of the Commission.

11. Based on the facts stated in the application, having received no protests to the application, and having been heard by the Hearing Officer who recommends approval of the application, the Commission should enter an order rescinding Order No. 481-1 for the lands contained in the Aristocrat-Northeast Field consisting of the S½ S½ of Section 31, Township 4 North, Range 64 West, 6th P.M., and amending Order Nos. 493-2 and 407-67 to include the above-described lands providing 40-acre drilling and spacing units for the Sussex Formation underlying the lands, with the permitted locations for production from the Sussex Formation being designated as the location of each of the existing Codell and Niobrara Formation wells.

O R D E R
 

NOW, THEREFORE, IT IS ORDERED that the lands consisting of the S½ S½ of Section 31, Township 4 North, Range 64 West, 6th P.M., are hereby rescinded from the provisions of Cause No. 481 governing operations in the Aristocrat-Northeast Field and shall be placed under the provisions of Order Nos. 493-2 and 407-67 providing 40-acre drilling and spacing units for the Sussex Formation, with the permitted locations for production from the Sussex Formation being designated as the location of each of the existing Codell and Niobrara Formation wells.

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 14th day of November, 1997, as of October 21, 1997.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary

Dated at Suite 801, 1120 Lincoln Street, Denver, Colorado 80203 November 14, 1997

(481-2)