156-6

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE FLODINE PARK FIELD, MONTEZUMA COUNTY, COLORADO

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CAUSE NO. 156

ORDER NO. 156-6

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 18, 1962, at 10 a.m., in Room 132, State Services Building, Denver, Colorado, after publication and service of Notice of Hearing, or appropriate waiver thereof, all as required by law, on the application of the Monsanto Chemical Company for an order requiring the pooling of tracts of land lying within the drilling unit defined as the W½SE¼, Section 22, Township 35 North, Range 20 West, N.M.P.M., Montezuma County, Colorado, for the development and operation thereof; and allocating the production from the permitted well to be located within the SW¼SE¼ of said Section 22 to all separately owned tracts within said drilling unit on a proportionate acreage basis so that each owner of a separately owned tract within said drilling unit shall be afforded the opportunity to recover or receive his just and equitable share of said production.

FINDINGS

The Commission finds as follows:

1. That due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

2. That 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.

3. That by its Order No. 156-1, the Commission established drilling units of approximately 80 acres for the production of oil and gas from the Ismay zones of the Hermosa formation underlying the Flodine Park Field.

4. That the W½SE¼ of Section 22, Township 35 North, Range 20 West, N.M.P.M. is one of said 80-acre drilling units, and that reasonable effort has been made to obtain the voluntary pooling of all interests in said drilling unit for the development and operation thereof, but that it has not been possible to secure the agreement of all owners of interests in said unit.

5. That Applicant is an "interested person" within the meaning of 100-6-4(6) of the Oil and Gas Conservation Act of the State of Colorado.

6. That in order to insure proper and efficient development; to eliminate the drilling of unnecessary wells; to promote conservation of the oil and gas resources of the State, and to conform with the previously issued order of the Commission establishing 80-acre drilling units for the production of oil and gas from the Ismay zones of the Hermosa formation underlying the Flodine Park Field, an order should be made pooling all interests in the 80-acre drilling unit described herein.

7. That an order of the Commission pooling all interests in said drilling unit is necessary, just and reasonable in order to afford each owner of interest in said drilling unit the opportunity to recover and receive his just and equitable share of the oil and gas produced from the common source of supply underlying said drilling unit.

8. That the permitted well for said drilling unit should be located in the approximate center of the SW¼SE¼ of said Section 22, with the Sunshine Royalty Company designated as the operator of said well.

9. That the cost of drilling and operating said well, and the production obtained from said drilling unit, should be divided on an equal basis among the two working interest owners.

10. That in the event additional geological and engineering data made available from the drilling of wells in the Flodine Park Field indicate that the provisions of this order are not just and reasonable, any interested persons should be permitted to petition the Commission for a re-examination of the apportionment of the cost of drilling and operating said well, and the apportionment of production of oil and gas obtained therefrom.

11. That subsequent to the hearing, the interested parties agreed on the financial arrangements in connection with drilling and operation of the well on the unit being pooled by this order, and the allocation of production obtained from said unit; therefore, no specific order as to actual costs will be issued by the Commission.

ORDER

NOW, THEREFORE, IT IS ORDERED, that pursuant to the provisions of 100-6-4 of the Oil and Gas Conservation Act of the State of Colorado, all interests in the drilling unit described as the W½SE¼ of Section 22, Township 35 North, Range 20 West, N.M.P.M., Montezuma County, Colorado, are hereby pooled for the development and operation of said drilling unit; and the permitted well for such drilling unit shall be the No. 1 Elliott well operated by the Sunshine Royalty Company and located in the SW¼SE¼ of said Section 22.

IT IS FURTHER ORDERED, that the cost of drilling and operating said well, and the production obtained from said drilling unit, shall be divided on an equal basis among the two working interest owners.

IT IS FURTHER ORDERED, that any interested person may petition the Commission from time to time for a re-examination of the apportionment of the cost of drilling and operating said well, and apportionment of the production of oil and gas obtained therefrom, if additional geological and engineering data indicate this order is not just and reasonable.

ORDERED this 21st day of December 1962.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

D.V. Rogers, Secretary