206-2

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 CACHE FIELD, MONTEZUMA COUNTY, COLORADO

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CAUSE NO. 206

ORDER NO. 206-2

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 18, 1988, 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 Amoco Production Company for an order allowing a well to be drilled at a location as an exception to Rule 318, Location of Wells, of the Rules and Regulations of the Commission. A Protest to the granting of the application was received.

FINDINGS

The Commission finds as follows:

1. Amoco Production 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. Rule 318, Location of Wells, of the Rules and Regulations of the Commission states in part that a well drilled in excess of 2500 feet in depth shall be located not less than 600 feet from any lease line and shall be located not less than 1200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply.

5. On September 19, 1967, the Commission issued Order No. 206-1 which authorized secondary recovery from the Ismay Formation in the Cache Unit on 40-acre well spacing.

6. Geological and engineering evidence presented at the time of hearing indicates water injection may have swept hydrocarbons to the requested exception location, and exception should be granted for a well to be drilled at a location 1980 feet from the north line and 1980 from the west line of Section 34, Township 35 North, Range 20 West, N.M.P.M.

7. If a commercial well is completed at the location set forth above, the Commission should, upon application of any interested person, take such action as will offset any advantages which the person securing the exception, may have over other producers by reason of drilling the well and an exception, including suitable provisions to prevent the production from the well drilled as an exception of more than its just and equitable share of the oil and gas in the pool.

ORDER

NOW, THEREFORE, IT IS ORDERED, that an exception to Rule 318 of Rules and Regulations of the Commission is hereby granted for a well to be drilled at a location 1980 feet from the north line and 1980 feet from the west line of Section 34, Township 35 North, Range 20 West, N.M.P.M., Montezuma County, Colorado.

IT IS FURTHER ORDERED, that if a commercial well is completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantages which the person securing the exception, may have over other producers by reason of drilling the well as an exception, including suitable provisions to prevent the production from the well drilled as exception of more than its just and equitable share of the oil and gas the pool.

ENTERED this day of 1988, as of April 16, 1988.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Dennis R. Bicknell, Secretary