226-1

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 PEORIA FIELD, ARAPAHOE COUNTY, COLORADO

)

CAUSE NO. 226

ORDER NO. 226-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 19, 1970, at 10 am., in the P.U.C. Hearing Room, 5th Floor, Columbine Building, 1845 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Pan American Petroleum Corporation, for an order establishing 320-acre drilling and spacing units for the production of gas from the Muddy formation underlying certain lands in Arapahoe County, Colorado.

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 evidence presented at the hearing indicates that the Muddy formation, hereinafter referred to as the "J" sand, constitutes a common source of supply of gas underlying the following described lands in Arapahoe County, Colorado, to-wit:

Township 4 South, Range 60 West [sic]

Section	9:	All	Section	23:	All
Section	10:	All	Section	24:	All
Section	11:	All	Section	25:	All
Section	12:	All	Section	26:	All
Section	13:	All	Section	27:	All
Section	14:	All	Section	28:	All
Section	15:	All	Section	29:	All
Section	16:	All	Section	30:	All
Section	17:	All	Section	31:	All
Section	18:	All	Section	32:	All
Section	19:	All	Section	33:	All
Section	20:	All	Section	34:	All
Section	21:	All	Section	35:	All
Section	22:	All	Section	36:	All

4. That in order to prevent the waste of gas, as defined by law; to protect the 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 gas resources of the State, an order should be made establishing 320-acre drilling and spacing units for the production of gas from the "J" sand, common source of supply underlying the lands defined herein; that said units should be 320-acre drilling units, and consisting of the E½ and the W½ or the N½ and the S½ of each section, according to the governmental survey thereof; and that the permitted well for each l such drilling unit should be located no closer than 990 feet from the outer boundary of the drilling unit.

5. That the No. 1 Price well, located 660 feet from the South line and 660 feet from the West line, Section 14, Township 4 South, Range 60 West, 6th P.M., be considered an exception and be the permitted well for the drilling unit upon which it is located.

6. That all available geological and engineering data concerning said "J" sand indicate that one well will efficiently and economically drain an area of approximately 320 acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one well producing from said "J" sand.

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 the Peoria 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. Three Hundred Twenty (320) acre drilling and spacing units shall be and the same are hereby established for the production of gas from the "J" sand underlying the following described lands in the Peoria Field, Arapahoe County, Colorado, to-wit:

Township 4 South, Range 60 West [sic]

Section	9:	All	Section	23:	All
Section	10:	All	Section	24:	All
Section	11:	All	Section	25:	All
Section	12:	All	Section	26:	All
Section	13:	All	Section	27:	All
Section	14:	All	Section	28:	All
Section	15:	All	Section	29:	All
Section	16:	All	Section	30:	All
Section	17:	All	Section	31:	All
Section	18:	All	Section	32:	All
Section	19:	All	Section	33:	All
Section	20:	All	Section	34:	All
Section	21:	All	Section	35:	All
Section	22:	All	Section	36:	All

Rule 2. No well shall be drilled or completed in the spaced area and no application for permit to drill shall be approved by the Director unless:

(a) Such well be located on a designated drilling unit of 320 acres, more or less, according to the governmental survey thereof, in which unit all of the interests of owners are consolidated by a pooling agreement or otherwise, and on which no other well is completed or approved for completion in the same pool, and each such drilling unit shall be the E½ and the W½ or the N½ and the S½ of each full section.

(b) The permitted well for each such drilling unit shall be located no closer than 990 feet from the outer boundary of the drilling unit.

IT IS FURTHER ORDERED that an exception is hereby granted for the No. 1 Price well located 660 feet from the South line and 660 feet from the West line, Section 14, Township 4 South, Range 60 West, 6th P.M., and that such well shall be the permitted well for the drilling unit upon which it is located.

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, rules and regulations.

ORDERED this 19th day of May 1970.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary