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 WATTENBERG GAS SPACED AREA, ADAMS COUNTY, COLORADO	) ) ) )	CAUSE NO.   232 ORDER NO.   232-109

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission at 8:30 a.m. on April 18, 1994 in Room 318, Centennial Building, 1313 Sherman Street, Denver, Colorado on the application of K.P. Kauffman Company, Inc. for an order to establish 80-acre drilling and spacing units in the NE1/4 of Section 29, Township 1 North, Range 64 West, 6th P.M., for production from the "D" and "J" Sand Formations, with the permitted wells to be located in the center of the NW1/4 and the SE1/4 of each quarter section, with a tolerance of 200 feet in any direction.  In addition, the order should allow the completion or recompletion of all wells drilled in said Section 29 for production of oil, gas, and associated hydrocarbons from the "D" and "J" Sand Formations, either by multiple completion or downhole commingling within the wellbore without segregation. 

FINDINGS

                        The Commission finds as follows:

                        1.  K.P. Kauffman Company, 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.  In Cause No. 232, the Commission established 320‑acre drilling and spacing units for the production of gas from the "J" Sand Formation in the Wattenberg Field with one well allowed for each unit to be located in the NE1/4 and SW1/4 and no closer than 990 feet to the boundaries of the quarter section.  On August 21, 1979, the Commission issued Order No. 232‑20 which allowed a second well to be drilled on each 320‑acre unit, including Section 29, Township 1 North, Range 64 West, 6th P.M.

                        5.  Rule 316. of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission requires that wells drilled to a depth of 2500 feet or deeper be located no closer than 600 feet from any lease line, and not less than 1,200 feet from any other producible or drilling oil or gas well drilling to the same common source of supply, unless authorized by an order of the Commission or unless waivers are obtained from those parties who will be affected by the exception location.  The "D" Sand Formation is covered under the provisions of this rule in Section 29, Township 1 North, 64 West, 6th P.M.

                        6.  Rule 320 of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission requires that an application be submitted for approval for the multiple zone completion or commingling in one well bore.

                        7.  On August 10, 1989, K.P. Kauffman Company, Inc. was issued a letter by the Director prohibiting additional production from the "J" Sand Formation from Douthit No. 2 Well due to the lack of compliance with drilling and spacing units and well location setbacks established in Cause No. 232.

                        8.  The Douthit No. 2 Well has been drilled and completed 730 feet FNL and 1959 feet FEL in the NW1/4 NE1/4 of said Section 29 and should be designated as the permitted well for the 80-acre drilling and spacing unit consisting of the W1/2 NE1/4, for multiple completion or commingled production from the "D" Sand and "J" Sand Formations.

                        9.  The applicant wishes to drill the Douthit No. 3 Well to be located in the center of the SE1/4 NE1/4, with a tolerance of 200 feet in any direction, in said Section 29, for the 80-acre drilling and spacing unit consisting of the W1/2 NE1/4, for multiple completion or commingled production from the "D" Sand and "J" Sand Formations.

                        10.  The order should allow the completion or recompletion of all wells drilled in said Section 29 for production of oil, gas, and associated hydrocarbons from the "D" and "J" Sand Formations, either by multiple completion or downhole commingling within the wellbore without segregation.

                        11.  Based on the facts stated in the application, having received no protests, and having been heard by the Hearing Officer on April 14, 1994, who recommended approval, the Commission should enter an order approving the application and rescinding the letter prohibiting production from the "J" Sand Formation from the Douthit No. 2 Well.

ORDER

                        NOW, THEREFORE, IT IS ORDERED that, the Oil and Gas Conservation Commission enter an order to establish 80-acre drilling and spacing units in the NE1/4 of Section 29, Township 1 North, Range 64 West, 6th P.M., for production from the "D" and "J" Sand Formations, and allow the completion or recompletion of all wells drilled in said Section 29 for production of oil, gas, and associated hydrocarbons from the "D" and "J" Sand Formations, either by multiple completion or downhole commingling within the wellbore without segregation.

                        IT IS FURTHER ORDERED that, the Douthit No. 2 Well located 730 feet FNL and 1959 feet FEL in the NW1/4 NE1/4 of said Section 29 be designated as the permitted well for the 80-acre drilling and spacing unit consisting of the W1/2 NE1/4 and that the letter dated August 10, 1989 prohibiting additional production from the "J" Sand Formation in said well be rescinded.

                        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  day of , 1994, as of April 18, 1994.

                                                                        OIL AND GAS CONSERVATION COMMISSION 

                                                                              OF THE STATE OF COLORADO

                                                                        By

                                                                                       Patricia C. Beaver, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203

April 25, 1994