REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 19, 1971 at 10 A.M., in the Consul Room, quality Motel, 1840 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 80-acre drilling and spacing units for the produc-tion of oil from the "J" Sand, underlying certain lands in Elbert 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 here-inafter prescribed order.

3. That evidence presented at the hearing indicates that the "J" Sand consti-tutes a common source of supply of oil underlying the following described lands in Elbert County, Colorado, to-wit:

Township 6 South, Range 60 West, 6th P.M. Section 15: All Section 27: All Section 16: All Section 28: All Section 17: All Section 29: All Section 18: All Section 30: All Section 19: All Section 31: All Section 20: All Section 32: All Section 21: All Section 33: All Section 22: All Section 34: All

4. That in order to prevent the waste of oil and gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unnec-essary wells, and to insure proper and efficient development and promote conservation of

the oil and gas resources of the State, an order should be made establishing 80-acre drill-ing and spacing units for the production of oil from the "J" Sand, common source of supply underlying the lands defined herein; that said units should be 80-acre drilling units, and consisting of the E/2 and the W/2 or the N/2 and the S/2 of each quarter section, according to the governmental survey thereof, which drilling units should be designated at the time of filing the permit to drill; and that the permitted well for each such drilling unit should be located in the center of the NE/4 and the SW/4 of each quarter section, with 8 tolerance of 200 feet in July direction.

5. That all available geological and engineering data concerning said "J" Sand indicate that one well will efficiently and economically drain an area of approxi-mately 80 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.

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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 Dull Knife 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. Eighty (80) acre drilling and spacing units shall be and the same are hereby established for the production of oil from the "J" Sand underlying the following des-cribed lands in the Dull Knife Field, Elbert County, Colorado, to-wit:

Township 6 South Range 60 West 6th P.M. Section 15: All Section 27: All Section 16: All Section 28: All Section 17: All Section 29: All Section 18: All Section 30: All Section 19: All Section 31: All Section 20: All Section 32: All Section 21: All Section 33: All Section 22: All Section 34: All

Rule 2. Said drilling units shall consist of eighty (80) acres, and each such drilling unit shall be the E/2 and the W/2 or the N/2 and the S/2 of each quarter section, ac-cording to the governmental survey thereof, which drilling units shall be designated at the time of filing the permit to drilling and the permitted well for each such drilling unit shall be located in the center of the NE/4 and the NW/4 of each quarter section, with a tolerance of 200 feet in any direction.

IT IS FURTHER ORDERED, that the rules and regulations contained herein 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, rules and regulations.

ORDERED this 19th day of January 1971.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO By Frank J. Piro, Secretary

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