REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 18, 1981, at 9:00 A.M. in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Robert J. Gutru and Ronald N. Sinclair for an order establishing 160-acre drilling and spacing units for the produc-tion of gas and associated hydrocarbons from the Dakota and Morrison formations under-lying certain lands in a portion of the South Canyon Field, Mesa County, Colorado.

FINDINGS

The Commission finds as follows:

1. Robert J. Gutru and Ronald N. Sinclair, as applicants herein, are interested parties 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. Evidence presented at the hearing indicates that the Dakota and Morri-son formations each constitutes a common source of supply of oil and associated hydro-carbons underlying the following described lands in Mesa County, Colorado, to-wit:

Township 8 South, Range 105 West, 6th P.M. Section 24: All Township 8 South, Range 104 West, 6th P.M. Section 19: S/2

5. In order to prevent waste of oil and 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 oil and gas resources, an order should be made establishing 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from said Dakota and Morri-son formations, each a common source of supply underlying the lands defined herein; since said Section 24 is an incomplete section, the units should consist of (1) Lots 1, 2, and the NE/4 consisting of approximately 181.18 acres, with the permitted well located 2200 feet from the east line and 1800 feet from the north line of said section and (2) Lots 3, 4 and the SE/4 consisting of approximately 181.08 acres, with the permitted well the No. 14-24 Federal, located 660 feet from the west line and 1000 feet from the south line of said Section. The units for the remaining lands should consist of a quarter section according to the governmental survey.

6. All available geological and engineering data concerning said Dakota and Morrison formations, as defined, indicate that one well will efficiently and econo-mically drain an area of approximately 160-acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be effi-ciently drained by one well producing from said Dakota and Morrison formations.

(over)

ORDER

NOW THEREFORE IT IS ORDERED that the following rules and regula-tions shall apply hereafter to wells drilled completed or recompleted in the Dakota and Morrison formations underlying a portion of the South Canyon 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. One hundred sixty (160) acre drilling and spacing units shall be and the same are hereby established for the production of gas and associated hydrocar-bons from the Dakota and Morrison formations underlying the following described lands in a portion of the South Canyon Field. Mesa County. Colorado. to-wit:

Township 8 South. Range 105 West. 6th P.M. Section 24: All Township 8 South. Range 104 West. 6th P.M. Section 19: S/2

Rule 2. Said drilling units in said Section 24 shall consist of (1) Lots 1. 2 and the NE/4 with the permitted well located 2200 feet from the east line and 1800 feet from the south line and (2) Lots 3. 4 and the SE/4. with the permitted well the No. 14-24 Federal. located 660 feet from the west line and 1000 feet from the south line of said section. The units for the remaining lands shall consist of a quarter section according to the governmental survey with the permitted well located pursuant to Rule 318.

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. ENTERED this 15th day June 1981. as of May 18. 1981..

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

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