REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 16, 1974 at 9 Kkktt, in the Auditorium, Social Services Building, Denver, Colorado and was con-tinued to the May 21, 1974 hearing date, after giving Notice of Hearing as required by law, on the application of NOR-AM Exploration Company, for an order establishing 320-acre drilling and spacing units for the production of gas from the Mesaverde forma-tion underlying certain lands in Moffat County, Colorado. The application was amended at the time of the hearing to confine the common source of supply for spacing to the Almond formation of the Mesaverde Group.

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 Almond for-mation constitutes a common source of supply of gas underlying the following described lands in Moffat County, Colorado, to-wit: Township 8 North, Range 92 West, 6th rrrtt Section 18: All Section 29: All Section 19: All Section 30: All Section 20: All Township 8 North, Range 93 West, 6th rrrtt Section 13: All Section 24: 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 unneces-sary 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 Almond formation, a common source of supply underlying the lands defined herein; that said units should be 320-acres, more or less, and consisting of the N/2 and S/2 of a governmental section; and that the permitted well for each such drilling unit should be located in the NW/4 and the SE/4` of each section and no closer than 900 feet to the boundaries of the quarter section upon which it is loca-ted, provided, however, that the Well No. 1-19 Peroulis, located 660 feet from the North line and 641 feet from the West line of Section 19, Township 8 North, Range 92 West, 6th rrrtt and Well No. 1 Lay Creek, located 2078 feet from the South line and 2218 feet

( ore r ) from the East line of Section 13, Township 8 North, Range 93 West be considered excep-tions and be the permitted wells for the units upon which they are located.

5. That all available geological and engineering data concerning said Almond formation 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 formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to wells drilled, completed, or recompleted in the Almond formation underlying the Lay Creek 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 Almond forma-tion underlying the lands described in Finding 3 herein for the Lay Creek Field, Moffat County, Colorado.

Rule 2. Said drilling units shall consist of three hundred twenty (320) acres, more or less, and each such drilling unit shall consist of the N/2 and S/2 of each section according to the governmental survey thereof, and shall be numbered and described as follows: Township 8 North, Range 92 West, 6th rrrtt Unit No. 1: Section 18: N/2 Unit No. 2: Section 18: S/2 Unit No. 3: Section 19: N/2 Unit No. 4: Section 19: S/2 Unit No. 5: Section 20: N/2 Unit No. 8: Section 20: S/2 Unit No. 7: Section 29: N/2 Unit No. 8: Section 29: S/2 Unit No. 9: Section 30: N/2 Unit No. 10: Section 30: S/2

Township 8 North, Range 93 West, 6th rrrtt Unit No. 11: Section 13: N/2 Unit No. 12: Section 18: S/2 Unit No. 13: Section 24: N/2 Unit No. 14: Section 24: S/2

Rule 8. The permitted well for each such drilling unit shall be located in the NW/4 and the SE/4 of each section and no closer than 900 feet from the boundaries of the quarter section upon which it is located; however, Well No. 1-19 Peroulis, located 880 feet from the North line and 841 feet from the West line of Section 19, Township 8 North, Range 92 West shall be considered an exception and be the permitted well for Unit 3, and Well No. 1 Lay Creek, located 2078 feet from the South line and 2218 feet from the East line of Section 18, Township 8 North, Range 93 West shall also be con-sidered an exception and be the permitted well for Unit 12.

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IT IS FURTHER ORDERED, that the provisions contained in the above orders 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 21st day of May 1974.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary