REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 21, 1975, at 9 A.M., in Room 532, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Petroleum, Inc. for an order approving a certain Unit Agreement and Unit Operating Agreement, and further approving a proposed plan for injection of water into the "J-2" Sand underlying certain lands in Logan 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 the "J-2" Sand underlying the Ramrod "J-2" Sand Unit, as set forth in the Unit Agreement by the applicant, constitutes a common source of supply of oil and gas, and that said Unit consists of the following described lands in Logan County, Colo-rado, to-wit:

Township 12 North, Range 55 West, 6th P.M. Section 28: S/2 Section 33: N/2, SW/4, N/2SE/4 SW/4SE/4

4. That the terms and conditions provided in the Unit Agreement and Unit Operating Agreement are just and reasonable to all interests contained within said "J-2" Sand Unit Area and that said agreements as presented by the applicant are necessary to increase the ultimate recovery of oil and gas from said reservoir.

5. That the proposed water flood operation for secondary recovery is neces-sary to increase the ultimate recovery of oil and gas, and that such operation, pursuant to said Unit Agreement and Unit Operating Agreement, will result in an estimated additional recovery of oil and gas with a value in excess of the estimated additional cost incident to conducting such operation.

6. That on September S, 1975, the U.S. Geological Survey-approved said Unit Agreement effective as of October 1, 1975.

7. That testimony presented at the hearing stated that said Unit Agreement and Unit Operating Agreement have been approved in writing by one hundred percent (100%) of those persons who, under the agreement will be required to pay the costs of the unit operation, and also by one hundred percent (100%) of the owners of the production of pro-ceeds attributable to royalty, overriding royalty, and production payments. (over ) .

.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-

Rule 1. The "J-2" Sand underlying the Ramrod "J-2" Sand Unit Area as set forth in the Unit Agreement presented by the applicant constitutes a common source or supply of oil and gas underlying said Unit Area composed of the following lands in Logan County, Colorado, to-wit:

Township 12 North, Range 55 West, 6th P.M. Section 28: S/2 Section 33: N/2, SW/4, N/2SE/4, SW/4SE/4

Rule 2. Said Unit Agreement and Unit Operating Agreement covering the Ramrod "J-2" Sand Unit/Area herein defined, and providing for unit operations of the "J-2" Sand underlying said Unit Area, is hereby approved.

Rule 3. The waterflood project for the "J-2" Sand reservoir of the Ramrod "J-2" Sand Unit Area, as presented by the applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject water into said reservoir through Well No. 2 Nelson "N", located in the SW/4SW/4 Section 28, Township 12 North, Range 55 West, 6th P.M., in such quantities as shall be reasonably determined by the operator to best achieve the maximum recovery of oil without waste. IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective as of October 1, 1975.

ORDERED this 21st day of October, 1975.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary