REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 18, 1983 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 Fuel Resources Development Co. (FUELCO), for an order establishing 320-acre drilling and spacing units for the production of oil and gas from the Dakota-Morrison formations underlying certain lands in Rio Blanco County, Colorado.

FINDINGS

The Commission finds as follows:

1. Fuel Resources Development Co., 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. The Dakota-Morrison formations constitutes a common source of supply of oil and gas underlying the following described lands in Rio Blanco County, Colorado, to-wit:

Township 4 South, Range 102 West, 6th P.M. Sections 3 thru 10 Sections 15 thru 18

5. In order to prevent waste of oil and gas, as defined by law; to protect 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 of the State, an order should be made establishing 320-acre drilling and spacing units for the production of oil and gas from the Dakota-Morrison formations, common source of supply underlying the lands defined herein; that said units should be 320-acres, more or less, and consist of the N/2 and S/2 in Section 9, Township 4 South, Range 102 West, 6th P.M., and the wells located in the NW/4 and SW/4 of said Section 9, and producing from the Dakota-Morrison formations should be considered the permitted wells for the units upon which each is located, and for the remaining lands, the units should consist of the N/2 and S/2 or the E/2 and W/2 of each section, with the permitted well located no closer than 300 feet to the boundaries of the unit and no closer than 2,000 feet from any existing oil or gas well producing from the Dakota-Morrison formations in or adjoining the spaced area.

6. All geological and engineering data concerning the Dakota-Morrison formations indicate that one well will efficiently and economically drain an area of approximately 320-acres, and the drilling unit of the size and shape hereinabove described is not smaller than the maximum area that can be efficiently drained by one well producing from said Dakota-Morrison formations.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the Dakota-Morrison formations underlying the Thunder 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 l. Three hundred twenty (320) acre drilling and spacing units shall be and the same are hereby established for the production of oil and gas from the Dakota-Morrison formations underlying the following described lands in the Thunder Field, Rio Blanco County, Colorado, to-wit:

Township 4 South, Range 102 West, 6th P.M. Sections 3 thru 10 Sections 15 thru 18 Rule 2. Said units shall consist of 320-acres, more or less, and shall consist of the N/2 and S/2 in Section 9, Township 4 South, Range 102 West, 6th P.M., and the wells located in the NW/4 and SW/4 of said Section 9 and producing from the Dakota-Morrison formations shall be considered the permitted wells for the units upon which each is located, and for the remaining lands, the units shall consist of the N/2 and S/2 or the E/2 and W/2 of each section with the permitted well located no closer than 300 feet to the boundaries of the unit and no closer than 2000 feet from any existing oil or gas well producing from the Dakota-Morrison formation in or adjoining the spaced area.

IT IS FURTHER ORDERED, that the provisions contained in the above order and rules and regulations 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 order. I, February, ENTERED this 28th day of t / 1983, as of February 18, 1983.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary