REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 16, 1978 at 9 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Energy Reserves Group, Inc., for an order approving a certain Unit Agreement for the Belle "D" and "J" Sand Unit Area, and further approving a waterflood project for secondary recovery purposes from the "D" and "J" Sand reservoirs underlying said area.

FINDINGS

The Commission finds as follows:

1. Energy Reserves Group, Inc, 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 "D" and "J" Sands underlying the Belle "D" and "J" Sands Unit Area as set forth in the Unit Agreement by the applicant, constitutes common sources of supply of oil and gas, and that said Unit Area consists of the following described lands in Wash-ington County, Colorado, to-wit:

Township 1 North, Range 53 West, 6th P.M. Section 34. E/2SW/4, SE/4

Township 1 South, Range 53 West, 6th P.M. Section 2: Lots 3, 4, S/2NW/4 Section 3: Lots 1, 2, NE/4SE/4

Containing 553.88 acres, more or less.

5. The terms and conditions provided in the Unit Agreement meet the requirement of the statute and are just and reasonable to all interests contained within said "D" and "J" Sand Unit Area and that, said agreement as presented by the applicant, is necessary to increase the ultimate recovery of oil and gas from said reservoirs.

6. Applicant is sole working interest owner and no unit operating agreement is necessary, and evidence presented at the hearing indicates that said agreement has been approved by more than eighty percent (80%) of other interest owners.

7. The proposed waterflood operation for secondary recovery is necessary to increase the ultimate recovery of oil and that such operation 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.

8. Applicant, Energy Reserves Group, Inc., made diligent but unsuccess-ful attempts to create a voluntary unit operation. (over)

ORDER

NOW, THEREFORE, IT IS ORDERED, that: 1. The Unit Agreement covering lands in the Belle "D" and "J" Sand Unit Area, which agreement is made a part of the order of this Commission and on file in the office of the Commission, is hereby approved as being in the public interest for conservation.

2. The "D" and "J" Sands, common sources of supply, underlying the follow-ing described lands in Washington County, Colorado, to-wit:

Township 1 North, Range 53 West, 6th P.M. Section 34 E/2SW/4, SE/4

Township 1 South, Range 53 West, 6th P.M. Section 2: Lots 3, 4, S/2NW/4 Section 3: Lots 1, 2, NE/4SE/4, S/2NE/4 Containing 553.88 acres, more or less.

3. The provisions contained in said Unit Agreement as they pertain to the requirements of the statute, are just and reasonable, and are incorporated herein as the Commission's plan of involuntary unit operations for such lands.

IT IS FURTHER ORDERED, that the waterflood project for the "D" and "J" Sand reservoirs of said Unit Area, as presented by the applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoirs, and the operator is authorized to inject water through injection wells in such quantities as shall be reason-ably determined by the operator to best achieve the maximum recovery of oil without waste.

IT IS FURTHER ORDERED, that the orders contained herein shall become effective forthwith.

IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to amend or repeal any part of and/or all of the above orders.

ORDERED this 16th day of October, 1978.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary (#340-1)