REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 21, 1980 at 9:00 A.M. in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing, as required by law as a result of Order No. 355-2 in which the Commission deferred a decision on the application of L & B Oil Corporation to re-consider Order No. 355-1 concerning the size of the drilling and spacing units in the Quail Field and the classification of wells as to oil or gas.

FINDINGS

The Commission finds as follows:

1. Due notice of the time place and purpose of the hearing has been given in all respects as required by law.

2. 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. On August 21. 1979 the Commission by Order No. 355-1 established 80-acre drilling and spacing units in Section 35. Township 2 South. Range 63 West. 6th P.M. and 160-acre drilling and spacing units for the remaining lands in the Quail Field. Adams County. Colorado for the production of gas from the "J" Sand underlying the lands in said field described as follows:

Township 2 South. Range 63 West. 6th P.M. Section 25: All Section 34: E/2 Section 26: All Section 35: All Section 27: E/2 Section 36: All

4. A hearing was held on October 15. 1979 on the application of L & B Oil Company to reconsider the decision made by the Commission on August 21. 1979 and enter an order to (a) increase the size of the drilling and spacing units to 160-acres in said Section 35 to conform to the units in the remaining lands and in so doing and to pro-tect correlative rights enter an order to offset the advantage the Champlin Well No. 1. located in the NE/4NE/4 of said Section 35 may have as a gas well or Co) as an alternative. decrease the size of the drilling and spacing units in the remaining lands to 80-acres to conform to the 80-acre units in said section. As a result of the hearing the Commission on November 13 1979 issued Order No. 355-2, which deferred a decision on the applica-tion to reconsider the provisions of Order No. 355-1 until additional production data on all wells in the field is received and an additional hearing held.

5. Evidence and production data presented at the hearing indicate that an oil zone is present in the "J" Sand underlying lands in the Quail Field and that certain wells can be classified as oil wells rather than gas, and that the Champlin Well No. 1 CPC-Clair located in the NE/4NE/4 Section 35. Township 2 South. Range 63 West. 6th P.M. should be classified as an oil v/ell.

6. Order No. 355-1 should be amended and the 80-acre drilling and spac-ing units in Section 35, Township 2 South, Range 63 West, 6th P.M. should be increased to 160-acre units for the production of gas from the "J" Sand to conform to the units in the remaining lands of the Quail Field.

(over)

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order No. 355-1 is hereby amended and 160-acre drilling and spacing units are hereby established in. Section 35, Township 2 South, Range 63 West, 6th P.M. to conform to the remaining lands in the spaced area or the Quail Field, [or the production of gas from the "J" Sand underlying the lands as described in said Order No. 355-1 and Finding 3 herein.

IT IS FURTHER ORDERED, that Well No. 1 CPC-Clair 41-35, located in the NE/4NE/4 Section 35, Township 2 South, Range 63 West, 6th P.M., is hereby classified as an oil well.

ORDERED this 21st day of January 1980.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary