REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 19, 1980 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 Coseka Resources (U.S.A), Ltd., for an order establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Dakota-Morrison formation underlying certain lands in Rio Blanco County, Colorado.

FINDINGS

The Commission finds as follows:

1. Coseka Resources (U.S.A), Ltd., as applicant herein, is an interest, 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. Evidence presented at the hearing indicates that the Dakota-Morrison formation, constitutes a common source of supply of gas and associated hydrocarbons underlying the following described lands in Rio Blanco County, Colorado, to-wit:

Township 4 South, Range 103 West, 6th P.M. Section 22: All Section 24: All Section 23: All

5. In order to prevent the waste of gas, as defined by law; to protect the 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 gas resources of the State, an order should be made establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from said Dakota-Morrison formation, common source of supply underlying the lands defined herein; that said units should be 320-acre drilling units, and consist of the N/2 and S/2 of each section according the governmental survey and that Well No. 9-22 Federal, located 2,029 feet from the north line and 862 feet from the east line of said Section 22, be the permitted well for the unit consisting of the N/2 of said Section 22; Well No. 17-D Federal, located 669 feet from the north line and 1159 feet from the west line of said Section 23, be the permitted well for the unit consisting of the N/2 of said Section 23; and Well No. 12-24 Colorado Division of Wildlife, located 699 feet from the west line and 1536 feet from the north line of said Section 24, be the permitted well for the unit consisting of the N/2 of said Section 24. The permitted wells for the remaining units consisting of the S/2 of each section should be at locations in accordance with Rule 318 of the Rules and Regulations of the Commission.

6. All available geological and engineering data concerning said Dakota-Morrison formation, indicate that one (1) 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 Dakota-Morrison formation. (over)

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula tions shall apply hereafter to wells drilled, completed, or recompleted in the Dakota-Morrison formation underlying the Baxter Pass 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 and associated hydro-carbons from the Dakota-Morrison formation underlying the following described lands in the Baxter Pass Field, Rio Blanco, Colorado, to-wit:

Township 4 South, Range 103 West, 6th P.M. Section 22: All Section 24: All Section 23: All Rule 2. Said drilling units shall consist of 320-acres and said units shall be the N/2 and S/2 of each section according to the governmental survey and that Well No. 9-22 Federal, located 2,029 feet from the north line and 862 feet from the east line of said Section 22, be the permitted well for the unit consisting of the N/2 of said Section 22; Well No. 17-D Federal, located 669 feet from the north line and 1159 feet from the west line of said Section 23, be the permitted well for the unit consisting of the N/2 of said Sec-tion 23; and Well No. 12-24 Colorado Division of Wildlife, located 699 feet from the west line and 1536 feet from the north line of said Section 24, be the permitted well for the unit consisting of the N/2 of said Section 24. The permitted wells for the remaining units con-sisting of the S/2 of each section shall be at locations in accordance with Rule 318 of the Rules and Regulations of the Commission.

IT IS FURTHER ORDERED, that the rules and regulations contained herein 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.

ENTERED this 28th day of May 1980, as of May 19, 1980.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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