IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER Of THE PROMULGATION AND ESTABLISHMENT Of FIELD RULES TO GOVERN OPERATIONS IN THE HORSE GULCH FIELD, MOFFAT COUNTY, COLORADO

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CAUSE NO. 368

ORDER NO. 368-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on March 16, 1981, 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 Excel Energy Corporation for an order establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Dakota and Shinarump formations underlying certain lands in Moffat County, Colorado.

FINDINGS

The Commission finds as follows:

1. Excel Energy Corporation, 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. Evidence presented at the hearing indicates that the Dakota and Shinarump formations each constitutes a common source of supply of oil and associated hydrocarbons underlying the following described lands in Moffat County, Colorado, to-wit:

Township 5 North, Range 91 West, 6th P.M.
Section 24:	Lots 1, 2, 3, 4 and 5, SW¼NE¼,
	S½NW¼ (said lands comprising
	the approximate N½ of said Section 24).

5. In order to prevent waste of oil and 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 oil and gas resources, an order should be made establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from said Dakota and Shinarump formations, each a common source of supply underlying the lands defined herein; that said units should be 80-acres, more or less, and for the NW¼ of said section which consists of Lots 3 and 4 and the S½NW¼ the units should consist of the N½ and S½ or the E½ and W½ of said NW¼ and for the NE¼ of the section, a unit should consist of Lots 1 and 5, and a unit consisting of Lot 2 and the SW¼NE¼ with the permitted well for this unit to be the No. 32-34 Clark, at a surface location 2121 feet from the west line and 2209 feet from the north line, and a total depth 1500 feet from the north line and 1700 feet from the east line of said Section 24. The permitted well for the remaining units should be at a location no closer than 330 feet to the boundaries of the unit upon which it is located.

6. All available geological and engineering data concerning said Dakota and Shinarump formations, as defined, indicate that one well will efficiently and economically drain an area of approximately 80-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 and Shinarump, as defined.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to wells drilled, completed or recompleted in the Dakota and Shinarump formations underlying the Horse Gulch 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. Eighty (80) acre drilling and spacing units shall be and the same are hereby established for the production of oil and associated hydrocarbons from the Dakota and Shinarump formations underlying the following described lands in the Horse Gulch Field, Moffat County, Colorado, to-wit:

Township 5 North, Range 91 West, 6th P.M.
Section 24:	Lots 1, 2, 3, 4 and 5, SW¼NE¼,
	S½NW¼ (said lands comprising
	the approximate N½ of said Section 24).

Rule 2. Said drilling units shall consist of 80-acres, more or less, and for the NW¼ of said section which consists of Lots 3 and 4 and the S½NW¼, the units shall consist of the E½ and W½ or the N½ and S½ of said NW¼ and for the NE¼ of said section a unit shall consist of Lots 1 and 5, and a unit shall consist of Lot 2 and the SW¼NE¼ with the permitted well for this unit the No. 32-34 Clark, at a surface location 2121 feet from the west line and 2209 feet from the north line, and at a total depth 1500 feet from the north line and 1700 feet from the east line of said Section 24. The permitted wells for the remaining units shall be at a location no closer than 330 feet to the boundaries of the unit upon which they are located.

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 10th day of April, 1981, as of March 16, 1981.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary