REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 17. 198 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 Mitchell Energy Corporation. Inc. for an order establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Dakota and Morrison formations underlying certain lands in the Whitewater Field. Mesa County, Colorado.

FINDINGS

The Commission finds as follows:

1. Mitchell Energy Corporation, Inc., as applicant herein is an inter-ested party in the subject matter of the above-referenced hearing.

2. Due notice of the time place and purpose of the hearing has been give 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 thereinnd jurisdiction to promulgate the hereinafter prescribed order.

4. Evidence presented at the hearing indicated that the Dakota and Morri-son formations each constitutes a common source of supply of gas and associated hydro-carbons underlying the following described lands in Mesa County. Colorado to-wit:

Area A Township 12 South, Range 97 West, 6th P.M. Section 31: All Section 33: All Section 32: All Township 12 South, Range 98 West, 6th P.M. Section 25: W/2 Fractional Section 26: All Fractional Section 35: All Section 36: All

Township 13 South: Range 97 West, 6th P.M. Section 4: All Section 8: All Section 5: All Section 17: All Section 6: All Section 18: All Section 7: All Section 20: All

Township 2 South, Range 2 East. Ute P.M. Section 13: All Section 24: All

(over)

Area B

Township 1 South, Range 2 East, Utc P.M. Section 14: All Section 22: All Section 15: All Section 23: All Section 16: All Section 24: All Section 21: All Section 25: All Township 12 South, Range 97 West, 6th P.M. Section 6: All Section 18: All Section 7: All Township 12 South Range 98 West, 6th P.M. Section 1: All Fractional Section 2: All Fractional Section 11: All Section 12: All Section 13: 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 spac-ing units for the production of gas and associated hydrocarbons from said Dakota and Morrison formations each a common source of supply underlying the lands defined herein; that said units should be 320-acres, more or less, and consist of the E/2 and W/2 or the N/2 and S/2 of each section, according to the governmental survey; however in Area A, since Sections 26 and 35. Township 12 South, Range 98 West, 6th P.M. are fractional sections, each section should be considered a drilling and spacing unit and because of the irregular nature of Sections 31, 32 and 33, Township 12 South, Range 97 West, 6th P.M., the drilling and spacing units should be established as follows:

Section 31 - Unit No. 1 Lots 5, 6, 11, 12, 13. 14, 19 and 20

Section 31 - U nit N o. 2 Lots 7. 8. 9. 10, 15. 16. 17 and 18

Section 32 - Unit No. 1 Lot l. NW/4NE/4 Lots 6, 7, 8, 9, 15 and 16

Section 32 - Unit No. 2 Lots 2, 3, 4, 5, 10, 11, 12, 13 and 14 Section 33 - Unit No. 1 Lots 1. 2. 7. 8. 9. 10. 16 and 17 Section 33 - Unit No. 2 Lots 3.,4. 5. 6. 11. 12. 13. 14 and 15

In Area B, since Sections 2 and 11. Township 12 South. Range 98 West. 6th P.M. are fractional said sections should each be considered a drilling and spac-ing unit and the permitted well locations in Areas A & B should be at a location no closer than 300 feet from the outer boundaries of the unit and that wells heretofore drilled and all locations heretofore approved be designated the permitted wells for the units upon which the same are located.

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

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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 and Morrison formations underlying the Whitewater Field herein described, in addition to other applicable rules and regulations and orders or the Commission, if any, hereto-fore 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 and Morrison formations underlying the following described lands in the Whitewater Field, Mesa County, Colorado, to-wit:

Area A Township 12 South, Range 97 West, 6th P.M. Section 31: All Section 33: All Section 32: All Township 12 South, Range 98 West, 6th P.M. Section 25: W/2 Fractional Section 26: All Fractional Section 35: All Section 36: All Township 13 South, Range 97 West, 6th P.M. Section 4:All Section 8: All Section 5:All Section 17: All Section 6:All Section 18: All Section 7:All Section 20: All Township 2 South, Range 2 East, Ute P.M. Section 13:All Section 24: All Area B Township 1 South, Range 2 East, Ute P.M. Section 14:All Section 22: All Section 15:All Section 23: All Section 16:All Section 24: All Section 21:All Section 25: All Township 12 South, Range 97 West, 6th P.M. Section 6: All Section 18: All Section 7: All Township 12 South, Range 98 West, 6th P.M. Section 1: All Fractional Section 2: All Fractional Section 11: All Section 12: All Section 13: All Rule 2. Said drilling units shall consist or 320-acres, more or less, and shall be the E/2 and W/2 of the N/2 and S/2 of each section according to the governmental survey; however, in Area A, since Section 26 and 35, Township 12 South, Range 98 West, 6th P.M. are fractional sections, each section shall be considered a drilling and spacing unit, and because of the irregular nature of Sections 31, 32 and 33, Township 12 South, Range 97 West, 6th P.M., the drilling and spacing units shall be established as follows:

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Section 31 - Unit No. 1 Lots 5, 6, 11, 12, 13, 14, 19 and 20

Section 31 -Unit No. 2 Lots 7, 8, 9, 10, 15, 16, 17 and 18

Section 32 - Unit No. 1 Lot 1, NW/4NE/4, Lots 6, 7, 8, 9, 15 and 16 Section 32 - Unit No. 2 Lots 2, 3, 4, 5, 10, 11, 12, 13 and 14

Section 33 - Unit No. 1 Lots 1, 2, 7, 8, 9, 10, 16 and 17

Section 33 - Unit No. 2 Lots 3, 4, 5, 6, 11, 12, 13, 14 and 15

In Area B, since Sections 2 and 11, Township 12 South, Range 98 West, 6th P.M., are fractional, said sections shall each be considered a drilling and spacing unit. The permitted well locations in Areas A & B shall be at a Location no closer than 300 feet from the outer boundaries of the unit, and that wells heretofore drilled, and locations heretofore approved, be designated the permitted wells for the units upon which the same 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 16th day of September 1981 as of August 17, 1981.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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