REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 19, 1983 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 High Country Exploration Group and Unioil for an order establishing 40-acre drilling and spacing units for the production of oil and associated hydrocarbons from the Codell formation underlying certain lands in Weld County, Colorado. The application was amended at the time of hearing to delete certain lands from the requested spaced area.

FINDINGS

The Commission finds as follows:

1. High Country Exploration Group and Unioil, as applicants herein, are interested parties 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 Codell formation constitutes a common source of supply of oil and associated hydrocarbons underlying the following described lands in Weld County, Colorado, to-wit:

Township 4 North, Range 67 West, 6th P.M. Section 9: SW/4

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 40-acres and spacing units for the production of oil and associated hydrocarbons from the Codell formation, a common source of supply underlying the lands defined herein; that said units should be 40-acres, more or less, and consist of a quarter-quarter section, according to the governmental survey and designated as follows: Unit 1: NE/4SW/4; Unit 2: NW/4SW/4; Unit 3; SW/4SW/4; Unit 4; SE/4SW/4 Section 9, Township 4 North, Range 67 West, 6th P.M. Only one well should be permitted to be drilled on each unit and produced from the common source of supply. The permitted well for each unit should be located in the center of each unit with a tolerance of 200 feet in any direction.

6. All available geological and engineering data concerning said Codell formation indicate that one well will efficiently and economically drain an area of approximately 40-acres, and that the drilling unit of the size and shape hereinabove described is not smaller' than the maximum area that can be efficiently and economically drained by one well producing from said Codell formation.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the Codell formation underlying that portion of the Johnstown 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. Forty (40) acre drilling and spacing units shall be and the same is hereby established for the production of oil and associated hydrocarbons from the Codell formation underlying the following described lands in the Johnstown Field, Weld County, Colorado, to-wit: Township 4 North, Range 67 West, 6th P.M. Section 9: SW/4 Rule 2. Said drilling units shall consist of 40-acres more or less, and consist of a quarter-quarter section, according to the governmental survey and designated as follows: Unit 1: NE/4SW/4; Unit 2: NW/4SW/4; Unit 3; SW/4SW/4; Unit 4; SE/4SW/4 Section 9, Township 4 North, Range 67 West, 6th P.M. Only one well shall be permitted to be drilled on each unit and produced from the common source of supply. The permitted well for each unit shall be located in the center of each unit with a tolerance of 200 feet in any direction.

IT IS FURTHER ORDERED, that the provisions contained in the above order 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.

ENTERED this 11th day of October 1983, as of September 19, 1983.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary (403-1)