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 CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO

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CAUSE NO. 407

ORDER NO. 407-44

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 19, 1988, in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law on the verified application of The Robert Gerrity Company for an order to amend Order No. [sic] 407-1 and 407-10 and to establish two 40-acre drilling and spacing units for production from the Codell and Niobrara formations underlying two 80-acre units and to allow downhole commingling of production from said formations.

FINDINGS

The Commission finds as follows:

1. The Robert Gerrity Company, as applicant herein, is an interested party in the subject matter of the above-entitled 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. On December 19, 1983 the Commission authorized Order No. 407-1 to be issued which established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Codell formation. The units consist of the E1/2 and W1/2 or the N1/2 and S1/2 of each governmental quarter-quarter section with a tolerance of 200 feet and the option to drill and [sic] additional well in the undrilled 40-acre tract. Subsequent Order No. 407-10 included the Niobrara formation and allowed downhole commingling of production from the Codell and Niobrara formations. The E1/2 SE1/4 and the W1/2 SE1/4, Section 8, Township 5 North, Range 64 West, 6th P.M., Weld County, Colorado are drilling and spacing units.

5. On December 16, 1988 the Commission received a protest to the application filed on behalf of Pauline Jurgens, an interested party to this matter. At the time of hearing, the Commission allowed the protest to be accepted. The basis of the protest was that the current price of oil and natural gas does not render the drilling of these wells to be commercially and economically justified as is required by Section 532 of the Rules and Regulations of the Commission. The Commission ruled that this determination had been properly made at the time of the original hearing in Cause No. 407.

6. Based on the facts stated in verified application and having been heard by the Hearing Officer who recommended approval of the application, the Commission should approve the request and amend Order No. 407-1 and 407-10 and establish four 40-acre drilling and spacing units consisting of (1) SE1/4 SE1/4, (2) NW1/4 SE1/4, (3) SW1/4 SE1/4 and NE1/4 SE1/4, Section 8, Township 5 North, Range 64 West, 6th P.M., Weld County, Colorado for the commingled production of oil, gas and associated hydrocarbons from the Niobrara and Codell formations.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-1 and 407-10 are hereby amended and 40-acre drilling and spacing units are hereby established for the commingled production of oil, gas and associated hydrocarbons from the Codell and Niobrara formations consisting of (1) SE1/4 SE1/4, (2) NW1/4 SE1/4, (3) SW1/4 SE1/4 and NE1/4 SE1/4, Section 8, Township 5 North, Range 64 West, 6th P.M., Weld County, Colorado.

IT IS FURTHER ORDERED, that the above order shall become effective forthwith.

ENTERED this 22nd day of December, 1988, as of December 19, 1988.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Dennis R. Bicknell, Secretary