BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA APPLICANT: CROWN ENERGY COMPANY ) RELIEF SOUGHT: HORIZONTAL DRILLING AND ) CAUSE CD NO. SPACING UNIT ) 201102915 ) LEGAL DESCRIPTION: SE/4 OF SECTION 31, TOWNSHIP 20 )F )L ) E NORTH, RANGE 2 WEST, AND THE NE/4 OF SECTION 6, TOWNSHIP 19 ) NORTH, RANGE 2 WEST, NOBLE JAN 01 AND LOGAN COUNTIES, OKLAHOMA ) COU OFFICE OKC ration COMMISSION REPORT OF THE ADMINISTRATIVE LAW JUDGE QF OKLAHOMA This cause came on for hearing before David D. Leavitt, Administrative Law Judge for the Corporation Commission of the State of Oklahoma, on the 19th day of October, 2011, at 8:30 a.m. in the Commission's Courtroom, Jim Thorpe Building, Oklahoma City, Oklahoma, pursuant to notice given required by law and the rules of the Commission for the purpose of taking testimony and reporting to the Commission. The Administrative Law Judge ("AU") proceeded to hear this cause and reports the following findings. CAUSE SUMMARY On June 13, 2011, Crown Energy Company ("Crown") filed its Application in Cause CD 201102915 requesting that the Commission establish an irregular 320 acre horizontal drilling and spacing unit for the production of hydrocarbons from the Cleveland common source of supply underlying the SE/4 of Section 31, Township 20 North, Range 2 West and the NE/4 of Section 6, Township 19 North, Range 2 West, Noble and Logan Counties, Oklahoma. The cause was set for a hearing on July 19, 2011. The Application was protested by Linn Energy, LLC ("Linn") on July 12, 2011. Continental Resources, Inc. ("Continental") subsequently protested the Application on October 11, 2011 and so the hearing was continued to October 19, 2011. On the day of the hearing and prior to testimony on the merits, Continental moved to continue and consolidate the cause. Crown opposed the motion because all of its witnesses were present and ready to testify and the ALJ denied the motion because Continental didn't own an interest in the land subject to the Application. Continental was allowed to make a statement with respect to its position during the hearing on the merits and Linn withdrew its protest of the Application. Continental stated that although it didn't own an interest in the SE/4 of Section 31 or the NE/4 of Section 6, it did own an interest in the NE/4 of Section 31. Continental's position was
that the proposed spacing unit is not geologically sound and would create a stand-alone 160 acre unit in the NE/4 of Section 31 that could not be economically developed by a horizontal Cleveland well presumably because the length of the horizontal weilbore would be limited by the size of the unit. These conditions could constitute waste if the hydrocarbons in the NE/4 of the section could not be profitably developed. Continental opposed the Application because the formation of the irregular horizontal drilling and spacing unit in the section would allegedly hinder the profitable recovery of hydrocarbons from the Cleveland in the NE/4 of Section 31. During the hearing, Crown presented substantial evidence that it owned interests in the land subject to the Application and had the right to drill. Crown also presented substantial evidence that all owners, including royalty, override and working interest owners, that were entitled to production from the 160 acre unit in the SE/4 of Section 31, Township 20 North, Range 2 West and the 160 acre unit in the NE/4 of Section 6, Township 19 North, Range 2 West, were given notice of the Application and of the hearing in accordance with the rules of the Commission. Crown's expert geologist and engineers presented substantial evidence showing that the establishment of the proposed irregular drilling and spacing unit would allow horizontal well development through the thickest pay in the Cleveland in the unit, thus maximizing the length of productive wellbore in the Cleveland in both Sections 31 and 6, and preventing waste. Crown's experts also suggested that the owners in the NE/4 of Section 31 could propose their own 320 acre irregular horizontal drilling and spacing unit in the NE/4 of Section 31 and the adjacent 5E14 of Section 30 of Township 20 North, Range 2 West. Doing so would allow them to drill a horizontal well with a north to south orientation whereby the horizontal wellbore could extend through the entire 320 acres of their proposed unit. RECOMMENDATION After taking into consideration all of the facts, circumstances, evidence and testimony presented in this cause, the ALJ recommends that Crown's Application requesting that the Commission establish an irregular 320 acre horizontal drilling and spacing unit for the production of hydrocarbons from the Cleveland common source of supply underlying the SE/4 of Section 31, Township 20 North, Range 2 West and the NE/4 of Section 6, Township 19 North, Range 2 West, Noble and Logan Counties, Oklahoma be granted. APPEARANCES At the time of the hearing, Mr. Richard A. Grimes, attorney, appeared on behalf of Crown; Mr. David Pepper, attorney, appeared on behalf of Continental Resources, Inc. ("Continental"); and Mr. Charles Helm, attorney, appeared on behalf of Linn Energy, LLC ("Linn"). JURISDICTION The Commission has jurisdiction over the subject matter and notice has been given in all respects as required by law and the rules of the Commission
EXHIBITS Exhibit 1 - West Lucien Prospect Map showing acres leased in an eight-section area centered upon the land described in the Application. Exhibit 2 - Oil and Gas Lease dated April 24, 1975 between Harold H. Kindschi & Geraldine T. Kindschi, husband and wife, and J. T. Hoke for land located in the S/2 SE/4 of Section 31, Township 20 North, Range 2 West in Logan and Noble County, Oklahoma. Exhibit 3 - Location Plat of the West Lucien Prospect showing the proposed irregular horizontal drilling and spacing unit in Sections 31 and 6. Exhibit 4 - Structure Map of the Big Lime part of the Cleveland common source of supply for the West Lucien Prospect showing the proposed irregular horizontal drilling and spacing unit in Sections 31 and 6. Exhibit 5 - Net Sand Isopach of the Cleveland Sand for the West Lucien Prospect showing wells in the trend extending through a ten-section area. Exhibit 6 - Type Log for the Cleveland common source of supply for the Wehling 6-1 well located in Section 6, Township 19 North, Range 2 West. Exhibit 7 - Type Logs for the Cleveland common source of supply for the Wehling 6-1 well located in Section 6, Township 19 North, Range 2 West and the Kindschi 1 well located in Section 31, Township 20 North, Range 2 West. Exhibit 8 Expanded Cleveland Isopach Map for the West Lucien Prospect. Exhibit 9 - Horizontal well production data for the Cleveland common source of supply dated September 29, 2011. Exhibit 10 - Summary of horizontal well production data for the Cleveland common source of supply. Exhibit 11 - Decline curves for Kirkpatrick Oil Company wells. Exhibit 12 Production Map showing the regional Cleveland Sand trend for the West Lucien Prospect. Exhibit 13 - Economic projections for a Cleveland horizontal well with a short lateral dated September 1, 2011. Exhibit 14 - Economic projections for a Cleveland horizontal well with a long lateral dated September 1, 2011.
SUMMARY OF THE EVIDENCE 1. Direct Examination of Mr. David Walls. Mr. Grimes called Mr. David Walls as his first witness. He said that he is an attorney and a landman, and is currently employed as a landman for Crown. He said that he is familiar with the ownership interests in the proposed unit and the surrounding land. His qualifications were accepted by the ALJ without objection. 2. He said that Crown owns leases in the Cleveland common source of supply underlying the SE/4 of Section 31, Township 20 North, Range 2 West and the NE/4 of Section 6, Township 19 North, Range 2 West, Noble and Logan Counties, Oklahoma, and has the right to drill in these sections. He also testified that Linn owns leases in the SE/4 of Section 31 and that Continental does not own any interest in the proposed unit but may own interests in the NE/4 of Section 31. 3. He identified Exhibit 1 as the West Lucien Prospect Map prepared by Crown that showed the acres leased in eight-section area centered on the proposed unit. He noted from the exhibit that Crown owns the mineral rights in 148 acres located in the SE/4 of Section 31 and in 155.32 acres in the NE/4 of Section 6. He said that Crown owns the mineral rights in a total of 1,117.5 acres in: Section 36 of Township 20 North, Range 3 West; Section 31 of Township 20 North, Range 2 West; Sections 2 and 1 of Township 19 North, Range 3 West; and Section 6 of Township 19 North, Range 2 West. 4. He identified Exhibit 2 as an Oil and Gas Lease dated April 24, 1975 between Harold H. Kindschi & Geraldine T. Kindschi, husband and wife, and J. T. Hoke for land located in the S/2 of the SE/4 of Section 31, Township 20 North, Range 2 West in Logan and Noble County, Oklahoma. He said that this lease is the basis for Linn's ownership claims in the unit. 5. Upon inquiry of counsel, he said that there is no non-horizontal spacing in effect for the Cleveland in the SE/4 of Section 31 and the NE/4 of Section 6. He said that if the Application is granted by the Commission, then the only spacing in effect for the irregular 320 acre unit will be horizontal spacing for the Cleveland. 6. He said that Crown has a pending application for another irregular 320 horizontal spacing unit for the SW/4 of Section 31 and the NW/4 of Section 6. He thought that Continental filed a competing horizontal spacing application for the W/2 of Section 31 and opined that Continental will dismiss this application if the Commission approves the Application for the irregular spacing unit in this present cause. He also noted that the Commission approved a 320 acre horizontal drilling and spacing unit for the Cleveland in the E/2 of Section 1, Township 19 North, Range 3 West. 7. He requested that Crown be the designated operator in the proposed unit and said all of the parties entitled to share in production in proposed unit are listed in Exhibit A of the Application and that Crown had good addresses and provided proper notice of the Application and of the hearing to all of the parties. ru
8. Cross Examination of Mr. David Walls. Upon inquiry of Mr. Helm, Mr. Walls said that Linn is one and the same as Mid-Continent II, LLC shown as Respondent No. 9 in the Application. He said that Linn owns 160 acres in the S12 of the SE/4 of Section 31. 9. Direct Examination of Mr. Ellis Randolph. Mr. Grimes called Mr. Ellis Randolph as his next witness. He said that he is a geologist working on behalf of Crown. His qualifications were accepted by the AU without objection. He identified Exhibit 3 as a Location Plat of the West Lucien Prospect showing the proposed irregular horizontal drilling and spacing unit in Sections 31 and 6. Also shown on the map was a lateral depiction of the proposed welibore traversing from the NEI4 of Section 6 through the SE/4 of Section 31. 10. He identified Exhibit 4 as a Structure Map of the Big Lime correlated to the Cleveland common source of supply for the West Lucien Prospect showing the proposed irregular horizontal drilling and spacing unit in Sections 31 and 6. He based the map upon electric logs and well control information taken from wells in the area. He said that the Big Lime is a good stratigraphic marker for the Cleveland and is located right below the Cleveland. He said that Cleveland is an unconformity having an irregular and inconsistent top that is difficult to map without a correlation to a good stratigraphic marker like the Big Lime. 11. He identified Exhibit 5 as a Net Sand Isopach of the Cleveland Sand for the West Lucien Prospect showing wells in the trend extending through a ten-section area. He based the map upon electric logs and well control information taken from wells in the area and determined the cut-off from gamma ray curve data. He said that this map showed the orientation of the Cleveland Sand trend in the area whereby the thickest trend in the formation extended east to west with a thinning of the formation extending to the north and to the south. He said that a well drilled in the SE/4 of Section 31 showed 62 feet of net sand while a well in the N/2 of the NE/4 of the section showed only 17 feet and a well drilled SW/4 of Section 5 showed zero feet of net sand. 12. He identified Exhibit 6 as a Neutron Density Gamma Ray Type Log for the Cleveland common source of supply taken from the Wehling 6-1 well located in Section 6, Township 19 North, Range 2 West. This well showed 63 feet of net Cleveland Sand. The log showed that the Cleveland Sand underlies all of the NE/4 of Section 6 and is separate and distinct from the other common sources of supply in the area. 13. He identified Exhibit 7 as Type Logs for the Cleveland common source of supply for the Wehling 6-1 well located in Section 6, Township 19 North, Range 2 West and the Kindschi 1 well located in Section 31, Township 20 North, Range 2 West. The Kindschi well showed 62 feet of net sand. The logs showed that the Cleveland Sand underlies all of the SE/4 of Section 31, and is separate and distinct from the other common sources of supply in the area. 14. He said that the logs shown in Exhibits 6 and 7 indicate that the sand lenses along the axis of the Cleveland Sand trend don't always match up and are not contiguous in the area, and that permeability barriers exist between the individual sand lenses. He said that the best way to maximize production from all of the separated sand lenses along the trend is by horizontal drilling whereby a long lateral can connect the individual lenses to allow maximum production along a horizontal lateral wellbore.
15. He said that maximum production would be attained by a series of horizontal wells that extend from north to south through thickest net sand region of the Cleveland all along the trend that is orientated east to west through the area. Because the thickest net sand straddles the sectional boundaries and thins to the north and the south, irregular 320 acre units are the preferred mode of development of the hydrocarbons in the area, because such spaced units will allow for the orderly development of the series of longer lateral horizontal wells that will attain maximum production from the thickest net sand. 16. He said that the lateral horizontal welibores should be oriented north to south because the net sand channel axis are orientated east to west and the wellbore should be somewhat perpendicular to the net sand channel axis in order to maximize contact with the individual sand lenses. He opined that a 320 acre irregular unit best fits the geometry of the reservoir and the individual lenses within the Cleveland. 17. He said that the establishment of the 320 acre irregular drilling and spacing unit in the area will maximize the length of the laterals for each horizontal well compared to existing 80 acre spacing. 80 acre spacing will limit the horizontal lateral weilbores to around 2,000 feet while the proposed 320 acre irregular spaced units would allow for 3,900 foot lateral welibores, thus preventing waste and maximizing production from each weilbore. 18. He said that the top of the Cleveland was around 4,750 feet and that production was expected to be primarily oil with some gas. He said that another reason for the proposed 320 acre irregular horizontal spacing was that 80 acre spacing is imposed upon a well that produces primarily oil at the estimated depth of the Cleveland, and the proposed horizontal spacing would get around the depth limitation. 19. Testimony of Mr. Craig Northcutt. Mr. Grimes called Mr. Craig Northcutt as his next witness. He said that he is a petroleum geologist working for Basin Engineering on behalf of Crown. His qualifications were accepted by the AU without objection. He said that he is involved with the drilling operation for the proposed horizontal drilling and spacing unit and had determined the costs to drill horizontal wells in the unit and in the area. 20. He prepared a cost estimate for a proposed horizontal well having a 4,640 foot lateral in the Cleveland Sand using multi-stage hydraulic fracturing and an open-hole completion. He said the completion interval for the well would be around 4,640 feet with the lateral no closer than 330 feet from the north and south boundaries of the unit if the Commission grants a location exception for the well. A legal location would be 660 feet from the north and south boundaries, and a horizontal well drilled at a legal location would have a 3,900 foot lateral. 21. He said that it would cost around $3.3 million to drill a horizontal well with a 4,600 foot lateral in the Cleveland Sand and around $3.0 million to drill a well having a 3,900 foot lateral within the proposed 320 acre irregular drilling and spacing unit. If Crown's Application is not approved, he said that it would then be necessary to drill two horizontal wells having laterals of around 2,000 feet each, one well in the SE/4 of Section 31 and another well in the NE/4 of Section 6, to attempt to capture the hydrocarbons accessible from one horizontal well in the NO
proposed 320 acre unit. He said that it would cost around $2.3 million to drill each horizontal well having a 2,000 foot lateral and around $4.6 million to drill both wells. Even if the two laterals were made from a single vertical weilbore, the cost to drill the well would still be around $4.0 million. He said that it would be wasteful to drill two wells at a cost between $4.0 million and $4.6 million to access the same amount of hydrocarbons that could be captured by one well with a longer lateral that would only cost around $3.0 million to $3.3 million. Approving the Application for the proposed 320 acre irregular drilling and spacing unit would thus prevent waste. 22. He agreed with Mr. Randolph that the Cleveland Sand was generally orientated east to west in the trend. He based his opinion partially upon published micro seismic data from the Cleveland formation in the area that showed that fracturing proceeded in an east to west orientation in the Cleveland Sand.' Although this paper was authored by employees of BP and Jones Energy and focused upon the Cleveland formation in Ellis County, Oklahoma and the Texas Panhandle, he believed that the information in the paper was relevant to an understanding of how the fractures are oriented in the Cleveland Sand in Logan and Noble Counties. 23. Testimony of Mr. John Paul Dick. Mr. Grimes called Mr. John Paul Dick as his next witness. He said that he is a petroleum engineer working on behalf of Crown. His qualifications were accepted by the ALJ without objection He identified Exhibit 8 as an Expanded Cleveland Isopach Map for the West Lucien Prospect. The map showed the location of the proposed single lateral that would be drilled in the proposed 320 acre drilling and spacing unit and the two shorter laterals that would be drilled from separate wells in Sections 31 and 6. Also shown on the map is an area that would not be accessed by the two separate laterals but would be accessed by the single proposed lateral, indicating that the proposed 320 acre drilling and spacing unit would allow access to more hydrocarbons in the two sections than would two separate wells with two separate laterals. 24. He identified Exhibit 9 as horizontal well production data for the Cleveland common source of supply and Exhibit 10 as a summary of horizontal well production data for the Cleveland common source of supply. He said that both exhibits depicted well data from wells drilled by Kirkpatrick Oil and Gas in Cleveland reservoirs located west of the proposed unit that are very similar to the Cleveland reservoir in Sections 6 and 31. He said that the Ladonna 1-35, the Smith 1-6, the Weber and the Winbum wells all had sufficient production information to forecast the ultimate recovery of oil for future wells drilled in the Cleveland Sand trend. He said that the drilling and spacing units established by the Commission for these Kirkpatrick wells were irregular 320 acre horizontal units. 25. He identified Exhibit 12 as a Production Map showing the regional Cleveland Sand trend for the West Lucien Prospect. He said that the Cleveland Sand trend found in the area of the Kirkpatrick wells is the same trend found in the area of the proposed 320 acre drilling and spacing unit. The Production Map shows all of the wells drilled in the area in the Cleveland Sand, and shows that the vertical wells are drilled close together, implying that the wells have a 'Mr. Northcutt cited a study entitled Applied Technology Helps Revitalize a Maturing Giant Gas Field. Learnings from the Cleveland Formation's Horizontal Well Redevelopment Program.. Proceedings of the Society of Petroleum Engineers. SPE Paper No. 109948. 7
low and limited drainage pattern and that the Cleveland formation is a tight sand formation. He said that the reservoir quality in the area of the Kirkpatrick wells is very similar, having similar porosity, similar water saturation and similar depth, as the reservoir in the area of the proposed drilling and spacing unit. He said that the, data indicated that the 220 to 240 horizontal wells drilled in the Cleveland in Ellis and Dewey Counties would be good background for any wells in the proposed drilling and spacing unit in Logan and Noble Counties and would support the claim that the proposed irregular 320 acre horizontal drilling and spacing unit is the best mode of development of the Cleveland Sand in the area. 26. Based upon the data from the Kirkpatrick wells, he calculated the average estimated ultimate recovery of oil and oil equivalents ("EUR OIL-EQ") for the Cleveland Sand of 49.3 barrels of oil equivalent per foot of completed lateral. Using this average value, he calculated that the longer lateral drilled in the proposed 320 acre drilling and spacing unit will recover an additional 16,000 barrels of oil and 100 MMCF gas compared to two shorter laterals from two wells drilled in the SE/4 of Section 31 and the NE/4 of Section 6. Granting the proposed 320 acre irregular drilling spacing unit will not only recover these additional hydrocarbons but will save between $1.0 million and $1.3 million in drilling costs. 27. He identified Exhibit 13 as an economic projection for a Cleveland horizontal well with a short lateral and Exhibit 14 as an economic projection for a Cleveland horizontal well with a long lateral. He said that these economic projections were based upon a barrel of oil selling for $85 and a MCF of gas selling for $5.20. He concluded from his analysis that each short lateral horizontal well recovered around 48,000 barrels of oil and 300 MMCF of gas for an investment cost of $2.276 million, yielding a rate of return or around 5.55%. He concluded that a long lateral horizontal well recovered around 110,000 barrels of oil and 700 MMCF of gas for a cost of $3.03 million, yielding a 34% rate of return and a non-discounted cash flow of $4.46 million. 28. He identified Exhibit 11 as a series of decline curves for the Kirkpatrick wells. He said that he used standard or accepted engineering techniques for creating the curves and that he used the curves to assist him in calculating the estimated ultimate recoveries for the forecasted wells. He opined that the proposed irregular 320 acre horizontal drilling and spacing unit with the permitted location no closer than 660 feet from the unit boundary would most effectively and efficiently result in both development of the Cleveland Sand and the distribution of the reserves to royalty, override and working interest owners. 29. The ALJ closed the record and took the cause under advisement. CONCLUSIONS OF LAW 30. After taking into consideration all of the facts, circumstances, evidence and testimony presented in this cause, the ALJ recommends that Crown's Application requesting that the Commission establish an irregular 320 acre horizontal drilling and spacing unit for the production of oil and gas for the Cleveland common source of supply underlying the SE/4 of Section 31, Township 20 North, Range 2 West and the NE/4 of Section 6, Township 19 North, Range 2 West, Noble and Logan Counties, Oklahoma be granted. ['I
31. The reason for this recommendation is to prevent waste. Here Crown presented significant geological evidence that the Cleveland Sand underlies all of the NE/4 of Section 6 and the SE/4 of Section 31 and that horizontal wells are the most efficient and effective means to produce hydrocarbons from the Cleveland Sand. Crown's geologist testified that logs taken from wells in the area indicate that the sand lenses along the axis of the Cleveland Sand trend don't always match up and are not contiguous in the area, and that permeability barriers exist between the individual sand lenses. He said that the best way to maximize production from all of the separated sand lenses along the trend is by horizontal drilling whereby a long lateral can connect the individual lenses to allow maximum production along a horizontal lateral wellbore. 32. Crown also presented significant evidence, taken from electric logs and well control information for the Welling 6-1 well located in Section 6, Township 19 North, Range 2 West and the Kindsehi 1 well located in Section 31, Township 20 North, Range 2 West, that showed the orientation of the Cleveland Sand trend in the area whereby the thickest trend in the formation extended east to west with a thinning of the formation extending to the north and to the south. Crown's geologist testified that a well drilled in the 5E14 of Section 31 showed 62 feet of net sand while a well in the N/2 of the NE/4 of the section showed only 17 feet and a well drilled SW/4 of Section 5 showed zero feet of net sand. 33. Data taken from Kirkpatrick wells drilled west of the proposed drilling and spacing unit also showed that the Cleveland Sand trend extended through a ten section area that included the NE/4 of Section 6 and the SE/4 of Section 31. Crown's geologist testified that maximum production would be attained by a series of horizontal wells that extend from north to south through thickest net sand region of the Cleveland all along the trend that is orientated east to west through the area. Because the thickest net sand straddles the sectional boundaries and thins to the north and the south, irregular 320 acre units are the preferred mode of development of the hydrocarbons in the area. 34. Crown's engineer agreed with its geologist that the lateral horizontal welibores should be oriented north to south because the net sand channel axis are orientated east to west and the wellbore should be somewhat perpendicular to the net sand channel axis in order to maximize contact with the individual sand lenses. He testified that a 320 acre irregular unit best fits the geometry of the reservoir and the individual lenses within the Cleveland. 35. Crown's engineer also testified that horizontal wells with maximum allowable lateral lengths are the best mode for maximizing production in the Cleveland Sand and for the prevention of waste. Crown pointed out that the Commission had approved irregular 320 acre drilling and spacing units for the Cleveland Sand in Ellis and Dewey Counties west of the proposed drilling and spacing unit, thus establishing a pattern of irregular spacing for the development of the Cleveland Sand in this area. 36. He calculated that the proposed 320 acre drilling and spacing unit would allow Crown to drill longer laterals in the proposed unit compared to the existing 160 acre quarter sections that are found in Sections 31 and 6. If the proposed drilling and spacing unit is approved, Crown can access the hydrocarbons in the thickest part of the Cleveland Sand trend with a single horizontal well having a lateral between 3,900 and 4,600 feet instead of having to drill two horizontal wells 9
with shorter laterals of only 2,000 feet. Crown's engineers estimated that drilling a single longer lateral horizontal well in the irregular unit would recover an additional 16,000 barrels of oil and 100 MMCF gas and save between $1.0 million and $1.3 million in drilling costs compared to drilling two shorter lateral horizontal wells. By approving the Application, the Commission thus prevents economic waste caused by drilling two wells instead of one and increases the recovery of hydrocarbons from the Cleveland Sand. 37. With respect to Continental's concerns, the approval of the proposed drilling and spacing Application doesn't stop the owners in the NE/4 of Section 31 from proposing their own 320 acre irregular horizontal drilling and spacing unit in the NE/4 of Section 31 and the adjacent SE/4 of Section 30 of Township 20 North, Range 2 West. Doing so would allow them to drill a horizontal well with a north to south orientation whereby the horizontal welibore could extend through the entire 320 acres of their proposed unit, thus accessing the hydrocarbons in the NE/4 of Section 31 that they had alleged would be stranded by Crown's proposed spacing. RESPECTFULLY SUBMITTED the 3Id day of January, 2012 La~ 4, lk"; DAVID LEA VITT ADMINISTRATIVE LAW JUDGE DL xc: Richard A. Grimes David Pepper Charlie Helm Michael Decker Oil Law Records Commission Files 10