REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on june 19, 1973 at 9 A.M. in the Auditorium, Social Services Building, Denver, Colorado as the result of Order No. 251-6 (Emergency) which granted temporary relief from production limita-tions as established by Order No. 251-5 in order to obtain a sufficient amount of gas to operate the Irondale Gas Processing Plant, which has been completed, and further ordered the operators of the Irondale Field to appear at the hearing to present informa-tion to the Commission in order to determine what field rules to adopt for the production of oil and gas from the field.

FINDINGS

The Commission finds as follows:

1. That due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

2. That 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.

3. That the Commission by its Order No. 251-5 in order to prevent waste, limited the production from the "D" and "J" Sand reservoirs of the Irondale Field not to exceed a daily allowable for each well of 10 barrels of oil or 25 Mcf of gas, whichever is first produced.

4. That the Irondale Gas Processing Plant has been completed to handle approximately 5, 500 Mcf low pressure casinghead gas and 10,000 Mcf of high pressure gas well gas per day and the Commission by its Order No. 251-6 (Emergency), granted temporary relief from the limitations placed on production from the Irondale Field by Order No. 251-5, in order to allow the operator to obtain sufficient gas to operate the plant.

5. That the limitations on production as established by Order No. 251-5 and defined in Finding 3 herein, are no longer necessary and should be removed.

6. That in order to obtain the necessary data for determination of the monthly allowable for each well, monthly gas-oil ratio tests should be conducted.

7. That in order for operators to produce any one lease in the most efficient manner possible, transfer of allowables within a given lease should be permitted.

8. That each person now or hereafter purchasing or taking gas from any owner or producer of wells capable of producing gas only in the Irondale Field, should offer to purchase or take ratably from each gas unit without discrimination in favor of any owner or producer over any other owner or producer in the same common source of apply offering to sell his gas produced therefrom to said person. ( over)

ORDER

NOW, THEREFORE, IT IS ORDERED, the following rules and regulations shall be, and the same are hereby adopted for the "D" and "J" Sands, common sources of supply of oil and gas, of the Irondale Field, Adams County, Colorado, underlying the following described lands:

Township 2 South, Range 61 West, 6th P.M. Section 18: SW/4 Section 30: W/2 Section 19: W/2 Section 31: NW/4 Township 2 South, Range 62 West, 6th P.M. Section 13: S/2 Section 25: All Section 14: SE/4 Section 26: E/2 Section 23: E/2 Section 35: NE/4 Section 24: All Section 36: N/2 Rule 1. Production Limitation

a. Each oil well that is not economically feasible to connect to the Irondale Gas Processing Plant shall be permitted to produce oil and associated gas, with the produced gas flared, provided that such wells are not produced at a rate exceed-ing: the field per well allowable; and each oil well that is connected to the Irondale Gas Processing Plant shall be permitted to produce the amount of oil it is capable of producing subject to the limitations that will be imposed by the Commission from a determination of each lease's gas allowable for the month in accordance with the following procedure: Step 1: As determined by tests required by Rule 2 hereof, determine which oil wells are incapable of producing the maximum Daily Gas Allowable. Classify such oil wells as Deficient Connected Wells.

Step 2: Determine a Daily Gas Allowable per oil well by the formula: Daily Gas Allowable per well (MCFD) = Gas Plant Nomination (MCFD) - Deficient Well MCFD Number of Connected Wells - Number of Deficient Connected Wells said Gas Plant Nomination to be submitted monthly by the gas plant operator to the Com-mission and to other operators in the field. Such nominations shall be submitted to the Commission on or before the twenty-fifth (25th) day of the month prior to the month for which the nomination is made.

Step 3: Add the Daily Gas Allowables determined in Step 1 and Step 2 for each lease within a governmental section and convert to a monthly basis to determine the monthly Lease Gas Allowable for the oil wells on each lease in the irondale Field.

b. In order that the operators may produce their leases in the most efficient manner possible, the gas allowable of any one oil well or combination of oil wells on any given lease may be transferred and produced from any other well or combination of wells on that lease; provided the transfer is to a well or wells with lower gas-oil ratios, provided further, that in no case shall an allowable greater than the capacity of the well be transferred.

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c. Under-and overproduction of gas shall be adjusted on a monthly basis. Underproduction of gas during any one month may be made up only during the month immediately following; and any overproduction of gas obtained during any one month shall be made up during the month immediately following. Any over-production of gas in excess of ten percent (10%) of the total monthly allowable shall be considered a violation, unless a valid reason is given.

Rule 2. Gas-Oil Ratio Tests

a. Operators and owners of oil wells producing from the/fondale Field underlying the lands described in this order shall make a monthly gas-oil ratio test of each producing well, such tests to be taken during the first fifteen (15) days of each month and the results to be received by the Commission on OGCC Form 9 on or before the twenty-fifth (25th) day of the same month. Such tests shall be the basis for calcula-ting the volume of gas allowed to be produced for the following month. Each, oil well shall be produced at its normal rate of production for the last twenty-four (24) hours prior to the actual test and that during such test the well shall be produced at the pre-test rate with a 10% tolerance. Not less than ten (10) days prior to the testing of the well, schedule shall be submitted to the Commission and to the offset operators showing the wells and the respective dates of tests so that the Commission and offset operators will have an opportunity to witness such tests. The volume of gas measured shall be reported in units of cubic feet at a base pressure of 15.025 psia and a base temperature of 6 of, and the gas-oil ratio shall be made and calculated in accordance with good engineering principles. High gas-oil ratio wells that have been shut in shall be tested quarterly, beginning in August 1973, in the same manner as provided above.

b. Any operator may apply for an amended gas allowable upon submission of authorized test or retest results.

Rule 3. Production Reports

a. The Operator of the Irondale Gas Processing Plant shall file with the Commission a monthly report of gas take by leases in the/fondale Field measured at a pressure base of 15025 psia and a temperature of 60 F on or before the twenty-fifth (25th) day of each month succeeding the month in which the gas production occurs.

b. Operators and owners of oil wells producing from the afore-mentioned field shall file with the Commission a monthly report of oil production by wells and pool, as required on OGCC Form 7, on or before the twenty-fifth (25th) day of each month succeeding the month in which the oil production occurs. Gas production by wells, at the operator's option, does not need to be reported but may be reported on this same form, provided that gas not taken by the plant must be reported showing amount of pro-duction and disposition.

IT IS FURTHER ORDERED, that the rules and regulations as established by Order No. 251-5 are hereby rescinded.

IT IS FURTHER ORDERED, that this order shall become effective August 1, 1973. -- 3 (#251-7)

IT IS FURTHER ORDERED, that the Commission expressly reserves the right, after notice and hearing, to alter, amend or repeal any part of or all of the above orders.

ORDERED this 19th day of June 1973.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO By Frank J. Piro, Secretary

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