REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on September 16, 1975, at 9 A.M., in Room 532, State Services Building, Denver, Colorado, and was further continued for hearing on October 21, 1975, after giving Notice of Hearing as required by law, on the Commission's own motion, in the matter concerning the monthly production reports filed by the operators in the Lone Tree Field which indicated that production prac-tices in the field have not been in compliance with Order Nos. 288-5 and 288-6.

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 on December 17, 1974 the Commission issued its Order No. 288-5 which restricted production of oil from Well No. 2 Linebur, NW/4SE/4 Section 31, Township 3 South, Range 59 West, 6th P.M., and Well No. 2 Healy, NW/4NW/4 Section 6, Township 4 South, Range 59 West, 6th P.M., which were drilled as exceptions to the spacing pattern established for the field. On January 21, 1975 the Commission issued its Order No. 288-6 which restricted gas production from any well in the field capable of producing both oil and gas to 50 MCF per day. The restriction was to remain in effect until April 21, 1975, at which time no gas was to be produced unless it was either (1) marketed and sold to supply domestic, industrial or municipal needs; or (2) used for lease development or operations and fuel.

4. That the intent of Order No. 288-6 concerning restricted gas production was that the gas allowable of any one well could be transferred and produced from any other well on the same lease, provided the transfer was to a well with a lower gas-oil ratio.

5. That evidence presented at the hearing indicates that operators in the Lone Tree Field have not been in compliance with the provisions of Order Nos. 288-5 and 288-6 and that production in excess of the allowed limitations established by said orders has occurred and should be made up.

6. That such overproduction should be made up by limiting production from those wells that have overproduced to not more than 70% of the daily allowable established for each well until the overproduction is made up.

7. That in order to determine the monthly allowable for each well that has overproduced, monthly productivity tests should be-taken on certain wells in the Lone Tree Field.

(over)

8. That for purposes of this order, Rules 2 and 3 of Order No. 288-5 should be temporarily amended until such time as the overproduction is made up.

ORDER

NOW, THEREFORE, IT IS ORDERED, that restriction of production shall be placed on the following wells in the Lone Tree Field, Adams and Arapahoe Counties, Colorado, and in accordance with the following:

Rule 1. Production from Well No. 2 Linnebur, NW/4SE/4, Section 31, Town-ship 3 South, Range 59 West, and Well No. 2 Healey, NW/4NW/4 Section 6, Township 4 South, Range 5 9 West, 6th P.M. shall be restricted to 70% of the allowable as established by Order No. 288-5.

Rule 2. Production from wells on the Linnebur lease, located in the S/2NE/4 Section 31, Township 3 South, Range 59 West, shall be restricted to 70% of the production the wells are capable of making as determined by monthly productivity tests.

Rule 3. The daily allowable for the wells restricted in production by Order No. 288-5 shall be determined by productivity tests from all direct offset wells drilled in accordance with the spacing pattern established by Order No. 288-1.

IT IS FURTHER ORDERED, that Rules 2 and 3 of Order No. 288-5 shall be temporarily amended for the purposes of this order and productivity tests on those wells as determined by the Commission shall be taken during any 24-hour period between the first (1st) and fifteenth (15th) of each month, the results of which shall be reported to the Com-mission on or before the twentieth-fifth (25th) day of the month. Such tests shall be taken at a producing rate equal to the normal stabilized rate of the well and in accordance with good engineering principles and practices, and shall be the basis for calculating the alloW-able for the following month. The Commission and operators in the field shall be notified rive (5) days prior to the testing of each well in order that they will have an opportunity to witness such tests.

IT IS FURTHER ORDERED, that this order shall remain in effect for each well that has overproduced until said overproduction has been made up.

IT IS FURTHER ORDERED, that the above orders shall become effective November 1, 1975.

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

ORDERED this 21st day of October, 1975.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary - 2 -(#288-11)