REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 28, 1976 at 9 A.M., in Room 132, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of E. Doyle Huckabay for an order to amend Order No. 288-5 to change the method of determination of the daily allowables for applicant's two exception wells; to rescind Order No. 288-7 and include in the restriction of production for exception wells the No. 3 UPRR Linnebur well, and further to amend Order No. 288-11 so that overproduction and allowables be based on the new method requested.

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 on the No. 2 Limebut well, located in the NW/4SE/4 Section 31, Township 3 South, Range 5 9 West and the No. 2 Healy well, located in the NW/4NW/4 Section 6, Township 4 South, Range 59 West, 6th P.M., to fifty percent (50%) of the average of the production from the direct offset wells drilled in accordance with the spacing pattern. The Commission, by Order No. 288-7 issued February 18, 1975, did not restrict production on the No. 3 UPRR-1innebur well drilled as an exception and located in the SE/4SE/4 Section 31, Township 3 South, Range 59 West, 6th P.M. Method of making up overproduction by certain wells in the field was established by Order No. 288-11, issued October 21, 1975.

4. That evidence presented at the hearing indicates that the previous method of determination of allowables for the exception wells as established by Order No. 288-5, does not protect the correlative rights of the operators of said exception wells and that a method to determine the allowables by the use of acre-feet underlying the off pattern wells, and the direct offset wells along with production capacity of said wells would be more equitable.

5. That the No. 3 UPRR-1innebur well, located in the SE/4NE/4 Section 31, Township 3 South, Range 59 West, 6th P.M., which was drilled as an exception to the spacing pattern as established by Order No. 288-1, does now have an advantage over other producers by reason of drilling the well as an exception, and Order No. 288-7 should be amended and said well should be included with the other exception wells for restriction of production by the method as described in Finding 4 herein.

(over)

6. That the method of make-up of overproduction as established by Order No. 288-11 should be continued, however, said order should be amended in that the make-up of overproduction should be based on the allowables as established by this order rather than Order No. 288-t and should commence with the effective date of this order.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 288-5 and 288-7 are hereby amended and restriction of production from the "J" Sand reservoir shall be placed on Well No. 2 Limebut, located in the NW/4SE/4 Section 31, Township 3 SoUth, Range 59 West, 6th P.M., Well No. 2 Healey, located in the NW/4NW/4 Section 6, Township 4 South, Range 59 West, and Well No. 3 UPRR-1innebur, located in the SE/4NE/4 Section 31, Town-ship 3 South, Range 5 9 West, 6th P.M., Lone Tree Field, Adams and Arapahoe Counties, Colorado, in accordance with the following:

1. The daily allowable, calculated on a monthly basis, for each well herein described shall be a percentage of the total daily capacity production of oil from each said well and all direct offset wells drilled in accordance with the spacing pattern established by Order No. 288-1; provided, however that each exception well shall have a minimum daily allowable of fifty (50) barrels. The percentage of the total capacity production for each exception well shall be as follows:

(a) Well No. 2 Linnebur: 18.3 percent (b) Well No. 2 Healey: 20.1 percent (c) Well No. 3 UPRR-1innebur: 20.1 percent

2. Production capacity tests shall be taken on all exception wells described herein and the direct offset wells drilled in accordance with the established spacing pattern. Such tests shall be taken during a 24-hour period between the fifteenth (15th) and twentieth (20th) of each month, the results of which shall be reported to the Commission on or before the 25th day of the month. Such tests shall be taken in accordance with good engineering principles and practices and shall be the basis for calculating the allowable for the following month. The Commission and operators of the wells affected shall be notified five (5) days prior to the testing of the wells in order that they will have an opportunity to witness such tests. March allowables will be based on tests taken in February, 1976.

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

IT IS FURTHER ORDERED, that Order No. 288-11 is hereby amended only to the extent that the make-up of overproduction shall be based on the allowables as estab-lished by this order rather than Order No. 288-5.

IT IS FURTHER ORDERED, that this order shall become effective March l, 1976.

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.

ORDERED this 24th day of February, 1976.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary (#288-12)