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 "D" SAND OF THE TREND FIELD, MORGAN COUNTY, COLORADO	) ) ) )	CAUSE NO. 125 ORDER NO. 125-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 13, 1959, at 10 a.m., in the Auditorium of the Department of Employment Building, Denver, Colorado, after publication of Notice of Hearing as required by law, on the application of The British-American Oil Producing Company, for itself and the Far-West Trading Company, Petroleum, Inc., and Thames, Turnbull, and Zoch, for an order amending Order No. 116-3, to increase the maximum daily production of gas from any one producible well completed in the "D" sand formation; to provide that gas-oil-ratio tests be taken quarterly; and, to provide that datum reservoir pressure tests be made at six-month intervals; and that the Commission issue such other rules as it may deem necessary in the premises.

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 geologic and engineering testimony presented at the hearing indicates that the area known as the Bijou Area contains five separate pools, as follows: three D₂ sand pools containing oil and gas, and two D₁ sand pools containing dry gas; and that said area should be divided into three separate field [sic].

4.      That the Trend Field, heretofore contained in the Bijou Area, Cause No. 116, should include only the following described lands in Morgan County, Colorado, to-wit:

Township 5 North, Range 60 West, 6th P.M.
Section 26:	S½ S½
Section 34:	E½
Section 35:	All

5.      That in order to prevent waste, and to prevent the drilling of unnecessary wells, an order should be made establishing drilling and spacing units consisting of approximately forty (40) acres, according to the governmental survey thereof, for the production of oil from the D₂ sand; and that the permitted well for each such drilling unit should be located in the center of each quarter-quarter section in the governmental survey; and that a tolerance of one Hundred (100) feet in any direction from the prescribed location should be permitted to avoid surface hazards and obstructions; and that no intention to drill a well should be approved until all owners of interest within a given drilling and spacing unit have pooled their interests.

6.      That in order to prevent waste, and to prevent the drilling of unnecessary wells, an order should be made establishing drilling and spacing units consisting of approximately Two Hundred Forty (240) acres, according to the governmental survey thereof, for the production of gas from the D₁ sand; one unit to be South Half of the Southwest Quarter (S/2 SW/4) Section Twenty-six (26) and the Northwest Quarter (NW/4) Section Thirty-five (35); and the other unit to be the South Half of the Southeast Quarter (S/2 SE/4) Section Twenty-six (26) and the Northeast Quarter (NE/4) Section Thirty-five (35), both in Township Five (5) North, Range Sixty (60) West of the 6th P.M.; and that the two wells that have been drilled on said gas units should be allowed gas wells for the units upon which they are located.

7.      That an increase in the gas allowable, for wells capable of producing from the D₂ sand of the Trend Field, from the present 150,000 cubic feet per day per well to 200,000 cubic feet per day per well will not result in waste, provided that the gas so produced is either (1) marketed and sold to supply domestic, industrial, commercial, or municipal needs; or (2) used for lease fuel, development or operations; or (3) returned to the D₂ sand reservoir.

8.      That each person now or hereafter purchasing or taking gas from any owner or producer of gas from the D₁ sand of the Trend Field should purchase or take ratably without discrimination in favor of any owner or producer over any other owner or producer in the same common source of supply offering to sell his gas produced therefrom to such person.

9.      That quarterly capacity and gas-oil-ratio tests and semi-annual bottom-hole-pressure surveys should be conducted.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed or recompleted in the D₁ and D₂ sand formations underlying the Trend Field herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adapted and not in conflict herewith:

Rule 1.    Approximately Forty (40) acre drilling and spacing units for oil shall be and the same are hereby established for the D₂ sand formation underlying the following described lands in Morgan County, Colorado, to-wit:

South Half South Half (S/2 S/2) Section Twenty-six (26); East Half (E/2) Section Thirty-four (34); All of Section Thirty-five (35), Township Five (5) North, Range Sixty (60) West of the 6th P.M.,

and such area shall henceforth be known as the Trend Field.

Rule 2.    Said units shall consist of approximately forty (40) acres, and the permitted well for each such drilling unit shall be located in the center of each quarter-quarter section in the governmental survey, and a tolerance of One Hundred (100) feet in any direction from the prescribed location shall be permitted to avoid surface hazards and obstructions; and no intention to drill a well shall be approved until all owners of interest within a given drilling and spacing unit have pooled their interests.

Rule 3.    Two drilling and spacing units for gas of approximately Two Hundred Forty (240) acres each are hereby established for the D₁ sand formation said units to consist of the South Half of the Southwest Quarter (S½ SW¼) of Section Twenty-six (26) and the Northwest Quarter (NW¼) of Section Thirty-five (35); and the South Half of the Southeast Quarter (S½ SE¼) of Section Twenty-six (26) and the Northeast Quarter (NE¼) of Section Thirty-five (35), both in Township Five (5) North, Range Sixty (60) West of the 6th P.M., in the Trend Field, Morgan County, Colorado.

Rule 4.    (a)  That in order to prevent waste and protect correlative rights, and to prevent the escaping, blowing, and releasing of gas in an excessive or unreasonable amount from wells capable of producing both oil and gas, to be maximum daily production of gas from any one producible well completed in the D₂ sand formation underlying said Trend Field shall not exceed an approximate volume of Two Hundred Thousand (200,000) cubic feet; provided, however, that the gas so produced is either (1) marketed and sold to supply domestic, industrial, commercial or municipal needs, or (2) used for lease fuel, development or operations; or (3) returned to the D₂ sand reservoir; and provided further, that no gas shall be released directly or indirectly into the open air from any gas well.  A "gas well," as used herein, shall mean any well which has a producing gas-oil ratio of Twenty Thousand (20.000) cubic feet per barrel, or greater.

(b)     In order that the operators may produce any one lease in the most efficient manner possible, the gas allowable for any well or combination of wells on any given lease may be transferred and produced by any other well or combination of wells on the same lease; provided, however, that in no case shall an allowable greater than the capacity of the well be transferred.

(c)     Under and over production of gas from the D₂ sand formation shall be adjusted on a quarterly basis.  Underproduction of gas during any one quarter may be made up only during the quarter immediately following, and any overproduction of gas during any one quarter shall be made up during the quarter immediately following.  A quarter, as used within this order, shall mean three consecutive months, beginning with January, April, July or October.

Rule 5.    The production of gas from the D₁ sand formation shall be produced and taken ratably from each well capable of producing from said D₁ sand formation.

Rule 6.    Operators and owners of wells capable of producing from the "D" sand formation of the Trend Field, as defined in Rule 1 hereof, shall make a quarterly gas-oil-ratio test of each of his producible wells.  Such tests shall be taken during the first fifteen (15) days of the last month of each quarter, and the results of such tests shall be submitted to the Commission on or before the 25th day of said month.  Each well shall be produced at its normal stabilized rate for a period of forty-eight (48) consecutive hours, and the gas-oil ratio shall be computed on the basis of the measurement of oil and gas during the last twenty-four (24) hours of said forty-eight (48) hour period.  A schedule shall be submitted to the office of the Commission and offset operators prior to testing, showing the wells and respective dates of 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 60° Fahrenheit.

Rule 7.    A determination of datum reservoir pressure shall be made during the months of April and October of each year, such tests to be conducted during the first fifteen (15) days of a test month.  All wells capable of producing from said "D" sand formation shall be shut in and shall remain shut in until completion of the survey.  Datum reservoir pressure shall be determined after the entire field has been shut in for a period of at least twenty-four (24) hours, and such pressure shall be measured at a datum of Seventeen Hundred Twenty (1720) feet below sea level.  The results of said survey shall be reported to the Commission on or before the 25th day of said test month.

Rule 8.    Operators and owners of wells producing from the "D" sand formation shall file with the Commission a monthly report of production by wells, showing the number of days produced, covering the month next preceding the date of filing, on or before the twenty-fifth (25th) day of each month.

IT IS FURTHER ORDERED, that the provisions of this order shall apply to all operators and owners of wells capable of producing from the "D" sand formation underlying the Trend Field, and shall remain in effect unless otherwise authorized by the Commission.

IT IS FURTHER ORDERED, that this order shall become effective on April 1, 1959.

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

ORDERED this 11th day of February, 1959.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
	By	Annabel Hogsett, Secretary