BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
IN THE MATTER OF THE INVESTIGATION TO TAKE MEASURES TO PREVENT WASTE OF OIL AND GAS IN THE RANGELY FIELD IN THE STATE OF COLORADO	) ) ) )	CAUSE NO. 2 ORDER NO. 2-26

REPORT OF THE COMMISSION

The Commission held a formal hearing on October 25, 1955, in Room 243 State Capitol, Denver, Colorado, after publication of Notice of Hearing as required by law, to consider field rules for the Rangely Field. The hearing was held while Emergency Order No. 2-25 was in effect. During the effective period of the Emergency Order, Order No. 2-23 and No. 2-24 for the Rangely Field were temporarily withdrawn. The Emergency Order expires on October 28, 1955.

At the hearing two main proposals were urged upon the Commission. On behalf of The California Company it was contended that a serious drainage problem was occurring as a result of the lack of a top oil allowable for wells completed in the Weber reservoir of the Rangely Field, and that therefore The California Company was being seriously damaged.

The other operators requested that the Commission grant an extension of time before making a final decision on the Rangely Field rules, to enable the operators, namely: Sharples Oil Corporation, The Texas Company, Union Pacific, Phillips Petroleum Corporation, and Stanolind Oil and Gas Company to possibly derive and suggest a formula for the basis field wide unitization, and to present a joint recommendation to the Commission for a permanent Order for the field.

The Commission has given consideration to the two main proposals hereinbefore referred to and notes that in the statements made by all the operators in the field, it expressly and without reservation represented to the Commission that during the period between the hearing on October 25, 1955, and the date which the Commission would set for the hearing requested by the operators, with the exception of The California Company, all operators would agree to use their present injection facilities to full capacity to maintain a minimum flare.

FINDINGS

The Commission finds as follows:

1.   That due notice of the time, place and purpose of the hearing in this matter was 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 following prescribed order.

3.   The purpose of limiting the production of oil per well per day is to prevent waste and protect the correlative rights of owners and operators as defined by the statute. The evidence which has been presented to the Commission, which has not been refuted, indicates that unlimited production of oil will cause unreasonable drainage and will violate the correlative rights of certain owners and operators. A top oil allowable of three hundred (300) barrels per well per day will not materially affect the established rate of oil production from the field, and will tend to protect the correlative rights of the operators.

4.   The operators have represented that they will use their present injections facilities to full capacity between the time of the effective date of this Order and the date of the next hearing.

5.   In view of the representations mentioned in Finding 4, and in order to protect correlative rights and prevent waste, a top oil allowable of three hundred (300) barrels per well per day should be set in the field; that any well used as a gas injection well will be credited with the three hundred (300) barrel allowable, which may be produced by the operator from any well or wells on the same lease.

6.   That since several of the operators have requested a further hearing, and since every operator in the field is entitled to present recommendations and evidence to the Commission in every matter in which the operator is interested, the hearing in this matter should be continued to November 21, 1955.

7.   That it is not necessary to issue an order regulating gas, in view of the aforementioned representations regarding gas injection made at the hearing on October 25, 1955.

ORDER

NOW, THEREFORE, IT IS ORDERED that the provisions of this Order shall go into effect on October 29, 1955, and that the following rules and regulations shall be and the same are hereby adopted for the Weber Reservoir of the Rangely Field in Rio Blanco County, Colorado:

Rule 1.  That in order to prevent unreasonable drainage, and to protect the correlative rights of certain owners and Operators in the Rangely Field, the maximum production of oil from any one well producing from the Weber Reservoir during any one month, shall not exceed a daily average of three hundred (300) barrels; and that any one well shall not produce during any twenty-four (24) hour period more than twice its daily allowable and that the allowable production may be exceeded by not more than three (3) days allowable production for any one month and that any overproduction shall be made up during the month immediately following the month in which the overproduction occurred, and that any well used for gas injection shall be credited with three hundred (300) barrels of oil per well per day, which may be produced by the operators from any well or wells on the same lease.

Rule 2.  That pursuant to the voluntary promises of the operators to inject gas at their full injection capacity, the Commission does not believe it necessary to make any specific rules and regulations in regard to the production of gas.

Rule 3. That all field rules heretofore issued in conflict with this order are hereby withdrawn.

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 28^th day of October, 1955.

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