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 BOXER FIELD, MORGAN COUNTY, COLORADO

)

)

)

)

CAUSE NO. 204

 

ORDER NO. 204-6

 

REPORT OF THE COMMISSION

 

This cause came on for hearing on April 20, 1971, at 9 a.m., in Room 132, State Services Building, 1525 Sherman Street, Denver, Colorado, as the result of Order No. 204-5 in which it was ordered that the hearing held on March 16, 1971, concerning the application of Champlin Petroleum Company for an Order approving a Unit Agreement and Unit Operating Agreement, and further approving a water flood project for secondary recovery purposes on certain lands in the Boxer Field, Morgan County, be continued because of a protest to the granting of said application and to give the protestants time to present additional testimony.

 

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, the voluntary participants to that certain Unit Agreement presented by the applicant, and owners of tracts as indicated in the Agreement submitted as Exhibit 3 attached to the application who were not voluntary participants and who were notified, as provided for in the Rules of Practice and Procedure of the Commission.

 

3.      That the "D" Sand reservoir encountered in the Champlin Orth-Glenn Well No. 6, located in the SW¼ NE¼ Section 29, Township 2 North, Range 58 West, 6th P.M., Morgan County, Colorado, between the approximate depths of 5,868 feet and 5,904 feet subsurface, has been defined and determined by drilling as underlying the following described lands in Morgan County, Colorado, to-wit:

 

Township 1 North, Range 58 West. 6th P.M.

 

 

 

 

 

 

Section

5:

N½, SW¼

 

 

 

 

 

 

 

 

Township 2 North, Range 58 West, 6th P.M.

 

 

 

 

 

 

Section

20:

All

Section

31:

E½ E½

Section

28:

W½

Section

32:

All

Section

29:

All

Section

33:

W½ W½

 

and that said reservoir constitutes a common source of supply; and that such lands should hereafter be referred to as the Boxer "D" Sand Unit Area.

 

4. That Applicant, Champlin Petroleum Company, made diligent but unsuccessful attempts to create a voluntary unit operation.

 

5.      That although a protest was filed, the terms and conditions provided in the Unit Agreement and Unit Operating Agreement are just and reasonable to all interests contained within said "D" Sand Unit Area and that said Agreements as presented by the Applicant are necessary to increase the ultimate recovery of oil and gas from said reservoir.

 

6.      That the proposed water flood operation for secondary recovery is necessary to increase the ultimate recovery of oil and gas, and that such operation, pursuant to said Unit Agreement and Unit Operating Agreement, will result in an estimated additional recovery of oil and gas with a value in excess of the estimated additional cost incident to conducting such operation.

 

7.      That testimony presented at the hearing stated that said Unit Agreement and Unit Operating Agreement have been approved in writing by those persons who, under the agreement, will be required to pay at least eighty per cent (80%) of the costs of the unit operation, and also by the owners of at least eighty per cent (80%) of the production or proceeds attributable to royalty, overriding royalty, and production payments.

 

8.      That because of the water injection program and unitized operations planned for the Boxer Field Unit, Rules 1, 2, and 3 of Order No. 204-3, issued July 7, 1967, are no longer necessary and should be rescinded only for the Unit Area as described in Finding 3 herein, and Rule 4 of said Order revised to allow the operators to file the monthly production report as a unit total rather than on an individual well basis.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED:

 

1.      The Unit Agreement and Unit Operating Agreement covering lands in the Boxer "D" Sand Unit Area, which agreements are attached to and made a part of the original order of this Commission on file in the office of the Commission, are approved as being in the public interest for conservation.

 

2.      The "D" Sand reservoir, common source of supply, underlies the following described lands in Morgan County, Colorado, to-wit:

 

Township 1 North, Range 58 West. 6th P.M.

 

 

 

 

 

 

Section

5:

N½, SW¼

 

 

 

 

 

 

 

 

Township 2 North, Range 58 West, 6th P.M.

 

 

 

 

 

 

Section

20:

All

Section

31:

E½ E½

Section

28:

W½

Section

32:

All

Section

29:

All

Section

33:

W½ W½

 

and such area shall hereafter be known as the Boxer "D" Sand Unit Area.

 

3.      The provisions contained in said Unit Agreement and Unit Operating Agreement as they pertain to:

 

a.

The description of the pool to be so operated;

 

 

b.

The nature of said operation;

 

 

c.

The allocation to the separately owned tracts in the "D" Sand Unit Area of all the oil and gas that is produced from said "D" Sand Unit Area and is saved;

 

 

d.

The provision for the credits and charges to be made in the adjustment among the owners in the Boxer "D" Sand Unit Area for their respective investments in wells, tanks, pumps, machinery, materials, and equipment contributed to the Unit operations;

 

 

e.

The provision providing how the costs of Unit operations, including capital investments, shall be determined and charged to the separately owned tracts, and how said costs shall be paid, including the provision providing when, how, and by whom the Unit production allocated to an owner who does not pay the share of the cost of Unit operations charged to such owner, or the interest of such owners, may be sold and the proceeds applied to the payment of such costs.

 

 

f.

The provision for the supervision and conduct of the Unit operations, in respect to which each person shall have a vote with a value corresponding to the percentage of the costs of Unit operations chargeable against the interest of such person; and

 

 

g.

The time when the Unit operations shall commence, and the manner in which, and the circumstances under which, the Unit operations shall terminate, are just and reasonable, and are incorporated herein as the Commission's plan of involuntary unit operations for such lands.

 

 4.     The waterflood project for the "D" sand reservoir of the Boxer "D" Sand Unit Area, as presented by Applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject water into said reservoir through injection wells in such quantities as shall be reasonably determined by the operator to best achieve the maximum recovery of oil without waste.

 

5.      In the event that it becomes necessary in the future to convert additional producing wells to input wells; to plug and abandon certain wells in the Unit Area, or to drill additional producing or input wells as dictated by developments in the course of the operation of the waterflood, the Unit Operator is authorized to make such changes in the operation of the project as may be required to facilitate the efficient development thereof, subject to the approval of the Director.

 

6.      Rules 1, 2, and 3 of Order No. 204-3 are hereby rescinded for that Unit Area as described in Paragraph 2 of this order, and Rule 4 of said Order No. 204-3 is revised to allow operators in the Unit Area to file monthly production reports as a unit total.

 

IT IS FURTHER ORDERED, that the rules and regulations and orders contained herein shall become effective forthwith.

 

ORDERED this 20th day of April 1971.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By 

Frank J. Piro, Secretary