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 PEORIA FIELD, ARAPAHOE COUNTY, COLORADO	) ) ) )	CAUSE NO. 226 ORDER NO. 226-17

REPORT OF THE COMMISSION

This cause came on for hearing on October 17, 1972 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 Amoco Production Company, for an order approving a Unit Agreement and Unit Operating Agreement providing for involuntary unit operations of the "J" Sand reservoir underlying the Peoria Unit Area, and further to approve a fluid injection project for secondary recovery purposes and to revise the field rules governing operations in the field as established by previous orders of the Commission in Cause No. 226 to make them consistent and compatible with unit operations.

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 "J" Sand reservoir encountered in the Twin-Quin Well No. 1, located in the NE¼SW¼SW¼ Section 289 Township 4 South, Range 60 West, 6th P.M., Arapahoe County, Colorado, between the approximate depths of 6506 and 6516 feet subsurface, has been defined and determined by drilling as underlying the following described lands in Arapahoe County, Colorado, to-wit:

Township 4 South, Range 60 West, 6th P.M.
Section	16:		Section	29:	All
Section	17:	E½SE¼	Section	30:	E½
		SW¼SE¼			SE¼NW¼
Section	19:	E½E½			SW¼
Section	20:	All	Section	31:	E½
Section	21:	NW¼NW¼			N½NW¼
		S½SW¼	Section	32:	All
		SW¼SE¼	Section	33:	All
Section	27:	S½SW¼	Section	34:	W½
		NW¼SW¼

(cont’d.)
Section	28:	W½
		SE¼
		S½NE¼
		NW¼NE¼
Township 5 South, Range 60 West, 6th P.M.
Section	4:	All
Section	5:	All
Section	6:	E½, S½NW¼, NE¼NW¼, SW¼

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

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

5.      That the Unit Agreement and Unit Operating Agreement as presented by Applicant, are necessary to increase the ultimate recovery of oil and gas from said reservoir, and that the terms provided therein are just and reasonable to all interests contained within said "J" Sand Unit Area.

6.      That the proposed fluid injection project 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 all previous restrictions on oil and gas production should be rescinded except that gas produced should be put to a beneficial use as required by Rule 4 of Order No. 226-9 and subject to the gas production requirements as set out in Order No. 226-16.

ORDER

NOW, THEREFORE, IT IS ORDERED:

1.      The Unit Agreement and Unit Operating Agreement covering lands in the Peoria "J" 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 "J" Sand reservoir, common source of supply, underlies the following described lands in Arapahoe County, Colorado, to-wit:

Township 4 South, Range 60 West, 6th P.M.
Section	16:		Section	29:	All
Section	17:	E½SE¼	Section	30:	E½
		SW¼SE¼			SE¼NW¼
Section	19:	E½E½			SW¼
Section	20:	All	Section	31:	E½
Section	21:	NW¼NW¼			N½NW¼
		S½SW¼	Section	32:	All
		SW¼SE¼	Section	33:	All
Section	27:	S½SW¼	Section	34:	W½
		NW¼SW¼
Section	28:	W½
		SE¼
		S½NE¼
		NW¼NE¼
Township 5 South, Range 60 West, 6th P.M.
Section	4:	All
Section	5:	All
Section	6:	E½, S½NW¼, NE¼NW¼, SW¼

and such area shall hereafter be known as the Peoria "J" 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 "J" Sand Unit Area of all the oil and gas that is produced from said "J" 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 Peoria "J" Sand Unit Area for their respective investments in wells, tanks, pumps, machinery, materials, and equip-ment 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 fluid injection project for the "J" sand reservoir of the Peoria "J" 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 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.      All previous restrictions concerning oil and gas production in the Peoria Unit Area are hereby rescinded except Rule 4 of Order No. 226-9, and all gas produced shall be subject to the gas production requirements as set out in Order No. 226-16.

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

ORDERED this 17th day of October, 1972.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
	By	Frank J. Piro, Secretary