226-7

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

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CAUSE NO. 226

ORDER NO. 226-7

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 20, 1970, at 10 a.m., in the P.U.C. Hearing Room, 5th Floor, Columbine Building, 1845 Sherman Street, Denver, Colorado, as the result of Order No. 226-3 (Emergency) which limited the maximum daily production of oil from any one well in the Peoria Field to 200 barrels and further ordered the operators in the field to present all available production and reservoir data in order for the Commission to determine field rules for the production of oil and gas in the field.

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 Order, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

3. That the Commission by its Order No. 226-3 (Emergency) limited the production of oil from the Peoria Field to 200 barrels per day per well and that said limitation has reduced the flaring of casinghead gas from said field to a level that is not excessive.

4. That in order to prevent waste as that term is defined in the Oil and Gas Conservation Act, a maximum limit should be placed on gas production from the "J" sand reservoir of the Peoria Field until such time a gasoline plant is constructed and a market is available for said gas.

5. That the amount of gas to be produced each day from said "J" sand, until the gasoline plant is in operation, should not exceed that amount that is being produced, with the allowed oil production, as of October 31, 1970, except that new wells completed during each month should be allowed to produce for the remainder of the month at the set daily oil allowable.

6. That based upon an approximate field gas-oil ratio of 1000 cubic feet per barrel, flaring of gas in excess of 5,200 Mcf per day is excessive and constitutes waste and should not be allowed.

7. That in order to accumulate the necessary data for allowable determinations and reservoir performance monthly gas-oil ratio tests and bottom-hole pressure surveys, as necessary, should be conducted.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall be, and the same are hereby adopted for the "J" sand formation, common source of supply of oil and gas, of the Peoria Field, Arapahoe County, Colorado, underlying the following described lands:

Township 4 South, Range 60 West, 6th P.M.

Section	19:	All	Section	29:	All
Section	20:	All	Section	30:	All
Section	21:	All	Section	31:	All
Section	22:	S½	Section	32:	All
Section	27:	All	Section	33:	All
Section	28:	All	Section	34:	All

Rule 1. Production Limitation

a. For the month of November 1970, the maximum oil allowable for each well shall be 200 barrels times the number of days in the month or 200 barrels times the number of days left in the month after completion. An oil well shall be considered completed when the first new oil is produced through wellhead equipment into lease tanks from the ultimate producing interval after the production string has been run.

b. For months subsequent to November 1970, the daily oil allowable for any one well shall be the amount of oil it is capable of producing, as determined by tests required by Rule 2 hereof; provided, however, the maximum daily oil allowable shall be determined by dividing the maximum allowed daily flare (5,200 Mcf) by the number of completed wells as of the first day of each month, this result in turn divided by one thousand (1, 000) [sic]; provided, further, the oil allowable for wells which have a gas-oil ratio in excess of one thousand (1, 000) [sic] cubic feet of gas per barrel of oil shall be adjusted by the following formula:

Daily Oil Allowable (bbls.) =	5,200 Mcf
	No. of Wells
	Gas-Oil Ratio of Well

c. In order that the operators may produce any one lease in the most efficient manner possible, the oil allowable of any one well or combination of wells on any given lease may be transferred and produced from any other well or combination of wells on a lease within one section, provided that such a transfer will result in the production of less gas. No well shall produce at a rate higher than two times its daily oil allowable except during initial production test periods; provided, however,

oil production during said test periods shall count against the well's monthly oil allowable.

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

Rule 2. Gas-Oil Ratio Tests

a. Operators and owners of wells producing from the "J" sand formation of the Peoria Field underlying the lands described in this order shall make a monthly gas-oil ratio test of each producing well, such tests to be taken during the first fifteen (15) days of each month and the results reported to the Commission on OGCC Form 9 on or before the twenty-fifth (25th) day of the same month. Such tests shall be the basis for calculating the volume of oil allowed to be produced for the following month and subject well shall be produced at its normal stabilized rate of production for a period of forty-eight (48) consecutive hours, with the gas-oil ratio computed on the basis of the measurement of oil and gas during the last twenty-four (24) hours of said period and a schedule shall be submitted to the Commission and to offset operators prior to testing, showing the wells and respective dates of tests.

b. Any operator may apply for an amended allowable upon submission of authorized test or retest results.

Rule 3. Datum Reservoir Pressure Surveys

A determination of datum reservoir pressure shall be made during the month of November 1970 and at intervals deemed necessary by the Commission and the operators. All wells capable of producing from said "J" sand reservoir of the Peoria Field shall be shut in and remain shut in until the completion of such survey. Datum reservoir pressure shall be determined after the entire field has been shut in for a period of at least forty-eight (48) hours and such pressures shall be measured with a bomb or equally accurate measuring device and reported at a datum of twelve hundred seventy (1270) feet below sea level. The results of such surveys shall be reported to the Commission within fifteen (15) days after the completion of such surveys. The Commission hereby reserves its right to amend all or part of this rule without notice and hearing where in its opinion such changes do not alter the intent of this rule.

Rule 4. Individual Well Production Reports

Operators and owners of wells producing from the aforementioned "J" sand reservoir of the Peoria Field shall file with the Commission a monthly report of production by wells, as required on a form prescribed by the Commission, on or before the twenty-fifty [sic] (25th) day of each month succeeding the month in which the production occurs.

IT IS FURTHER ORDERED that this order shall become effective November 1, 1970.

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

ORDERED this 26th day of October 1970.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary