232-11

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 WATTENBERG GAS SPACED AREA, ADAMS AND WELD COUNTIES, COLORADO

)

CAUSE NO. 232

ORDER NO. 232-11

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 20, 1976 at 9 a.m., in Room 532, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Webb Resources, Inc., for an order granting an exception to the spacing pattern established by the orders in Cause No. 232, for a well drilled at a location 600 feet from the north line and 600 feet from the west line of Section 20, Township 2 South, Range 64 West and that it be the permitted well for the unit upon which it is located, and be allowed to produce gas from the "J" Sand reservoir.

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 on November 11, 1970, the Commission issued its Order No. 232-1 for the Wattenberg Field which established 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the "J" Sand, with each unit to consist of the E½ and W½ or the N½ and S½ of each governmental section with the permitted well for each unit to be located in the NE¼ and SW¼ of each section, and no closer than 990 feet from the boundaries of the quarter section upon which it is located. Subsequent orders of the Commission extended the limits of the spaced area.

4. That a well was permitted at a location 600 feet from the north line and 600 feet from the west line of Section 20, Township 2 South, Range 64 West, 6th P.M. for the production of oil from the "J" Sand; however, the "J" Sand was found to be productive of gas and associated hydrocarbons and the well was completed as a shut-in gas well.

5. That the Well No. 20-4 Smith drilled in said location should be considered an exception to the spacing pattern as established by the orders in Cause No. 232; however, in order to offset any advantage said well may have over other producers by reason of drilling the well as an exception, and in order to prevent production from the drilling unit upon which the well is located, of more than its just and equitable share of gas from the "J" Sand reservoir, a restriction should be placed on the well.

6. That a restriction of twenty-five percent (25%) of the average of the daily production of gas from all direct offset wells drilled in accordance with the spacing pattern as established by the orders in Cause No. 232 will protect the correlative rights of said offset owners and should be established as the daily allowable for the No. 20-4 Smith well and said well should be the permitted well for the W½ of Section 20, Township 2 South, Range 69 West, 6th P.M., for the production of gas and associated hydrocarbons from the "J" Sand.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Well No. 20-4 Smith located 60 feet from the north line and 600 feet from the west line Section 20, Township 2 South, Range 64 West, 6th P.M., shall be considered an exception to the spacing pattern established by the orders in Cause No. 232, and shall be the permitted well for the drilling unit consisting of the W½ of said Section 20.

IT IS FURTHER ORDERED, that restriction of production of gas from the "J" Sand reservoir shall be placed on said Well No. 20-4 Smith, in accordance with the following:

1. The daily allowable, calculated on a monthly basis, shall be twenty-five percent (25%) of the average of the daily production of gas from all direct offset wells drilled in accordance with the spacing pattern established by the orders in Cause No. 232.

2. The daily allowable for the month of February, 1976, has been calculated to be 650 Mcf. The daily allowable for each succeeding month shall be determined from the report of the production from the offset wells submitted during the previous month.

3. Operators and owners of the exception wells and offset wells shall file with the Commission a monthly report of production by wells as required on OGCC Form 7 on or before the fifteenth (15th) day of each month succeeding the month in which the production occurs.

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

IT IS FURTHER ORDERED, that this order shall become effective February 1, 1976.

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 29th day of January, 1976,

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Frank J. Piro, Secretary