REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 18, 1972, at 2 P.M., in Room 132, State Services Building, Denver, Colorado, as the result of Order No. 233-2 (Emergency) in order to allow the operator of the expanded Peoria Gas Proces-sing Plant to load the plant with gas from the Peoria North Field, as well as the Peoria, Hombre, Latigo and Poncho Fields, and further ordered that operators in the fields were to present all available production and test data in order for the Commission to determine field rules for the production of oil and gas and to consider long range plans for allocation of gas to the expanded Peoria Gas Processing Plant.

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 Peoria Gas Processing Plant has been expanded to handle approximately 16, 000 Mcf of gas per day, and that in order to allow the operator of the plant to obtain gas for the expanded facility, the plant nomination should be allocated among the Hombre, Latigo, Peoria, Peoria North and Poncho Fields in Adams and Arapahoe Counties, Colorado, and that 1,000 to 3,000 Mcf of gas per day is a reasonable allocation of the plant capacity for the Peoria North Field.

4. That the Commission by its Order No. 233-1 established, among other things, 80-acre drilling and spacing units for the production of oil from the "J" Sand in the Peoria North Field, and that for purposes of this Order, the Peoria North Field should include the Peoria Gas Spaced Area defined in Order No. 226-1 and redefined by subsequent orders. Order No. 226-1 established, among other things, 320-acre drilling and spacing units for the production of gas from the "J" Sand.

5. That in order to prevent waste, as that term is defined in the Oil and Gas Conservation Act, and to prevent the escaping, blowing, and releasing of gas in an exces-sive or unreasonable amount, a maximum limit should be placed on gas production from the "J" Sand reservoir in the Peoria North Field.

6. That the maximum daily production of gas from the permitted well located on an 80-acre drilling and spacing unit for production of oil from the "J" Sand should not exceed a volume of 125, 000 cubic feet, and the maximum daily production of gas from the permitted well located on a 320-acre drilling and spacing unit for production of gas from the "J" Sand should not exceed a volume of 500,000 cubic feet.

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ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall be, and the same are hereby adopted for the "J" Sand of the Peoria North Field, as defined in Finding 4 herein, underlying the following described lands in Arapahoe County, Colorado, to-wit:

Township: 4 South, Range 60 West, 6th P.M. Section 9: All Section 22: N/2 Section 10: All Section 23: All Section 11: All Section 24: All Section 12: All Section 25: All Section 13: All Section 26: All Section 14: All Section 35: All Section 15: All Section 36: All Section 16: All Rule 1. Production Limitation

a. The nomination of 1,000-3,000 Mcf of gas per day by the operator of the Peoria Gas Processing Plant shall be the allocation of the plant capacity for the Peoria North Field.

b. The maximum daily production from the permitted well located on an 80-acre drilling and spacing unit for the production of oil from the "J" Sand shall not exceed One Hundred Twenty-Five thousand (125, 000) cubic feet, and the maxi-mum daily production from the permitted well located on a 320-acre drilling and spacing unit for the production of gas from the "J" Sand shall not exceed a volume of Five Hundred Thousand (500, 000) cubic feet.

c. In order that the operators may produce their leases in the most efficient manner possible, the gas 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 that lease; provided the transfer is to a well or wells with lower gas-oil ratios, provided further, that in no case shall an allowable greater than the capacity of the well be transferred.

d. Under and overproduction 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 overproduc-tion of gas in excess of ten percent (10%) of the total monthly allowable shall be considered a violation, unless a valid reason is given.

e. A ten (10) day test period is permitted without limitation for new wells completed in the "J" Sand in said Field.

Rule 2. Gas-Oil Ratio Tests

a. Operators and owners of wells capable of producing both oil and gas from the "J" Sand of the Peoria North 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 to be received by 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 and gas allowed to be produced for the following month. Each well shall be produced at its normal rate of production for

-2-(233-3) the last twenty-four (24) hours prior to the actual test and that during such test the well shall be produced at a rate not greater or less than 10% of the pre-test rate. Not less than ten (10) days prior to the testing of the Well a schedule shall be submitted to the Commission and to the offset operators showing the wells and the respective dates of tests so that the Commission and offset operators will have an opportunity to witness such tests. The volume of gas measured shall be reported in units of cubic feet at a base pressure of 15.025 psia and a base temperature of 60 F, and the gas-oil ratio shall be made and calculated in accordance with good engineering principles.

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

Rule 3. Individual Well Production Reports

Operators and owners of wells producing from the aforementioned "J" Sand reservoir of the Peoria North 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-fifth (25th) day of each month succeeding the month in which the production occurs.

IT IS FURTHER ORDERED, that this order shall become effective August 1, 1972.

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 19th day of July, 1972.

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

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