REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 16, 1978 at 9 A.M., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the Commission's own motion to determine what disposition should be made of a well drilled that was not located in conformance with Order No. 250-11 for the Spindle 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 Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

3. That the Commission has issued orders in Cause No. 250 establishing 80-acre drilling and spacing units for the production of oil and gas from the Sussex and Shannon formations. Said orders have been amended to allow drilling on each 40-acre tract in most of the spaced area in the Spindle Field. However, some land, including Section 13, Township 2 North, Range 68 West, 6th P.M., is still governed by the provi-sions of Order No. 250-11 which requires 80-acre drilling and spacing units with the permitted well located in the center of the NE/4 and SW/4 of each quarter section.

4. That a well has been drilled and completed for the production of gas from the Sussex formation at the permitted location in the NE/4 NE/4 Section 13, Township 2 North, Range 68 West, 6th P.M. However, an additional well has been drilled in the SE/4 NE/4 of said Section 13 which is not in conformance with said Order No. 250-11.

5. That said well located in the SE/4 NE/4 of said Section 13 should be considered an additional well for the 80-acre drilling and spacing unit consisting of the E/2 NE/4 of said Section 13 and should be allowed to be completed for production of gas from the Sussex and Shannon formations; however, in order to offset any advantage said well may have over other producers by reason of drilling an additional well, and in order to prevent production from the drilling unit upon which it is located of more than its just and equitable share of gas, a restriction should be placed on the well.

6. That a restriction of 50% of a capacity test should be placed on the production from the Sussex and Shannon formations from said additional well.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Well No. 2 Buffalo located in the SE/4 NE/4, 1980 feet from the north line and 660 feet from the east line, Section 13, Township 2 North, Range 68 West, 6th P.M., shall be considered an additional well for the 80-acre drilling and spacing unit consisting of the E/2 NE/4 of said Section 13 and shall be allowed to be completed for production or gas from the Sussex and Shannon formations.

IT IS FURTHER ORDERED, that said well shall be restricted in production of gas to fifty percent (50%) of the amount the well is capable of producing, and the maximum daily allowable, on a monthly basis, shall be determined from a production capacity test as follows:

(over)

Rule 1. Upon completion of the well, tests shall be taken to determine the producing capacity of each the Sussex and Shannon formations. Such tests shall be conducted in accordance with good engineering principals and practices; and the volumes of gas shall be measured against the normal pressure of the gathering lines for the gas processing plant.

Rule 2. Overproduction shall be adjusted on a monthly basis. Overpro-duction obtained during any month shall be made up during the month immediately following.

IT IS FURTHER ORDERED, that the Commission expressly reserves its rights after notice and hearing, to alter, amend or repeal any and/or all of the above orders rules and regulations.

ORDERED this 16th day of January, 1978.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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(#25 O- 15 )

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