REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 17, 1973, at 9 A.M., in the Auditorium, Social Services Building, Denver, Colorado, on the Commission's own motion, in order to determine what measures should be taken to pre-vent the escaping, blowing and releasing of gas in excessive or unreasonable amounts from wells capable of producing both oil and gas in the Longbranch Field, Adams County, Colorado.

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 April 18, 1972 the Commission issued its Order No. 254-1 which, among other things, established 320-acre drilling and spacing units for the pro-duction of gas and associated hydrocarbons from the "J" Sand underlying the Longbranch Field. However, there has been additional development in the south part of the field from wells capable of producing both oil and gas from the "D" and/or "J" Sands.

4. That construction and operation of a gas processing plant has not been completed and until that time of completion, flaring of casinghead gas will continue.

5. That in view of the delayed construction of the gas plant, prevention of the waste of gas during the interim period is required. For this to be accomplished, the Commission finds that the daily allowable for each well capable of producing both oil and gas from the "D" and/or "J" Sands of the Longbranch Field should not exceed ten (10) barrels of oil or twenty-five (25) Mcf of gas, whichever is first produced.

6. That such limitation of production will prevent waste as that term is defined in the Oil and Gas Conservation Act, and will not abuse the correlative rights of any owner in the field.

7. That the gas-oil ratios submitted at the time of hearing should be the basis for calculating the daily allowables for wells in the field.

8. That in order for operators to produce any one lease in the most efficient manner possible, transfer of allowables within a given lease should be permitted. (over)

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall be, and the same are hereby adopted for wells capable of producing both oil and gas from the "D" and/or "J" Sands in the Longbranch Field, Adams County, Colorado, underlying the following described lands:

Township 2 South, Range 62 West, 6th P.M. Section 14: W/2 Section 26: W/2 Section 15. All Section 27: All Section 16: All Section 28: All Section 21: All Section 33: All Section 22: All Section 34: All Section 23: W/2 Section 35: W/2

Rule 1. Production Limitation

a. The daily allowable, calculated on a monthly basis, for any one well capable of producing both oil and gas from the "D" and/or "J" Sands underlying said Longbranch Field shall be ten (10) barrels of oil or twenty-five (25) Mcf of gas, whichever is first produced. However, wells which have a gas-oil ratio in excess of 2,500 cubic feet per barrel of oil shall be granted an allowable as determined by the following formula:

Daily Oil Allowable: 10 barrels x 2,500 cubic feet per barrel Gas-oil ratio of well This limitation shall be in effect until the gas processing plant is completed and capable of receiving gas from said field, or as otherwise determined by the Commission after proper notice and hearing.

b. In order that the operators may produce their leases in the most effi-cient manner possible, the 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 within said section, provided the transfer is to a well or wells with lower gas-oil ratios.

c. The allowable production for any one month may not be exceeded by more than ten percent (10%) of the total monthly allowable; any overproduction shall be made up during the month immediately following and any underproduction may be made up only during the month immediately following.

d. The daily allowables will be determined from the gas-oil ratio tests submitted at the hearing.

e. A 15-day test period is permitted, without limitation, for new wells completed in the "D" and/or "J" Sands in said field. Upon completion of the test period, the production from the well will be limited in accordance with the provisions of this order. In order to determine the daily allowable, a gas-oil ratio test shall be taken during the test period. Adjustment of overproduction obtained during the test period shall be determined at the hearing to be held following completion of the gas plant.

Rule 2. Production Reports

a. Operators and owners of wells producing from the "D" and/or "J" Sands of the Longbranch Field shall file with the Commission a monthly report of produc-tion by wells as required on OGCC Form 7, on or before the twenty-fifth (25th) day of

-- 2 (#254-2) each month succeeding the month in which the production, occurs, unless otherwise autho-rized by the Director.

IT IS FURTHER ORDERED, that when the plan, is completed and capable of receiving gas and upon, proper notice, a hearing shall be held at the next scheduled hearing date.

IT IS FURTHER ORDERED, that this Order shall become effective April 20, 1973.

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 17th day of April, 1973.

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

- 3 -(#254-2)