REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 19, 1978, at 9 a. m., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of the Continental Oil Company for an order approving a pilot waterflood project ion the Pierre "B" formation reservoir in the McCallum Unit Area, Jackson County, Colorado. The application was amended at the time of hearing to request that the pil ot flood, if successful, be extended to the entire reservoir.

FINDINGS

The Commission finds as follows:

1. Continental Oil Company, as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

2. That due notice of the time, place, and purpose of the hearing has been given in all respects as required by law.

3. 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.

4. A unit agreement, entered into as of July 5, 1951, for the McCallum Unit Area was approved by the United States Geological Survey, and the Commission on November 20, 1973 approved a secondary recovery program by the injection of carbon dioxide gas into the Pierre "B" reservoir underlying the unit area.

5. Testimony presented at the hearing indicates that the proposed pilot program for secondary recovery by the injection of water into a portion of the Pierre "B" Sand reservoir by the use of Unit Well No. 43, SE1/4 NE1/4 Section 11 and Unit Well No. 63, NW1/4 SW1/4 Section 12, Township 9 North, Range 79 West, 6th P. M.

6. The proposed pilot program, if successful, may be expanded as a full secondary recovery program for the Pierre "B" Sand reservoir, conducted pursuant to the McCallum Unit agreement and the operator may be authorized to make such changes and additions in the operation of the project upon application to the Director.

7. The pilot waterflood project, if successful, and is expanded into a full scale project affecting the entire Pierre Sand Participating Area would be necessary to increase the ultimate recovery of oil from said area, and will result in an additional recovery with a value in excess of the estimated additional cost incident to conducting such operation. Therefore, the project should be approved as being in the public interest for conservation.

ORDER

NOW, THEREFORE< IT IS ORDERED, that the pilot waterflood project as presented for secondary recovery by the injection of water into a portion of the Pierre "B" Sand reservoir underlying the Pierre Sand Participating Area of the McCallum Unit Area, is hereby approved and the operator is authorized to inject water into Unit Well No. 43, located in the SE1/4 NE1/4 Section 11, and Unit Well No. 63, located in the NW1/4 SW1/4 Section 12, Township 9 North, Rang e 19 West, 6th P.M.

IT IS FURTHER ORDERED, that upon completion of a successful pilot waterflood, approval is hereby given to expand the project to a full secondary recovery program for the Pierre "B" Sand reservoir underlying the participating area of the McCallum Unit Area, and the operator is authorized to inject water in such quantities as shall be reasonably determined to best achieve the maximum recovery of oil without waste, and make such changes in the operation of t he program as may be required, subject to the approval of the Director; provided, however, that any interested person, or this Commission itself, may request that a full hearing he held on any such expansion.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

ORDERED this 19th day of June, 1978.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary