3-28

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 IGNACIO FIELD, LA PLATA COUNTY, COLORADO, WITH PARTICULAR REFER-ENCE TO THAT KNOWN PRODUCING ZONE LOCATED THEREIN TERMED "MESAVERDE"

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CAUSE NO. 3

ORDER NO. 3-28

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 17, 1956, at 10:00 A.M. in Room 243, State Capitol, Denver, Colorado, after publication of Notice of Hearing as required by law, on the Commission's own motion for extension of the area known as the Ignacio Field, with particular reference to that known producing zone located therein and termed "Mesaverde".

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 Mesaverde formation in the Ignacio Field constitutes a common source of supply of gas underlying, in addition to the area set forth in Order No. 3-14, the following described lands in La Plata County, Colorado, to-wit:

Township 33 North, Range 9 West, N.M.P.M.

Sections 19, 28, 29, 30, 31 and 32

Township 33 North; Range 10 West; N.M.P.M.

Sections 4, 5, 8, 9, 15, 16, 21, 22, 23, 24, 25, 26, 27, 28, 33, 34, 35 and 36

4. That in order to prevent waste of gas, as defined by law, to protect the correlative rights of all parties concerned; to insure proper and efficient development, and to promote conservation of the gas resources of the State, an order should be made establishing 320-acre drilling and spacing units for the production of gas from the Mesaverde formation, single common source of supply underlying said land, as defined herein.

5. That all available geological and engineering data concerning the said Mesaverde formation in the Ignacio Field, and in the additional area hereinabove described, indicate that one well will adequately and efficiently drain an area of at least 320 acres of land in said formation.

6. That all wells drilled, and all locations approved by the Commission prior to July 17, 1956, should be the permitted wells or locations for the respective drilling units.

ORDER

NOW, THEREFORE, IT IS ORDERED that the following rules and regulations shall apply to wells heretofore and hereafter drilled and completed or recompleted in the Ignacio Mesaverde pool, as herein defined, in addition to other applicable rules, regulations and orders of the Commission heretofore adopted and not in conflict herewith.

Rule 1. Three Hundred Twenty (320) acre drilling and spacing units shall be; and the same are hereby established for the production of gas from the Mesaverde formation, single common source of supply underlying the following described lands in La Plata County, Colorado, which include the original Igancio [sic] Mesaverde Field and the additional area herein described in the Findings:

Sections Six (6), Seven (7), Eighteen (18) and Nineteen (19), Township Thirty-three (33) North, Range Seven (7) West of the New Mexico P.M. Sections One (1), Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), Eight (8), Nine (9), Ten (10), Eleven (11), Twelve (12), Thirteen (13), Fourteen (14), Fifteen (15), Sixteen (16), Seventeen (17), Eighteen (18), Nineteen (19), Twenty (20), Twenty-one (21), Twenty-two (22), Twenty-three (23) and Twenty-four (24), Township Thirty-three (33) North, Range Eight (8) West of the New Mexico P.M., Sections One (1), Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), Eight (8), Nine (9), Ten (10), Eleven (11), Twelve (12), Thirteen (13), Fourteen (14), Fifteen (15), Sixteen (16), Seventeen (17), Eighteen (18), Nineteen (19), Twenty (20), Twenty-one (21), Twenty-two (22), Twenty-three (23), Twenty-four (24), Twenty-eight (28), Twenty-nine (29), Thirty (30), Thirty-one (31) and Thirty-two (32), Township Thirty-three (33) North, Range Nine (9)West of the New Mexico P.M., and Sections One (1), Two (2), Three (3), Four (4), Five (5), Eight (8), Nine (9), Ten (10), Eleven (11), Twelve (12), Thirteen (13), Fourteen (14), Fifteen (15), Sixteen (16), Twenty-one (21), Twenty-two (22), Twenty-three (23), Twenty-four (24), Twenty-five (25), Twenty-six (26), Twenty-seven (27), Twenty-eight (28), Thirty-three (33), Thirty-four (34), Thirty-five (35) and Thirty-six (36), Township Thirty-three (33) North, Range Ten (10) West of the New Mexico P.M.,

and such area is known as the Ignacio Mesaverde Field.

Rule 2. No well shall be drilled and completed or recompleted in the said pool, and no notice of intention to drill shall be approved by the Commission unless:

(a) Such well be located on a designated drilling unit of not less than 320 acres of land, more or less, according to legal subdivisions of the United States Land Surveys in which unit all of the interests of owners are consolidated by a pooling agreement or otherwise, and on which no other well is completed or approved for completion in the same pool.

(b) Such drilling unit be in the shape of a rectangle except for normal variations in legal subdivisions of the United States Land Surveys, the North Half (N/2), South Half (S/2), East Half (E/2) or West Half (W/2) of each section constituting the drilling unit.

(c) Such well to be drilled no closer than 990 feet to the outer boundaries of the quarter section upon which it is located.

(d) Such well as drilled in the Ignacio Mesaverde pool be located in either the Northwest Quarter (NW/4) or the Southeast Quarter (SE/4) of the section on which it is located.

Rule 3. The Commission may, by order entered after due notice and hearing, and to prevent waste or confiscation of property, or to prevent inclusion of unproductive land in a drilling unit, grant exceptions to the provisions of Rule 2 above; and the Commission may, without additional notice and hearing, grant exceptions to Rule 2(c) above, when because of topographical reasons it is necessary to locate such well closer than 990 feet to the boundaries of the quarter section in which the well Is drilled.

Rule 4. The casing program of all wells hereafter drilled in the Ignacio Mesaverde pool shall include at least two (2) strings of casing which shall be set in accordance with the following:

(a) The surface casing shall consist of new or reconditioned pipe with the original mill test of not less than 1200 psi and shall be set and cemented at a point such that all fresh water and water of present or probable value for domestic, commercial or stock purposes shall be confined to their respective strata and shall be adequately protected against contamination by objectionable water, oil or gas, provided that the point at which the surface casing shall be set and cemented shall in no case be less than 200 feet below the surface of the earth. Cementing shall be by the pump and plug method, and sufficient cement shall be used to fill the annular space behind the pipe to the surface of the ground or the bottom of the cellar. Cement shall be allowed to stand a minimum of 24 hours before drilling the plug or initiating tests. Before drilling the plug, a pump pressure of at least 1000 psi shall be applied. If at the end of 30 minutes, the pressure shows a drop of 100 psi or more, the casing shall be condemned. In lieu of the foregoing test, the surface casing shall be tested after drilling the plug by bailing the hole dry. The hole shall remain dry for one (1) hour to constitute satisfactory proof of a water shutoff. In event the casing is condemned, it shall again be tested in the same manner after corrective operations are completed, and this string shall stand the required test before compliance with this rule shall have been made.

(b) The producing or oil string shall consist of new or reconditioned pipe with an original mill test of not less than 2000 psi. This string of casing shall be set and cemented at such a point that all oil, gas and water encountered above the producing formation and below the surface casing shall be adequately confined their respective strata. The cement shall be allowed to stand a minimum of 24 hours before drilling the plug or initiating before drilling the plug, a pump pressure of at least 1500 psi shall be applied if at the end of 30 minutes, the pressure shows a drop of 150 psi or more, the casing shall be condemned. In lieu of the foregoing test, the surface casing shall be tested after drilling the plug by bailing the hole dry. The hole shall remain dry for one (1) hour to constitute satisfactory proof of a water shutoff. In event the casing is condemned, it shall again be tested in the same manner after corrective operations are completed, and this string shall stand the required tests before compliance with this rule shall have been made.

IT IS FURTHER PROVIDED, that any operator or operators owning oil and gas leases upon lands contained within the boundaries hereinabove defined and desiring to drill a well or wells thereon shall, by pooling agreement or otherwise, form a 320-acre unit, or units, in conformity with the spacing pattern herein established, provided that the rights of all parties affected hereby to apply to the Commission for the formation of a 320-acre unit or units under the provisions of Chapter 208 of the 1955 Session Laws of the State of Colorado shall not be prejudiced by the entry of this order; and provided that, in the event of the proposed formation of a 320-acre it to conform with the spacing pattern herein established which contains patented lands and Indian lands, if the Department of the Interior fails to approve such unit, then the patented lands therein shall not be affected by the terms and requirements of this order, other than Rule 4 above.

IT IS FURTHER ORDERED, that all wells drilled, and all locations approved by the Commission prior to July 17, 1956, shall be the permitted wells or locations for the respective drilling units.

IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective forthwith, and henceforth the commencement of the drilling of any well or wells in the Mesaverde pool of the Ignacio Field, as defined herein, for the purpose of producing gas therefrom at a location other than authorized by this Order, is hereby prohibited.

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 rules and regulations.

ORDERED this 17th day of July, 1956.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Annabel Hogsett, Secretary