66-4

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE INVESTIGATION TO TAKE MEASURES TO PREVENT WASTE OF OIL AND GAS IN THE "D" SAND OF THE CLIFF FIELD, LOGAN COUNTY, COLORADO

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CAUSE NO. 66

ORDER NO. 66-4

REPORT OF THE COMMISSION

This Cause came on for hearing before the Commission on January 24, 1956, at 10:00 A.M., in Room 330 State Office Building, Denver, Colorado, on the Commission's own motion, to consider an order for the operation of the "D" sand of the Cliff Field.

At the hearing, the British-American Oil Producing Company proposed that the Con-mission's order should place a gas allowable in the field of 300,000 cubic feet per well per day, on a lease basis. The other operators concurred with British American's proposal in regard to the gas allowable, but requested in addition that the Commission place an oil allowable in the field of 200 barrels per well per day, on a lease basis.

In view of the fact that the operators and the Commission were of the opinion that the gas allowable recommendation was fair and reasonable, the issue narrowed down to whether or not it was necessary and proper for an oil allowable to be established in the field in order to promote and effectuate good conservation, in accordance with the conservation laws of the State. The Commission, after hearing all the evidence and reviewing the reports and records on file in the Commission's office, makes the following findings.

FINDINGS

The Commission finds as follows:

1. That due notice of the time, place and purpose of the hearing in this matter was 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 following described order.

3. That evidence, exhibits, representations and recommendations made at the January 24th hearing in this cause, and records in the office of the Commission relating to the Cliff Field indicate that wells producing with a gas-oil ratio of over 1500 cubic feet of gas per barrel of oil are producing oil and gas inefficiently, and that a limitation of 200 barrels of oil and 300,000 cubic feet of gas per well per day is necessary to prevent unreasonable reduction of reservoir pressure, inefficient, excessive and improper dissipation of reservoir energy, unreasonable diminution of the quantity of oil that might ultimately be produced, and abuse of correlative rights due to a non-uniform, disproportionate, unratable or excessive withdrawal of oil or gas, causing reasonably avoid-able drainage between tracts of land resulting from one or more operators or owners producing more than his just and equitable share of oil or gas from the "D" sand pool.

4. The total daily oil allowable for a given lease should be the sum of the daily oil allowables of the producible wells on a given lease. The daily oil allowable for any one well should be the maximum amount of oil it is capable of producing as determined by the tests required by Rule 2 hereof, not to exceed 200 barrels; provided, however, that wells which have a gas-oil ratio in excess of 1500 cubic feet of gas per barrel of oil should be granted an oil allowable as determined by the following formula, not to exceed the oil capacity of such a well as determined by tests required in Rule 2 hereof:

Daily oil allowable =	300,000 cubic feet of gas
	gas-oil ratio of well

In order that the operators may produce any one lease in the most efficient manner possible, the oil 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 the same lease, provided that such a transfer will result in the production of less gas.

Under and over production of oil should be adjusted on a quarterly basis. A quarter as used herein should mean any three consecutive months of a year, beginning with the months of January, April, July and October. Underproduction of oil during any one quarter may be made up only during the quarter immediately following, and any overproduction of oil obtained during any one quarter should be made up during the quarter immediately following. All operators should produce their wells as efficiently as is practicable, and any overproduction of oil in excess of five (5) percent of the total quarterly lease allowable should be considered a violation of this order, unless a valid reason is given.

4. That operators and owners of wells producing from the "D" sand formation of the Cliff Field should make a gas-oil-ratio test of each of his producing wells during every quarter, and that such tests should be taken during the first twenty (20) days of the last month of each quarter, the results of which such tests should be reported to the Commission on Form OGCC-4 on or before the twentieth (20th) day of the last month of each quarter; and that such tests should be the basis for calculating the volume of oil allowed to be produced for the following quarter; and that subject well should be produced at its normal stabilized rate of production for a period of forty-eight (48) consecutive hours; and that the gas-oil ratio should be computed on the basis of the measurement of oil and gas drilling the last twenty-four (24) hours of said period; and that a schedule should be submitted to the Commission and to offset operators prior to testing, showing the wells and respective dates of tests; and that the volume of gas measured should be reported in units of cubic feet at a base pressure of 15.025 psia, and a base temperature of 60° Fahrenheit.

5. That datum reservoir pressure of certain key wells in the field should be determined semi-annually during the first fifteen (15) days of January and July, and that the key wells should be selected by the operators with the approval of the Commission; and that the results of each such semi-annual test should be reported by the operator to the Commission on or before the twenty-fifth (25th) day of each test month; and that all pressure determinations should be made at a datum of Nine Hundred Fifty (950) feet below sea level; and that all wells in the field should be shut in twenty-four (24) hours prior to testing and should remain shut in until completion of the survey.

6. That operators and owners of wells producing from the "D" sand reservoir should file with the Commission a monthly report of production by wells, as required on a form prescribed by the Commission, covering the month next preceding the date of filing, on or before the twentieth (20th) day of each month.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations be, and the same are hereby adopted for the “D” sand formation of the Cliff Field in Logan County, Colorado:

Rule 1. Production Limitation.

(a) The total daily oil allowable for a given lease shall be the sum of the daily oil allowables of the producible wells on a given lease. The daily oil allowable for any one well shall be the maximum amount of oil it is capable of producing as determined by the tests required by Rule 2 hereof, not to exceed Two Hundred (200) barrels; provided, however, that wells which have a gas-oil ratio in excess of Fifteen Hundred (1500) cubic feet of gas per barrel of oil shall be granted an oil allowable as determined by the following formula, not to exceed the oil capacity of such a well as determined by tests required in Rule 2 hereof:

Daily oil allowable =	300,000 cubic feet of gas
	gas-oil ratio of well

(b) In order that the operators may produce any one lease in the most efficient manner possible, the oil 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 the same lease, provided that such a transfer will result in the production of less gas.

(c) Under and over production of oil shall be adjusted on a quarterly basis. A quarter as used herein shall mean any three consecutive months of a year, beginning with the months of January, April, July and October. Underproduction of oil during any one quarter may be made up only during the quarter immediately following, and any overproduction of oil obtained during any one quarter shall be made up during the quarter immediately following. All operators shall produce their wells as efficiently as is practicable, and any overproduction of oil in excess of five (5) percent of the total quarterly lease allowable shall be considered a violation of this Order, unless a valid reason is given.

Rule 2. Gas-Oil-Ratio Tests.

(a) That operators and owners of wells producing from the "D" sand formation of the Cliff Field shall make a gas-oil-ratio test of each of his producing wells during every quarter, and that such tests shall be taken during the first twenty (20) days of the last month of each quarter, the results of which such tests shall be reported to the Commission on Form OGCC-4 on or before the twentieth (20th) day of the last month of every quarter; and that such tests shall be the basis for calculating the volume of oil allowed to be produced for the following quarter; and that subject well shall be produced at its normal stabilized rate of production for a period of forty-eight (48) consecutive hours; and that the gas-oil ratio shall be computed on the basis of the measurement of oil and gas during the last twenty-four (24) hours of said period; and that a schedule shall be submitted to the Commission and to offset operators prior to testing, showing the wells and respective dates of tests; and that 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° Fahrenheit.

(b) That any operator may apply for an amended or additional allowable upon submission of an authorized test or retest.

Rule 3. That datum reservoir pressure of certain key wells in the field shall be determined semi-annually during the first fifteen (15) days of January and July; and that the key wells shall be selected by the operators with the approval of the Commission; and that the results of each such semi-annual test shall be reported by the operator to the Commission on or before the twenty-fifth (25th) day of each test month; and that all pressure determinations shall be made at a datum of Nine Hundred Fifty (950) feet below sea level; and that all wells in the field shall be shut in twenty-four (24) hours prior to testing and shall remain shut in until completion of the survey.

Rule 4. That operators and owners of wells producing from the "D" sand reservoir shall file with the Commission a monthly report of production by wells, as required on a form prescribed by the Commission, covering the month next preceding the date of filing, on or before the twentieth (20th) day of each month.

IT IS FURTHER ORDERED, that this Order shall become effective March 1, 1956, at which date Order No. 66-3 shall be repealed.

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 16th day of February, 1956.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Annabel Hogsett, Secretary