74-1

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" AND "J" SANDS OF THE GRAYLIN FIELD, LOGAN COUNTY, COLORADO

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CAUSE NO. 74

ORDER NO. 74-1

APPEARANCES:

John R. Moran, Attorney - for British-American Oil Producing Company

Sam Freeman, Assistant Attorney General,

A.J. Jersin, Deputy Director, and

D.V. Rogers, Petroleum Engineer - for the Commission

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 24, 1955, at 10:00 a.m., in Room 704 State Capitol Annex, Denver, Colorado, after publication of Notice of Hearing as required by law, on the application of the British-American Oil Producing Company for an order from the Commission establishing Forty (40) acre drilling and spacing units for the production of oil and gas from the "D" and "J" sands, common sources of supply underlying the Graylin Field in Logan County, Colorado, and to permit the commingling of oil produced from both formations in wells drilled in said area.

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 "D" and "J" sand formations constitute common sources of supply of oil and gas underlying the following described lands in Logan County, Colorado, to-wit:

Township 8 North, Range 53 West, 6th P.M.

Section 6: SW/4 SE/4, SE/4 SW/4

Section 7: NW/4, N/2 S/2, S/2 SE/4

and is referred to as the Graylin Field.

4. That in order to prevent waste of oil and gas, as defined in The Oil and Gas Conservation Act, and to prevent the drilling of unnecessary wells, an order should be made establishing Forty (40) acre drilling and spacing units for the production of oil and gas from the "D" and "J" sands, common sources of supply underlying the Graylin Field described above; that said units should be Forty (40) acre drilling and spacing units according to the governmental survey thereof; that the permitted well for each drilling unit should be located not less than Three Hundred Thirty (330) feet from the outside boundary of such Forty (40) acre legal subdivision; and that a tolerance of Fifty (50) feet in any direction from the prescribed location should be permitted to avoid surface hazards and obstructions.

5. That all available geological and engineering data concerning the "D" and "J" sands, common sources of supply underlying said Graylin Field, indicate that one well will efficiently and economically drain an area of approximately Forty (40) acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one well producing from the said "D" and "J" sands, common sources of supply in said Graylin Field.

6. That applicant is the owner of an oil and gas lease which covers, among other lands, the Southwest Quarter of the Southwest Quarter of the Northeast Quarter of Section Seven (7), Township Eight (8) North, Range Fifty-three (53) West of the 6th P.M., Logan County, Colorado, and that it has drilled its Claver No. 1 well in said ten (10) acre tract, and that said well is now producing from the "D" sand formation.

7. That in the drilling of said well, the top of the "D" sand formation was encountered at a depth of Four Thousand Eight Hundred Eighty-three (4883) feet, and the top of the "J" sand formation was encountered at a depth of Four Thousand Nine Hundred Eighty-five (4985) feet, and said well is now producing from the "D" sand formation through casing perforations at a depth of Four Thousand Eight Hundred Eighty-one feet to Four Thousand Eight Hundred Ninety-two feet (4881’ to 4892’); that said well is now capable of producing from the "J" sand formation and from the "D" sand formation; and that the quantities of such production will not justify the drilling of an additional well.

8. That all available geological and engineering data concerning the said Claver No. l well indicate that said well can be dually completed by perforating the casing opposite the "J" sand formation between the approximate depths of Five Thousand and Eight (5008) feet and Five Thousand Fourteen (5014) feet, and to permit the oil from the "J" sand formation and the oil from the "D" sand formation to be commingled in the well bore and to be produced simultaneously.

9. That the granting of petitioner's application and the completion and production of said well in the manner hereinabove described will not result in waste and that no damage will result to either formation because of such dual completion and commingling.

ORDER

NOW, THEREFORE, IT IS ORDERED, the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the "D" and "J" sand formations underlying the Graylin Field, herein described in the Findings which, by reference, are made a part hereof, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. Forty (40) acre drilling and spacing units shall be and the same are hereby established for the production of oil and gas from the "D" and "J" sand formations, common sources of supply underlying:

Southwest Quarter of the Southeast Quarter (SW/4SE/4), and the Southeast Quarter of the Southwest Quarter (SE/4SW/4), Section Six (6); and the Northwest Quarter (NW/4), and West Half of the Northeast Quarter (W/2NE/4), and North Half of the South Half (N/2S/2), and South Half of the Southeast Quarter (S/2SE/4) of Section Seven (7), all in Township Eight (8) North, Range Fifty-three (53) West of the 6th P.M., Logan County, Colorado,

and such area shall henceforth be known as the Graylin Field.

(a) The permitted well for each unit shall be located not less than Three Hundred Thirty (330) feet from the outside boundary of such Forty (40) acre legal subdivision, and that a tolerance of Fifty (40) feet in stay direction from the prescribed location shall be permitted to avoid surface hazards and obstructions.

IT IS FURTHER ORDERED, that the following rules and regulations shall apply hereafter to the Claver No. 1 well located in the Southwest Quarter of the Southwest Quarter of the Northeast Quarter of Section Seven (7), Township Eight (8) North, Range Fifty-three (53) West of the 6th P.M., Logan County, Colorado.

Rule 2(a). That applicant, the British-American Oil Producing Company, is hereby authorized granted the right to dually complete its said Claver No. 1 well by perforating the casing opposite the "J" sand formation between the approximate depths of Five Thousand and Eight (5008) feet and Five Thousand Fourteen (5014) feet, and to permit the oil from the "J" sand formation and the oil from the "D" sand formation to be commingled in the well bore and to be produced simultaneously.

Rule 2(b). That similar dual completions and commingling in one well bore in other wells in the Graylin Field may be approved and authorized by the Commission upon application to said Commission, as provided by the rules and regulations of this Commission.

IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective forthwith, and henceforth commencement of the drilling of stay well or wells in the "D" and "J" sands, as defined herein, for the purpose of producing oil and 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 stay and/or all of the above rules and regulations.

ORDERED this 24th day of August, 1955.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Annabel Hogsett, Secretary