ORDER NO. 77-3




This cause came on for hearing before the Commission on January 28, 1958, at 10:00 a.m., in the Game Room of the Albany Hotel, Denver, Colorado, after publication of Notice of Hearing as required by law, on the application of the Monsanto Chemical Company for an order amending the provisions of Order No. 77-2 dated March 29, 1957, so as to permit the daily gas allowable to be averaged over a twelve-month period, with appropriate provisions permitting production of larger quantities of gas during the colder months, and compensating production of lesser quantities of gas during the warmer months.


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 more gas can be produced without waste during periods of cold weather than during periods of hot weather.

4.      That in order to recognize seasonal variations, and to better prevent waste, Order No. 77-2 should be amended to allow greater flexibility in the allowable rate of production from gas wells.


NOW, THEREFORE, IT IS ORDERED, that Order No. 77-2 is hereby amended, and the following rules and regulations shall hereafter apply to the "D" sand formation of the Beacon Field, Adams County, Colorado:

Rule 1.    In order to prevent undue waste of oil and gas, and to prevent the escaping, blowing and releasing of gas in an excessive or unreasonable amount from wells producing both oil and gas, and to prevent underground waste, inefficient, excessive and improper use and dissipation of reservoir energy, the daily allowable "D" sand production from any one forty-acre tract located in the Beacon Field shall be One Hundred Twenty-five (125) barrels of oil, or Two Hundred Thousand (200,000) cubic feet of gas, whichever is produced first; and when any well reaches a gas-oil ratio of Twenty Thousand to One (20,000 to 1), such well shall be classified as a gas well.

a.      No oil well shall produce during any twenty-four (24) hour period more than twice its daily allowable, unless otherwise authorized.  In recognition of the difficulty of producing the allowable to the exact number of barrels, the allowable production may be exceeded for any one month by not in excess of three days [sic] allowable production, provided that any such excess production shall be deducted in producing the next month’s allowable.  Any underproduction may be produced only during the month immediately following that in which the underproduction occurred.

b.      All gas wells shall be shut in pending a gas market, and upon completion of facilities for said gas market, the maximum production of gas from any one forty-acre tract shall not exceed a daily average of Two Hundred Thousand (200,000) cubic feet of gas, which may be produced in the following manner:

(1)     Six-month allowable periods are hereby established for the purpose of balancing or averaging the rate of daily gas production from each gas well producing from the "D" sand in the Beacon Field, the first period beginning at 7:00 a.m. on March 1 and ending at 7:00 a.m. on September 1; and the second period beginning at 7:00 a.m. on September 1 and ending at 7:00 a.m. on March 1 each year;

(2)     The daily "D" sand allowable production from each gas well in said pool, as heretofore prescribed by Order No. 77-2, may be exceeded, on any day or days during each six-month balancing period but shall not during any such six-month period, exceed such daily allowable heretofore prescribed for such well multiplied by the number of days included in such six-month period, which total allowable is herein referred to as "current allowable" for each six-month period.  It is provided, however, that any overproduction and underproduction of current allowable occurring in any such six-month allowable period shall be adjusted and carried to the extent herein provided;

(3)     For the purpose of computing and balancing overproduction and underproduction of gas wells in sand pool, March 1 and September 1 at 7:00 a.m. are designated as "balancing dates", and each six-month balancing period shall be considered as a separate entity.  No gas well in said pool shall produce during any balancing period more than its current allowable for such period plus the amount of underproduction, if any, of current allowable, occurring during the preceding six-month period.  In the event a gas well fails to produce its current allowable during a balancing period, the underproduction of such current allowable occurring during such period may be carried forward to and produced during the next ensuing six-month period, in addition to the current allowable for such ensuing period.  All gas produced from such gas well during said ensuing period shall be attributed primarily to the current allowable for said ensuing period, and any gas production from the well in excess of such current allowable shall be attributed to makeup of underage, if any, of current allowable for the preceding six-month period, to the extent of such underage.  Any underage in current allowable for a gas well during any six-month balancing period which is not produced during the next succeeding balancing period shall be cancelled at the end of such succeeding period.

(4)     Overproduction from a gas well occurring during a balancing period shall be subtracted from the overproducing gas well’s allowable for the next balancing period.  Any gas well overproduced as of a balancing date, and which well was also overproduced on the balancing date immediately preceding and remained overproduced for the entire period between the balancing dates, shall be shut in until the cumulative overproduction existing on the latter of such two balancing dates is made up.

Except where a well is required to be shut in due to overproduction as above provided, the overproduction existing as of any balancing date shall be made up during the balancing period immediately following, and may be made up at any time during such period.

Rule 2.    When there is a gas market, and until otherwise authorized, the operators and owners of all wells producing oil or gas, or both oil and gas from the "D" sand formation of the Beacon Field, shall not produce gas from any one well unless:


The gas so produced is marketed to supply domestic or municipal needs; or




The gas so produced is required for lease development or operations and fuel.

Rule 3.    The operators and owners of wells producing from the "D" sand formation of the Beacon Field shall make a gas-oil-ratio test of each of their producing oil wells during every quarter, beginning with the months of January, April, July and October, unless otherwise authorized; and such tests shall be taken during the first fifteen (15) days of the last month of each quarter, the results of which such tests shall be reported to the Commission on or before the twenty-fifth (25th) day of the last month of every quarter; and such tests shall be the basis for calculating the volume of oil or gas allowed to be produced and immediately prior to making the test for a gas-oil ratio, subject well shall be produced in its normal manner for at least twenty-four (24) hours; and during such tests, subject well shall be produced at a volume equal to or not exceeding its daily allowable by more than twenty-five (25) percent, if capable; and a schedule shall be submitted to the office of the Commission and offset operators prior to testing, showing the wells and respective dates of tests; and 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.

Rule 4.    The operators and owners of wells producing from the "D" sand formation of the Beacon Field shall file with the Commission a monthly report of production by wells, as required on Form OGCC-7a, covering the month next preceding the date of filing, on or before the twenty-fifth (25th) day of each month, unless otherwise authorized by the Commission.

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 28th day of January, 1958.




By  Annabel Hogsett, Secretary