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BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE "J" SAND OF THE BEALL CREEK FIELD, LOGAN COUNTY, COLORADO |
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CAUSE NO. 89
ORDER NO. 89-4 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on January 23, 1957, at 10:00 a.m., in the Colorado Room of the Shirley-Savoy Hotel, Denver, Colorado, after publication of Notice of Hearing as required by law, on the Commission's own motion to consider measures to prevent waste of oil and gas in the "J" sand reservoir of the Beall Creek Field, Logan County, Colorado, and to accept testimony and engineering data relating thereto. The basic engineering data of the "J" sand reservoir of the Beall Creek Field was presented by the British-American Oil Producing Company, and was agreed to by the Skelly Oil Company, the Shell Oil Company, and Patrick A. Doheny.
All parties agreed that there is an effective water drive in the field, and that there is some drainage across lease lines presently occurring. The differences of opinion were centered on whether the present unrestricted production in the field was causing channeling or fingering of water, which would cause a bypassing of oil in the reservoir and thereby reduce the ultimate recovery of oil, and whether the drainage of oil across lease lines was reasonably avoidable.
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 "J" sand constitutes a common source of supply of oil and gas underlying portions of Sections 23, 24, 25 and 26, Township 10 North, Range 53 West, 6th P.M., Logan County, Colorado, which is referred to as the Beall Creek Field.
4. That there is an effective water drive in the "J" sand reservoir of the Beall Creek Field.
5. That to prevent waste and protect correlative rights of all owners in the Beall Creek Field, it is necessary to limit the total volume of oil to an amount less than that amount which said pool could produce if no restriction were imposed.
6. That the following formula will allocate the allowable production of oil among the several producing properties in said pool on a reasonable basis, preventing or minimizing reasonably avoidable drainage, so that each property will have the opportunity to produce or to receive its just and equitable share, subject to the reasonable necessities for the prevention of waste:
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Lease Daily Oil Allowable = 1500 x |
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a = |
acre feet of net oil pay in developed drilling unit. |
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b = |
acre feet of net oil pay in undeveloped offset drilling units on common lease. |
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A = |
field total of (a) above. |
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B = |
field total of (b) above. |
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Lease daily oil allowables should be presented on an Oil Allowable Schedule prepared and issued by the Commission for the Beall Creek Field based on the net oil pay isopach map, Exhibit 3-2, submitted at the hearing and agreed to by all operators.
7. That in approximately six (6) months, or earlier if deemed necessary, the Commission should hold another hearing in this matter to review additional pertinent information available at that time.
ORDER
NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations be, and the same are hereby adopted for the "J" sand reservoir of the Beall Creek Field in Logan County, Colorado:
Rule 1. Production Limitation.
a. That in order to prevent waste and protect correlative rights of all owners of wells capable of producing oil from the "J" sand reservoir of the Beall Creek Field; and in order to allow each property the opportunity to receive its just and equitable share of the total field production, each property is given a daily oil allowable according to the following formula:
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Lease Daily Oil Allowable = 1500 x |
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a = |
acre feet of net oil pay in developed drilling unit. |
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b = |
acre feet of net oil pay in undeveloped offset drilling units on common lease. |
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A = |
field total of (a) above. |
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B = |
field total of (b) above. |
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Current lease daily oil allowables are presented on an Oil Allowable Schedule for the Beall Creek Field, and such schedule is subject to revision only after additional development of the "J" sand reservoir of the Beall Creek Field. All operators will be invited to all meetings held for recalculating any oil allowable.
b. Lease daily oil allowables shall be divided between all producing wells located on a common lease as equally as is practicable.
c. Under and over production of oil shall be adjusted on a monthly basis. Underproduction of oil during any one month may be made up only during the month immediately following, and any overproduction of oil obtained during any one month shall be made up during the month immediately following. Any overproduction of oil in excess of ten percent (10%) of the total monthly allowable shall be considered a violation, unless a valid reason is given. The production of oil in excess of twice the lease daily oil allowable during any one day shall be considered a violation.
Rule 2. Gas-Oil and Water-Oil Ratio Tests.
That operators and owners of wells producing from the "J" sand reservoir of the Beall Creek Field shall make gas-oil and water-oil ratio tests of each of their producing wells during every month, and such tests shall be taken during the last ten (10) days of each month, the results of which such tests shall be reported to the Commission no later than the tenth day of the following month; and that each such 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 the volume of water measured during said last twenty-four (24) hours shall be the amount of water reported on the test. A schedule shall be submitted to the Commission and to offset operators prior to testing, showing the wells and respective dates of testing. Volumes 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 3. Bottom-Hole Pressure Survey.
Reservoir pressure surveys necessary for reservoir studies will be prescribed as set forth in Rule 330 of the State-wide Rules and Regulations.
Rule 4. Production Reports.
That operators and owners of wells producing from the "J" sand reservoir shall file with the Commission the production of oil, water and gas by wells on monthly production reports required by this office.
IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective Wednesday, February 13, 1957, at 12:00 o'clock noon.
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 6th day of February, 1957.
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OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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By Annabel Hogsett, Secretary |