129-1

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 DIKE FIELD, MORGAN COUNTY, COLORADO

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CAUSE NO. 129

ORDER NO. 129-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 30, 1959, at 10 a.m., in the Spruce Room of the Albany Hotel, Denver, Colorado, after publication of Notice of Hearing as required by law, on the Commission's own motion to consider measures to prevent the waste of oil and gas in the "D" sand underlying the Dike Field, Morgan County, Colorado.

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" sand formation of the Dike Field, as used herein, contains an oil reservoir, a portion of which is overlain by a gas cap; and that said "D" sand formation constitutes a common source of supply of oil and gas underlying the following described lands in Morgan County, Colorado, to-wit:

Township 5 North, Range 60 West, 6th P.M.

Section 32: SE¼	Section 33: SW¼

4. That in order to prevent waste, and to prevent the drilling of unnecessary wells, an order should be made establishing drilling and spacing units consisting of approximately forty (40) acres according to the governmental survey thereof, for the production of oil from the "D" sand formation; and that the permitted well for each such drilling unit should be located in the center of each quarter-quarter section in the governmental survey; and that a tolerance of 100 feet in any direction from the prescribed location should be permitted to avoid surface hazards and obstructions; and that no intention to drill a well should be approved until all owners of interest within a given drilling and spacing unit have pooled their interests.

5. That in order to prevent waste, and to prevent the drilling of unnecessary wells, an order should be made establishing a drilling and spacing unit consisting of approximately 160 acres, according to the governmental survey thereof, for the production of gas from the "D" sand formation; and that said unit should be the SW¼ of Section 33, Township 5 North, Range 60 West; and that the Pexoil Company's No. 1 Lefforge gas well should be the allowed well for said unit; and that a gas well, as used herein, should mean any well which has a producing gas-oil ratio of 20,000 cubic feet per barrel, or greater.

6. That in order to prevent waste, as defined by the Oil and Gas Conservation Act, the gas produced from the Dike Field should be either (1) marketed and sold to supply domestic, industrial, commercial or municipal needs; or (2) used for lease fuel, development or operations; or (3) returned to the "D" sand formation.

7. That quarterly capacity and gas-oil-ratio tests and annual bottom-hole-pressure surveys should be conducted.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed or recompleted in the "D" sand formation underlying the Dike Field herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1. Approximately Forty (40) acre drilling and spacing units for the production of oil shall be and the same are hereby established for the "D" sand formation underlying the following described lands in Morgan County, Colorado, to-wit:

Southeast Quarter (SE¼) of Section Thirty-two (32), and the Southwest Quarter (SW¼) of Section Thirty-three (33), Township Five (5) North, Range Sixty (60) West of the 6th P.M.,

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

Rule 2. Said units shall consist of approximately forty (40) acres and the permitted well for each such drilling unit shall be located in the center of each quarter-quarter section in the governmental survey, and a tolerance of One Hundred (100) feet in any direction from the prescribed location shall be permitted to avoid surface hazards and obstructions; and no intention to drill a well shall be approved until all owners of interest within a given drilling and spacing unit have pooled their interests.

Rule 3. One drilling and spacing unit consisting of approximately One Hundred Sixty (160) acres, according to the governmental survey, is hereby established for the production of gas in the "D" sand formation, said unit to consist of the Southwest Quarter (SW¼) of Section Thirty-three (33), Township Five (5) North, Range Sixty (60) West of the 6th P.M., in Morgan County, Colorado; and the Pexoil Company’s No. 1 Lefforge gas well shall be the allowed well for said unit; and a gas well, as used herein shall mean any well which has a producing gas-oil ratio of Twenty Thousand (20,000) cubic feet per barrel, or greater.

Rule 4. Gas produced from said "D" sand formation of the Dike Field shall be either (1) marketed and sold to supply domestic, industrial, commercial, or municipal needs; or (2) used for lease fuel, development or operations; or (3) returned to the "D" sand formation, unless otherwise authorized by the Commission.

Rule 5. Operators and owners of wells capable of producing from the "D" sand formation of the Dike Field, as herein defined, shall make a quarterly gas-oil-ratio test of each of his producible wells. Such tests shall be taken during the first fifteen (15) days of the last month of each quarter, and the results of such tests shall be submitted to the Commission on or before the 25th day of said month. Each well shall be produced at its normal stabilized rate for a period of forty-eight (48)consecutive [sic] hours, and 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 forty-eight (48) hour period. 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. 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 6. A determination of datum reservoir pressure shall be made during the month of September of each year, such tests to be conducted during the first fifteen (15) days of a test month. All wells capable of producing from said "D" sand formation shall be shut in and shall remain shut in until completion of the survey. Datum reservoir pressure shall be determined after the entire field has been shut in for a period of at least twenty-four (24) hours, and such pressure shall be measured at a datum of Seventeen Hundred Twenty (1720) feet below sea level. The results of said survey shall be reported to the Commission on or before the 25th day of said test month.

Rule 7. Operators and owners of wells producing from the "D" sand formation shall file with the Commission a monthly report of production by wells, showing the number of days produced, covering the month next preceding the date of filing, on or before the twenty-fifth (25th) day of each month.

IT IS FURTHER ORDERED, that the provisions of this order shall apply to all operators and owners of wells capable of producing from the "D" sand formation underlying the Dike Field, and shall remain in effect unless otherwise authorized by the Commission.

IT IS FURTHER ORDERED, that this order shall become effective forthwith.

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 6th day of May, 1959.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Annabel Hogsett, Secretary