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 BRANDON FIELD, KIOWA COUNTY, COLORADO

)

)

)

)

CAUSE NO. 188

 

ORDER NO. 188-14

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission on July 18, 1972, at 9 a.m., in Room 132, State Services Building, 1525 Sherman Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Inexco Oil Company, for an order approving a Unit Agreement and Unit Operating Agreement, providing for involuntary unit operations of the St. Louis-Spergen reservoir underlying the Brandon Northwest Unit Area, and further to approve a water flood project for secondary recovery purposes and to revise the field rules governing operation in the field as established by Order Nos. 188-1 and 188-6 for the Unit 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 St. Louis-Spergen formation was encountered in the Pyles Well No. 1A, located in the SW¼NW¼ Section 4, Township 19 South, Range 45 West, 6th P.M., Kiowa County, Colorado, between the approximate depths of 4514 feet and 4742 feet sub-surface, has been defined and determined by drilling as underlying the following described lands in Kiowa County, Colorado to-wit:

 

Township 18 South, Range 45 West, 6th P.M.

Section

33:

W½SW¼

 

 

 

Township 19 South, Range 45 West, 6th P.M.

Section

4:

W½

Section 5:  E½E½

 

4.      That the plan for unit operations as submitted by Inexco Oil Company for the area described herein will result in an estimated additional recovery of oil and gas with a value in excess of the estimated additional cost incident to conducting such operations.

 

5.      That testimony presented at the hearing stated that, as of that date, the plan for unit operations has not been approved in writing by the owners of at least eighty percent (80%) of the production or proceeds attributable to royalty, overriding royalty, and production payments.

 

6.      That the order approving the unit plan of operations should not become effective unless or until the persons owning the required percentage of interest in the Unit Area approve said plan.

 

7.      That within a period of six months from the date of this order and upon application by Inexco Oil Company, the Commission should hold a hearing to determine whether approval from the required percentage of interest, for the plan for unit operations, has been obtained; however, in the event such approval has not been obtained within this period of time, the approval of the Commission for the plan of unit operations would be ineffective and be revoked.

 

8.      That the provisions of Order No. 188-2 and subsequent Order No. 188-6, establishing 80-acre drilling and spacing units, will be inconsistent and incompatible with unit operations and should be rescinded for the Unit Area.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED:

 

1.      The plan for unit operation covering lands in the Brandon Northwest Unit Area, is approved as being in the public interest for conservation.

 

2.      The St. Louis. Spergen formation reservoir, common source of supply, underlies the following described lands in Kiowa County, Colorado, to-wit:

 

Township 18 South, Range 45 West, 6th P.M.

Section

33:

W½SW¼

 

 

 

Township 19 South, Range 45 West, 6th P.M.

Section

4:

W½

Section 5:  E½E½

 

and such area shall hereafter be known as the Brandon Northwest Unit Area.

 

3.      The provisions contained in the Unit Agreement and Unit Operating Agreement as they pertain to:

 

a.      The description of the pool to be so operated;

 

b.      The nature of said operation;

 

c.      The allocation to the separately owned tracts in the Brandon Northwest Unit Area of all the oil and gas that is produced from said Unit Area and is saved;

 

d.      The provision for the credits and charges to be made in the adjustment among the owners in the Brandon Northwest Unit Area for their respective investments in wells, tanks, pumps, machinery, materials, and equipment contributed to the Unit operations;

 

e.      The provision providing how the costs of Unit operations, including capital investments, shall be determined and charged to the separately owned tracts, and how said costs shall be paid, including the provision providing when, how, and by whom the Unit production allocated to an owner who does not pay the share of the cost of Unit operations charged to such owner, or the interest of such owners, may be sold and the proceeds applied to the payment of such costs.

 

f.       The provision for the supervision and conduct of the Unit operations, in respect to which each person shall nave a vote with a value corresponding to the percentage of the costs of Unit operations chargeable against the interest of such person; and

 

g.      The time when the Unit operations shall commence, and the manner in which, and the circumstances under which the Unit operations shall terminate, are just and reasonable, and are incorporated herein as the Commission's plan of involuntary unit operations for such lands.

 

4.      The waterflood project for the St. Louis-Spergen reservoir of the Brandon Northwest Unit Area, as presented by Applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject water into said reservoir through injection wells in such quantities as shall be reasonably determined by the operator to best achieve the maximum recovery of oil without waste.

 

5.      In the event that it becomes necessary in the future to convert additional producing wells to input wells, to plug and abandon certain wells in the Unit Area, or to drill additional producing or input wells as dictated by developments in the course of the operation of the-waterflood, the Unit Operator is authorized to make such changes in the operation of the project as may be required to facilitate the efficient development thereof, subject to the approval of the Director.

 

6.      That the provisions of Order Nos. 188-1 and 188-6 are hereby rescinded for that Unit Area as described in Paragraph 2 of this order.

 

IT IS FURTHER ORDERED, that this Order shall hot become effective unless, or until the persons owning the required percentage of interest in the unit approve the plan of Unit operations.

 

IT IS FURTHER ORDERED, that within a period of six (6) months from the date of this Order, and upon application by Inexco Oil Company, the Commission shall hold a hearing to determine whether the approval of the required percentage of interest for the plan of Unit operations has been obtained.  In the event such approval has not been obtained within this period of time, the approval of the Commission for the plan of Unit operations shall become ineffective and this Order shall be revoked.

 

ORDERED this 11th day of August, 1972.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By 

Frank J. Piro, Secretary