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 RANGELY FIELD IN THE STATE OF COLORADO	) ) ) )	CAUSE NO. 2 ORDER NO. 2-24

REPORT OF THE COMMISSION

The Commission feels that the people of the State of Colorado are entitled to have their natural resources protected against waste. The Commission further believes that, within the limitations of its statutory power, it is obligated to do its utmost to protect those resources. To that end, the Commission is under statutory direction to prohibit the escaping, blowing or releasing, directly or indirectly, of gas in an excessive or unreasonable amount from wells producing oil and gas. This duty of the Commission was clearly and unmistakably emphasized by the Colorado Supreme Court.

The Commission held a formal hearing with the operators of the Rangely Field on July 14, 1955. Prior to that time, the operators were requested to present to the Commission evidence to aid the Commission in formulating new rules and regulations for the governing of oil and gas production in the Rangely Field in accordance with the decision of the Colorado Supreme Court and the Oil and Gas Conservation Act. The Commission has examined all the evidence submitted by the operators, and considered the testimony presented at previous hearings, and has utilized records and reports on file at the Commission's office, and has reached the conclusion that the flaring of more than Thirty Thousand (30,000) cubic feet of gas per well per day is excessive and unreasonable.

Further, an examination of the evidence in regard to the oil production of the Rangely Field confirms the Commission's opinion that uncontrolled production of oil is leading to a serious drainage problem which, in turn, is violating the correlative rights of certain of the operators and causing waste. The Commission feels that a top limitation of Two Hundred Seventy-Five (275) barrels of oil per well per day will largely correct this drainage situation and prevent waste, and at the same time will not materially reduce the field's production.

FINDINGS

The Commission finds as follows:

1.      That due notice of the time, place and purpose of the hearing in this matter was given in all respects as required by law.

2.      That the Commission has jurisdiction over the subject matter embraced in said notices, and of the parties interested therein, and jurisdiction to promulgate the following prescribed order.

3.      That the flaring of more than Thirty Thousand (30,000) cubic feet of gas per well per day is excessive and unreasonable.

(a)     That the total amount of gas produced from the Weber Reservoir of the Rangely Field to July 1, 1955, is approximately One Hundred Eleven Billion Four Hundred Million (111,400,000,000) cubic feet.

(b)     That at least Thirty Billion (30,000,000,000) cubic feet of gas has been wasted by the operators in producing from the Weber Reservoir of the Rangely Field.

(c)     That about one-half of the oil and gas recoverable under primary methods has been produced.

(d)     That under present operating conditions, if there were no restrictions on the flaring of gas, approximately Eighty-Five Million (85,000,000) cubic feet of gas per day might be flared, which is an unreasonable flare.

(e)     That no plan or agreement to prevent or substantially reduce such unreasonable flare has been presented to or approved by the Commission under the provisions of Section 100-6-16 of the Oil and Gas Conservation Act.

4.      That Two Hundred Seventy-Five (275) barrels of oil per well per day should be the top limitation of oil production for the field.

         (a)     That unlimited production of oil will cause unreasonable drainage and waste.

         (b)     That unlimited production of oil will abuse and violate the correlative rights of certain owners and operators.

         (c)     That the purpose of limiting the production of oil per well per day is to prevent waste and protect the correlative rights of owners and operators, as defined by the statute.

         (d)     That unlimited oil production may decrease the amount of oil recoverable under primary production methods.

         (e)     That the top oil allowable per well per day fixed by the Commission will not materially affect the established rate of oil production from the field.

ORDER

NOW, THEREFORE, IT IS ORDERED that the provisions of Order No. 2-23 shall remain in effect for thirty (30) days, and that effective thirty (30) days from the date hereof, the following rules and regulations be, and the same are, hereby adopted for the Weber Reservoir of the Rangely Field in Rio Blanco County, Colorado:

Rule 1.  That in order to prevent the blowing and releasing, directly or indirectly, into the open air of an unreasonable and excessive amount of gas, and to protect the reasonable use of gas for oil production, the maximum blowing and releasing, directly or indirectly, of gas attributable to any one well producing from the Weber Reservoir shall not, during any one month, exceed a daily average of Thirty Thousand (30,000) cubic feet, provided that, in order to protect correlative rights of all producers or owners in the Weber Reservoir from non-uniform, disproportionate, unratable, or excessive withdrawals of oil or gas therefrom, causing reasonably avoidable drainage between tracts of land or resulting in one or more producer or owner in such pool producing more than his just and equitable share of oil or gas, the maximum production of oil from any one well producing from the Weber Reservoir, during any one month, shall not exceed a daily average of Two Hundred Seventy-Five (275) barrels.

IT IS FURTHER ORDERED, that in order to properly enforce Rule 1, as hereinabove stated, the following rules are hereby promulgated by the Commission:

Rule 2.  GAS-OIL-RATIO TESTS

(a)     Tests for a gas-oil ratio shall be made monthly on each well in the field. Form OGCC-4 shall be completed and filed with the Commission by the 25th day of a given month to report results of tests taken the preceding month. Such testing requirements for certain wells may be waived by the Director upon review of a request for exemption or adjustment.

(b)     Immediately prior to making the test for a gas-oil ratio, the well to be tested shall be produced at its normal rate of production for at least 72 consecutive hours, and the test shall be for a period of 24 consecutive hours, and the gas-oil ratio computed on the basis of the measurement of oil and gas during this 24-hour period.

(c)     Each producing well shall be so equipped that gas-oil ratio tests may be made in accordance with standard practice. All gas measurements shall be reported in cubic feet at a base pressure of 15.025 psia and a temperature of 60° Fahrenheit.

(d) The monthly Well Testing Report prepared by the Rangely Engineering Committee will satisfy this requirement, provided that all testing detail required on Form OGCC-4 is shown and figures submitted for an operator are verified by a written statement by the respective operator.

Rule 3.  REPORTS OF OIL AND GAS PRODUCTION

(a)     Oil, gas and water production and a detailed accounting of the disposition of produced gas by wells shall be reported by the operator of each lease, by the twenty-fifth (25th) day of a given month for the preceding month. Such well production and disposition may be estimated by breaking down actual battery production and disposition on the basis of the production obtained during the gas-oil-ratio tests herein required. The monthly production report now prepared by the Rangely Engineering Committee will satisfy this requirement, provided that the disposition of gas is shown by wells for each battery and lease, and figures submitted for an operator are verified by letter by the respective operator.

(b)     Actual oil runs by batteries for each lease in the field shall be reported by the transporter of the oil by the twenty-fifth (25th) day of a given month for the preceding month, on a form provided by the Commission, Form OGCC-5.

(c)     Actual gas production by meter stations for each lease in the field shall be reported by the plant operator by the twenty-fifth (25th) day of a given month for the preceding month, on a form provided by the Commission, Form OGCC-6.

IT IS FURTHER ORDERED, that Rules 3, 4 and 5 of Order No. 2-8; Order No. 2-13; and all orders, rules and regulations in conflict herewith, are hereby rescinded.

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 16th day of September, 1955.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
	By  Annabel Hogsett, Secretary