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 PEORIA FIELD, ARAPAHOE COUNTY, COLORADO	) ) ) )	CAUSE NO. 226 ORDER NO. 226-16

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 18, 1972 at 2 p.m., in Room 132, State Services Building, Denver, Colorado, as the result of Order No. 226-15 (Emergency) which granted temporary relief from production limitations as established by Order No. 226-9, in order to allow the operator of the Peoria Gas Processing Plant which has been expanded, to load the plant with gas from the Peoria Field, as well as the Peoria North, Latigo, Hombre and Poncho Fields, and further ordered the operators in the fields to present all available production and test data in order for the Commission to determine field rules for production of oil and gas and to consider long range plans for allocation of gas to the expanded Peoria Gas Processing Plant.

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 Commission by its Order No. 226-9 in order to prevent waste, limited the gas production of the "J" Sand reservoir of the Peoria Field to 8,000 Mcf per day which was, at that time, the capacity of the Peoria Gas Processing Plant.

4.      That the Peoria Gas Processing Plant has been expanded to handle approximately 16,000 [sic] Mcf of gas per day and the Commission by its Order No, 226-15 (Emergency) granted temporary relief from the limitations placed on production from the Peoria Field by Order No. 226-9 in order to allow the operator to load and test the design capabilities of the expanded plant.

5.      That with the completion of the expansion of the Peoria Gas Processing Plant, the plant nomination should be allocated among the Hombre, Latigo, Peoria, Peoria North and Poncho Fields, in Adams and Arapahoe Counties, Colorado, and that 8, 000 [sic] to 10, 000 [sic] Mcf of gas per day is a reasonable allocation of the plant capacity for the Peoria Field.

6.      That the transfer of allowables within a given lease will generally promote efficient production practices, but unlimited production from individual wells can result in pressure sinks and the abuse of correlative rights with disproportionate withdrawals causing otherwise avoidable drainage between separately owned tracts, therefore, a limitation should be placed on the amount of oil allowed to be produced from any one well due to a transfer of gas allowables.

7.      That the operators and owners of wells producing from the "J" Sand of the Peoria Field should make a gas-oil ratio test of each producing well monthly and each shut-in well quarterly and should file with the Commission a monthly report of production of oil by wells and gas by leases, as required on Form OGCC-7, unless otherwise authorized by the Commission.

8.      That a hearing should be held in six months to review the plans concerning the allocation of gas to said expanded plant.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulation shall be, and the same are hereby adopted for the "J" Sand, common source of supply of oil and gas, of the Peoria Field, Arapahoe County, Colorado, underlying the following described lands:

Township 4 South, Range 60 West, 6th P.M.
Section	19:	All	Section	29:		All
Section	20:	All	Section	30:		All
Section	21:	All	Section	31:		All
Section	22:	S½	Section	32:		All
Section	27:	All	Section	33:		All
Section	28:	All	Section	34:		All
Township 4 South, Range 61 West, 6th P.M.
Section	24:	All	Section	36:		All
Section	25:	All
Township 5 South, Range 60 West, 6th P.M.
Section	3:	All	Section	8:	All
Section	4:	All	Section	9:	All
Section	5:	All	Section	10:	All
Section	6:	All
Township 5 South, Range 61 West, 6th P.M.
Section	1:	All

Rule 1.    Production Limitation

               a.   The nomination of 8, 000 [sic] to 10,000 Mcf of gas per day by the operator of the Peoria Gas Processing Plant shall be the allocation of the plant capacity for the Peoria Field, herein described.

               b.   Each well that is not economically feasible to connect to the expanded Peoria Gas Processing Plant shall be permitted to produce oil and associated gas, with the produced gas flared, provided that such wells are not produced at a rate exceeding the field per well allowable; and each well that is connected to the Peoria Gas Processing Plant shall be permitted to produce the amount of oil it is capable of producing subject to the limitations that will be imposed by the Commission from a determination of each lease's gas allowable for the month in accordance with the following procedure:

               Step 1:  As determined by tests required by Rule 2 hereof, determine which wells are incapable of producing the maximum Daily Gas Allowable.  Classify such wells as Deficient Connected Wells.

               Step 2:  Determine a Daily Gas Allowable per well by the formula:

Daily Gas Allowable per well (MCFD) =

Gas Plant Nomination (MCFD) - Deficient Well MCFD

Number of Connected Wells - Number

of Deficient Connected Wells

with the nomination for the field, within the limits of 8, 000 [sic] MCFD to 10, 000 [sic] MCFD, said nominations, to be submitted monthly by the gas plant operator to the Commission and to other operators in the field.  Such nominations shall be submitted to the Commission on or before the twenty-fifth (25th) day of the month prior to the month for which the nomination is made.  No nomination shall, without a hearing, exceed the limits as given above.

               Step 3:  Add the Daily Gas Allowables determined in Step 1 and Step 2 for each lease within a governmental section and convert to a monthly basis to determine the monthly Lease Gas allowable for each lease in the Peoria "J" Sand oil pool.

               c.   In order that the operators may produce their leases in the most efficient manner possible, without unitization, the gas allowable of any one well or combination of wells on any given lease, within a governmental section, may be transferred and produced from any other well or combination of wells on that lease within said section, provided the transfer is to a well or wells with lower gas-oil ratios, provided further that the maximum allowed oil production shall be 400 barrels per day for a well to which any additional gas allowable has been transferred.

               d.   Understand overproduction of gas shall be adjusted on a monthly basis. Underproduction of gas during any one month may be made up only during the month immediately following and any overproduction of gas obtained during any one month shall be made up during the month immediately following.  Any overproduction of gas in excess of ten percent (10%) of the total monthly allowable shall be considered a violation, unless a valid reason is given.

Rule 2.    Gas-Oil Ratio Tests

               a.   Operators and owners of wells producing from the "J" Sand formation of the Peoria Field underlying the lands described in this order shall make a monthly gas-oil ratio test of each producing well, such tests to be taken during the first fifteen (15} days of each month and the results to be received by the Commission on OGCC Form 9 on or before the twenty-fifth (25th) day of the same month.  Such tests shall be the basis for calculating the volume of gas allowed to be produced for the following month.  Each well shall be produced at its normal rate of production for the last twenty-four (24) hours prior to the actual test and that during such test the well shall be produced at the pre-test rate with a 10% tolerance.  Not less than ten (10) days prior to the testing of the well, a schedule shall be submitted to the Commission and to the offset operators showing the wells and the respective dates of tests so that the Commission and offset operators will have an opportunity to witness such 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°F, [sic] and the gas-oil ratio shall be made and calculated in accordance with good engineering principles.  High gas-oil ratio wells that have been shut in shall be tested quarterly, beginning in Sept. 1972, in the same manner as provided above.

               b.   Any operator may apply for an amended gas allowable upon submission of authorized test or retest results.

Rule 3.    Production Reports

               a.   The Operator of the Peoria Gas Processing Plant shall file with the Commission a monthly report of gas take by leases in the Peoria "J" Sand oil pool measured at a pressure base of 15.025 psia and a temperature of 60°F [sic] on or before the twenty-fifth (25th) day of each month succeeding the month in which the gas production occurs.

               b.   Operators and owners of wells producing from the aforementioned "J" Sand oil pool shall file with the Commission a monthly report of oil production by wells, as required on OGCC Form 7, on or before the twenty-fifth (25th) day of each month succeeding the month in which the oil production occurs.  Gas production by wells, at the Operator's option, does not need to be reported but may be reported on this same form, provided that gas not taken by the plant must be reported showing amount of production and disposition.

Rule 4.

That a hearing shall be held in February, 1973 to review the plans concerning the allocation of gas to said expanded plant.

IT IS FURTHER ORDERED, that this order shall become effective August 1, 1972.

IT IS FURTHER ORDERED, that the Commission expressly reserves the right, after notice and hearing, to alter, amend or repeal any part of or all of the above orders.

ORDERED this 19th day of July 1972.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
	By	Frank J. Piro, Secretary