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

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CAUSE NO. 226

 

ORDER NO. 226-9

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission on February 16, 1971, at 9 a.m., in the Envoy Room Quality Motel, 1840 Sherman Street, Denver, Colorado, after giving Notice of Hearing, as required by law, on the application of Pan American Petroleum Corporation, now known as Amoco Production Company, for an order to revise the rules governing the rate of production of oil and gas from the "J" Sand in the Peoria Field, Arapahoe County, Colorado; said rules being established by Order No. 226-7 in Cause No. 226.

 

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 parries interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

 

3.      That the Commission by its Order No. 226-7 limited the gas production of the "J" Sand reservoir of the Peoria Field to 5,200 Mcf per day to prevent waste as that term is defined in the Oil and Gas Conservation Act.

 

4.      That a gas processing plant is currently under construction to process the gas produced from said "J" Sand reservoir and that the amount of gas required to operate the plant at capacity (approximately 8,000 Mcf per day) will not result in damage to the reservoir since the main producing mechanism is solution gas with a small associated gas cap.

 

5.      That when the gas processing plant is completed and there is a market for the gas produced from the "J" Sand reservoir of the Peoria Field, the operators and owners of all wells producing oil or gas, or both oil and gas, should not produce gas from any well unless:

 

1.

The gas so produced is marketed to supply domestic or municipal needs

 

 

 

or

 

 

2.

The gas so produced is required for lease development or operations and fuel. Exceptions should be granted for those wells not connected to the plant and for operational flaring.

 

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 there is an engineering committee of the operators presently at work on unitization and secondary recovery or pressure maintenance plans.  The Commission fully supports these ideas in principle as being desirable and necessary to prevent waste, increase ultimate recovery, and more completely protect correlative rights.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations 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.

 

 

 

 

 

 

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Township 4 South, Range 61 West, 6th P.M.

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

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Township 5 South, Range 61 West, 6th P.M.

 

 

 

 

 

 

 

 

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Rule 1.    Production Limitation

 

               a.   Until the Peoria Gas Processing Plant commences operation and is capable of receiving gas from the leases in the Peoria "J" Sand oil pool, Rule 1 of Order No. 226-7 entered by the Commission on October 26, 1970, shall continue in full force and effect.

 

               b.   On the date the Peoria Gas Processing Plant commences operation and is capable of receiving gas from the leases in the Peoria "J" Sand oil pool, each well that is not economically feasible to connect to the Peoria Gas Processing Plant shall be permitted to produce the amount of oil and associated gas it is capable of producing, with the produced gas flared; 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 leases 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) =

 

8,000 MCFD - Deficient Well MCFD

Number of Connected Wells - Number

of Deficient Connected Wells

 

with 8, 000 MCFD being the Peoria Gas Processing Plant's rated capacity to process gas and with the total of the daily gas volumes from all Deficient Connected Wells listed under Step 1 being the Deficient Well MCFD.

 

               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.   Under and overproduction of gas shall be adjusted on a monthly basis. Underproduction of gas during any one month may be made up only during the first and second months immediately following; and any overproduction of gas obtained during any one month shall be made up during the first and second months 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 (75) 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 a rate not greater or less than 10% of the pre-test rate.  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 July 1971, 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] of 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.

 

When the Peoria Gas Processing Plant commences operations and is capable of receiving gas produced from the “J” Sand reservoir of the Peoria Field, the owners and operators of all wells producing oil or gas, or both oil and gas, shall not produce gas from any well unless:

 

1.

The gas so produced is marketed to supply domestic or municipal needs

 

 

 

or

 

 

2.

The gas so produced is required for lease development or operations and fuel. Exceptions should be granted for those wells not connected to the plant and for operational flaring.

 

This rule shall not apply to these wells not connected to the gas processing plant or to necessary operational flaring in the event of a plant shut down, flaring at the plant shall not exceed a period of four hours at which time the field shall be shut-in.

 

Rule 5.   

 

A full report covering the progress of the unitization and secondary recovery or pressure maintenance efforts shall be made not later than the regularly scheduled May 1971 hearing.  At such hearing recommendations shall be made to the Commission on any action it might take or orders it might issue or tests it might require to accelerate or assist in the earliest possible accomplishment of the proposed unitization and secondary recovery programs.

 

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 2nd day of March 1971.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By 

Frank J. Piro, Secretary