REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on April 20, 1971, 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 Amoco Production Company, for an order establishing 80-acre drilling and spacing units for the production of oil from the "J" Sand, underlying certain lands in Arapahoe County, Colorado, said lands to include Section 18, Township 5 South, Range 60 West, 6th P.M., which was addeD at the time of the her hearing; and further, such orders as the Commission deems appropriate to prevent the waste of oil and gas, either or both, in the operation of said field, and to carry out the purposes of the statute.

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 evidence presented at the hearing indicates that the "J" Sand constitutes a common source of supply of oil underlying the following described lands in Arapahoe County, Colorado, to-wit: Township 5 South, Range 60 West, 6th P.M. Section 18: All Section 30: All Section 19: All Section 31: All Township 5 South, Range 61 West, 6th P.M. Section 13: All Section 26: All Section 14: All Section 27: All Section 22: All Section 34: All Section 23: All Section 35: All Section 24: All Section 36: All Section 25: All

4. That all parties involved were represented and no objection was pre-sented at the hearing to include all of Section 18, Township 5 South, Range 60 West, 6th P.M., in the lands to be covered by this Order. ( Over )

5. That in order to prevent the waste of oil and gas, as defined by law; to protect the correlative rights of all parties concerned; to prevent the drilling of unneces-sary wells, and to insure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be made establishing 80-acre drilling and spacing units for the production of oil from the "J" Sand, common source of supply underlying the lands defined herein; that said units should be 80-acre drilling units, and consisting of the E/2 and the W/2 or the N/2 and the S/2 of each quarter section, according to the governmental survey thereof, which drilling units should be designated at the time of filing the permit to drill; and that the permitted well for each such drill-ing unit should be located in the center of the NW/4 and the SE/4 of each quarter section, with a tolerance of 200 feet in any direction.

6. That all available geological and engineering data concerning said "J" Sand indicate that one well will efficiently and economically drain an area of approxi-mately 80 acres, and that drilling units of the size and shape hereinabove described are not smaller than the maximum area that can be efficiently drained by one well pro-ducing from said "J" Sand.

7. That in order to prevent waste, as that term is defined in the Oil and Gas Conservation Act, and to, prevent the escaping blowing, and releasing of gas in that a change would be necessary.

8. That the maximum daily production of gas from wells capable of pro-ducing both oil and gas should not exceed a volume of 200,000 cubic feet, until such time as additional development in the Field and/or an available gas market indicate that a change would be necessary.

9. That in order to promote orderly transition of a spacing pattern of one field to that of an adjacent field, the operators in the Latigo Field should have some options as to where the permitted wells should be located in the drilling units adjacent to the boundaries of the Peoria Field.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the following rules and regula-tions shall apply hereafter to wells drilled, completed, or recompleted in the "J" Sand underlying the Latigo Field herein described, in addition to other applicable rules and regulations and orders of this Commission, if any, heretofore adopted and not in conflict herewith:

Rule 1: Eighty (80) acre drilling and spacing units shall be and the same are hereby established for the production of oil from the "J" Sand underlying the following described lands in Arapahoe County, Colorado, to-wit:

Township 5 South, Range 60 West, 6th P.M. Section 18: All Section 30: All Section 19: All Section 31: All

Township 5 South, Range 61 West, 6th P.M. Section 13: All Section 26: All Section 14: All Section 27: All Section 22: All Section 34: All Section 23: All Section 35: All Section 24: All Section 36: All Section 25: All - 2 - (#239-1)

Rule 2. Said drilling units shall consist of two (2) quarter-quarter sec-tions, lots, or tract, or combinations of lots or tracts comprising eighty (80) acres, more or less, and each such drilling unit shall be the E/2 and the W/2 or the N/2 and the S/2 of each quarter section, according to the governmental survey thereof, and each operator shall designate the 80-acre unit upon which each well is to be located, which drilling units should be designated at the time of filing the permit to drill; and the permitted well for each such drilling unit shall be located in the center of the NW/4 and the SE/4 of each quarter section, with a tolerance of 200 feet in any direction.

Rule 3. Production Limitation

a. The maximum daily production of gas from any one (1) well capable of producing both oil and gas from the "J" Sand underlying said Latigo Field shall not exceed a volume of Two Hundred Thousand (200,000) cubic feet.

b. 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 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.

c. A ten (10) day test period is permitted without limitation for new wells completed in the "J" Sand in said Field.

Rule 4. Gas-Oil Ratio Tests

a. Operators and owners of wells producing from the "J" Sand formation of the Latigo 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 Commis-sion 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 oil and 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 (34) 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 15025 psia and a base temperature of 60 F, and the gas-oil ratio shall be made and calculated in accordance with good engineering principles.

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

Rule 5. Individual Well Production Reports

Operators and owners of wells producing from the aforemen-tioned "J" Sand reservoir of the Latigo Field shall file with the Commission a monthly report of production by wells, as required on a form prescribed by the Commission, on or before the twenty-fifth (25th) day of each month succeeding the month in which the production occurs.

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IT IS FURTHER ORDERED, that the permitted well on a drilling unit in the Latigo Field:

1. Which is adjacent to an area for which drilling units of equivalent size and a different spacing pattern for the "J" Sand are now or may hereafter be established by special order of the Commission for the "J" Sand, may be located in accordance with the spacing pattern prescribed for either area;

2. Which is offset either directly or diagonally by another drilling unit in the Latigo Field upon which a producing well has been located in accordance with the spacing pattern prescribed for another area, may also be located in accordance with the spacing pattern prescribed for either area;

3. Which is offset either directly or diagonally by a drilling unit upon which there is a producing well located in accordance with the pattern prescribed for the Latigo Field, and also by a drilling unit upon which there is a producing well located in accordance with the spacing pattern prescribed for some other area, may be located at any location on the intervening drilling unit no closer to the perimeter of the intervening drilling unit than would be permitted under either of the two permitted spacing patterns.

IT IS FURTHER ORDERED that this order shall become effective May l, 1971.

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 28th day of April 1971,

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