REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 17, 1975 at 9 A.M., in Room 532, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by law on the application of Gremlin Oil Company, requesting the Commission to take such action as necessary to protect the correlative rights of the applicant. Applicant alleges that the well drilled by Okmar-Oil Company in the SW/4SW/4 Section 3, Township 1 North, Range 56 West, 6th P.M. is located less than 600 feet from applicant's lease line and in violation of Rule 318.

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 Well No. 2 Peterson-Federal Land Bank, SW/4SW/4 Section 3, Township 1 North, Range 56 West, 6th P.M., Wishbone Field, is located less than 600 feet from the lease line and said well should be considered an exception to Rule 318 of the Rules and Regulations of the Oil and Gas Conservation Commission.

4. That in order to offset any advantage said well may have over the appli-cant's well by reason of the drilling of the well as an exception, and to prevent the produc-tion from the well of more than its just and equitable share, a restriction should be placed on the production from said well.

5. That evidence presented at the hearing indicates that production from said well should be restricted to 92% of the amount of oil the well is capable of producing as determined by production tests taken monthly.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Well No. 2 Peterson-Federal Land Bank, located in the SW/4SW/4 Section 3, Township 1 North, Range 56 West, 6th P.M., Wishbone Field, Morgan County, Colorado, shall be considered an exception to Rule 318 of the Rules and Regulations of the Oil and Gas Conservation Commission.

IT IS FURTHER ORDERED, that said well shall be restricted in oil produc-tion to 92 percent of the amount the well is capable of producing, and the maximum daily allowable, on a monthly basis, shall be determined from production tests as follows:

RULE 1. Capacity production test shall be taken during any 24-hour period between the fifteenth (15th) and twentieth (20th) of each month, the results of which shall be reported to the Commission on or before the 25th day of the month. Such tests shall be taken in accordance with good engineering principles and practices and shall be the basis for calculating the allowable for that particular month. The Commission and offset opera-tor shall be notified five (5) days prior to the testing of the well in order that they will have an opportunity to witness such tests.

Rule 2. Overproduction shall be adjusted on a monthly basis. Overproduc-tion obtained during any month shall be made up during the month immediately following.

IT IS FURTHER ORDERED, that these orders shall become effective July 1, 1975.

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 19th day of June, 1975.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary

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