3-10

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 IGNACIO FIELD, LA PLATA COUNTY, COLORADO, WITH PARTICULAR REFER-ENCE TO THAT KNOWN PRODUCING ZONE LO-CATED THEREIN TERMED "DAKOTA-MORRISON"

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CAUSE NO. 3

ORDER NO. 3-10

REPORT OF THE COMMISSION

This matter came on for hearing before the Commission on April 20, 1954, Room 704 State Capitol Annex, Denver, Colorado, pursuant to application of the Stanolind Oil and Gas Company, as provided in Paragrah [sic] III of Interim Order No. 3-8.

FINDINGS

The Commission finds as follows:

1. That due notice of the time, place and purpose of this 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, after due consideration of all the evidence heretofore and presently submitted and after hearing arguments of counsel, the Commission finds that in order to prevent waste as defined by law, to protect the correlative rights of all parties concerned, to insure proper and efficient development and to promote conservation of the gas resources of the State, it is necessary and in the public interest to promulgate field rules for the Dakota-Morrison formation in the Ignacio Field, La Plata County, Colorado.

4. That the Ignacio Dakota-Morrison Field, La Plata County, Colorado, is hereby defined as the following described land in said County and State:

Township 32 North, Range 7 West
Sections 1, 2, and 3	All

Township 33 North, Range 7 West
Sections 5, 6, 7, 8, 9, 15, 16, 17, 18, 19, 20, 21, 22, 23, 25, 26, 27, 28, 29, 30, 33, 34, 35 and 36	All

Township 33 North, Range 8 West
Sections 1, 2, 3, 4, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 22, 23, and 24	All

5. That the Dakota-Morrison formation of the Ignacio Field shall mean and include that geological strata the top of which was encountered at a depth of approximately 7360 feet and which is open in the well bore to a depth of approximately 7770 feet beneath the surface of the earth in Stanolind-Ute Indians B-1 well located in the Northeast Quarter of Section 18, Township 33 North, Range 7 West, N.MP.M., as shown by the Schlumberger electric log of the said well; and that the Dakota-Morrison formation, insofar as the same underlies the above described area, constitutes a single common source of supply or pool of gas in the said field.

6. That, based on the evidence heretofore and presently submitted relating to the drilling of wells, the information developed therefrom, the testimony of witnesses relating thereto and other geological and engineering conclusions concerning the characteristics of the Ignacio Dakota-Morrison pool, the Commission finds that the estimated productive limits of the pool include the area shown within the red lines on the map filed with the Commission as Stanolind Exhibit No. 10.

7. That further, the Commission finds that one well will adequately and efficiently drain an area of at least 640 acres of land in the Ignacio Dakota-Morrison pool.

8. That development of the Ignacio Dakota-Morrison pool is in the initial stage, that it is essential in order to prevent waste as defined by law and protect the correlative rights of the interested parties for the wells in this pool to be spaced in an efficient and orderly manner; and that in determining a proper spacing program within the provisions of Chapter 230, Session Laws of Colorado, 1951 as amended, it is necessary to consider the cost of wells, their effective drainage area, their producing characteristics and other geological and engineering reservoir factors.

ORDER

IT IS THEREFORE ORDERED, that the following rules and regulations shall apply to wells heretofore and hereafter drilled and completed or recompleted in the Ignacio Dakota-Morrison pool as hereinabove defined; in addition to other applicable rules, regulations and orders of the Commission heretofore adopted and not in conflict herewith:

Rule 1

No well shall be drilled and completed or recompleted in the said pool, and no notice of intention to drill shall be approved by the Commission unless:

(a) Such well be located on a designated drilling unit of not less than 640 acres of land, more or less, according to legal subdivisions of the United States Land Surveys in which unit all of the interests are consolidated by a pooling agreement or otherwise and on which no other well is completed or approved for completion in the same pool.

(b) Such drilling unit be in the shape of a square except for normal variations in legal subdivisions of the United States Land Surveys.

(c) Such well be drilled no closer than 1320 feet to the outer boundaries of the quarter section upon which it is located.

Rule 2

The Commission may, by order entered after due notice and hearing, and to prevent waste or confiscation of property, or to prevent inclusion of unproductive land in a drilling unit, grant exceptions to the provisions of RULE 1 above; and the Commission may, without additional notice and hearing, grant exceptions to RULE 1 (c) above, when, because of topographical reasons, it is necessary to locate such well closer than 1320 feet to the boundaries of the quarter section in which the well is drilled.

Rule 3

The casing program of all wells hereafter drilled in the Ignacio Dakota-Morrison pool shall include at least 2 strings of casing which shall be set in accordance with the following:

(a) The surface casing shall consist of new of reconditioned pipe with the original mill test of not less than 1200 psi and shall be set and cemented at a point such that all fresh water and water of present or probable value for domestic, commercial or stock purposes shall be confined to their respective strata and shall be adequately protected against contamination by objectionable water, oil or gas, provided that the point at which the surface casing shall be set and cemented shall in no case be less than 200 feet below the surface of the earth. Cementing shall be by the pump and plug method and sufficient cement shall be used to fill the annular space behind the pipe to the surface of the ground or the bottom of the cellar. Cement shall be allowed to stand a minimum of 24 hours before drilling the plus or initiating tests. Before drilling the plug, a pump-pressure of at least 1,000 psi shall be applied. If at the end of 30 minutes, the pressure shows a drop of 100 psi or more, the casing shall be condemned. In lieu of the foregoing test, the surface casing shall be tested after drilling the plug by bailing the hole dry. The hole shall remain dry for one hour to constitute satisfactory proof of a water shutoff. In event the casing is condemned, it shall again be tested in the same manner after corrective operations are completed and this string shall stand the required test before compliance with this rule shall have been made.

(b) The producing or oil string shall consist of new or reconditioned pipe with an original mill test of not less than 2000 psi. This string of casing shall be set and cemented at such a point that all oil, gas and water encountered above the producing formation and below the surface casing shall be adequately confined to their respective strata. The cement shall be allowed to stand a minimum of 24 hours before drilling the plug or initiating tests. Before drilling the plug, a pump pressure of at least 1500 psi shall be applied. If at the end of 30 minutes, the pressure shows a drop of 150 psi or more, the casing shall be condemned. In lieu of the foregoing test, the surface casing shall be tested after drilling the plug by bailing the hole dry. The hole shall remain dry for one hour to constitute satisfactory proof of a water shutoff. In event the casing is condemned, it shall again be tested in the same manner after corrective operations are completed and this string shall stand the required tests before compliance with this rule shall have been made.

IT IS FURTHER PROVIDED that any operator or operators, owning oil and gas leases upon lands contained within the boundaries hereinabove defined and desiring to drill a well or wells thereon, shall, by pooling agreement of otherwise, form a 640-acre unit, or units, in conformity with the spacing pattern herein established provided that the rights of all parties affected hereby to apply to the Commission for the formation of a 640-acre unit or units under the provisions of Chapter 230 of 1951 Session Laws of the State of Colorado shall not be prejudiced by the entry of this order; and provided that, in the event of the proposed formation of a 640-acre unit to conform with the spacing pattern herein established which contains patented lands and Indian lands, if the Department of the Interior fails to approve such unit, then the patented lands therein shall not be affected by the terms and requirements of this order, other than Rule 3 above.

IT IS FURTHER ORDERED that this order shall become effective as of May 1, 1954, and shall supersede all other orders heretofore issued by the Commission governing operations and development in the Ignacio Dakota-Morrison pool, and shall remain in effect for a period of twenty-four (24) months thereafter; and that the same shall terminate and expire at the end of such period, SAVE AND EXCEPT that this order shall remain and continue in full force and effect until the date upon which the Commission shall enter a permanent order herein, after due notice and hearing and pursuant to application and proceedings therefore, initiated not less than 30 days prior to such expiration date.

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 rules and regulations.

ORDERED this 6th day of May, 1954, by the Oil and Gas Conservation Commission of the State of Colorado.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Annabel Hogsett, Assistant Secretary