BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                      OF THE STATE OF COLORADO

 

 

IN THE MATTER OF THE APPLICATION OF                    )

COASTAL OIL & GAS  CORPORATION FOR AN             )           CAUSE NO. 311

ORDER ALLOWING ADDITIONAL WELLS IN                   )

CERTAIN DRILLING AND SPACING UNITS                      )           DOCKET NO. ____

COVERING THE MANCOS "B" FORMATION IN   )

THE DOUGLAS CREEK - SOUTH FIELD,                        )

RIO BLANCO COUNTY, COLORADO                              )

 

 

                                                           VERIFIED APPLICATION

 

 

COMES NOW, the Applicant, Coastal Oil & Gas Corporation, by and through its attorneys, Poulson, Odell & Peterson, LLC, and makes application to the Oil and Gas Conservation Commission of the State of Colorado for an order to permit two wells to be drilled in existing drilling and spacing units established for the production of gas and associated hydrocarbons from the Mancos "B" Formation in the Douglas Creek - South Field located in Rio Blanco County, Colorado.  In support thereof, Coastal Oil & Gas Corporation states as follows:

 

                                                                              I

 

Applicant is the owner of certain oil and gas leases and the operator of wells in the Mancos "B" Formation in the Douglas Creek - South Field in Rio Blanco County, Colorado described as follows:

 

Township 4 South, Range 101 West, 6th P.M.

Section 5:         All

Section 6:         All

Section 7:         All

 

Township 4 South, Range 102 West, 6th P.M.

Section 1:         All

Section 2:         All

Section 3:         All

Section 10:       All

Section 11:       All

Section 12:       All

Section 13:       All

Section 14:       All

Section 15:       All

 

These lands are referred to as the Application Lands.

 

                                                                             II

 

By Cause No. 311, Order No. 311-4 dated February 17, 1978, the Oil and Gas Conservation Commission determined that the Mancos "B" Formation constitutes a common source of supply of gas and associated hydrocarbons in the Application Lands, and established drilling and spacing units for production of gas and associated hydrocarbons from the Mancos "B" Formation.  The order establishes spacing units of 160-acres consisting of a quarter-section of land according to the government survey for the production of gas and associated hydrocarbons from the Mancos "B" Formation.  The order provides that the permitted well for each unit should be located no closer than 600 feet from the boundaries of the quarter section on which it is located.

 

At the time Cause No. 311, Order No. 311-4 was entered, four wells had been drilled upon the Application Lands.  Each of those wells was identified as the permitted well for the spacing unit on which it was located.  In particular, the order states that Well No. 14 South Douglas Creek Fee located in the SE/4SW/4 of Section 13, Township 4 South, Range 102 West, 6th P.M. is the permitted well for the spacing unit consisting of the SW/4 of Section 13; Well No. 7-3 Red Rock Canyon Government located in the SE/4SW/4 of Section 7, Township 4 South, Range 101 West, 6th P.M. is the permitted well for the spacing unit consisting of the SW/4 of Section 7; Well No. 13 South Douglas Creek Government located in the NE/4NE/4 of Section 2, Township 4 South, Range 102 West, 6th P.M. is the permitted well for the spacing unit consisting of the NE/4 of Section 2; and Well No. 16 South Douglas Creek Government located in the SE/4SE/4 of Section 2, Township 4 South, Range 102 West, 6th P.M. is the permitted well for the spacing unit consisting of the SE/4 of Section 2.

 

                                                                             III

 

By Cause No. 311, Order No. 311-8 entered August 2, 1994 as of July 18, 1994, amended September 9, 1994, the Oil and Gas Conservation Commission granted an exception to drill the SDC No. 5 Well at an exception location 2198 feet from the south line and 1980 feet from the west line in the NE/4NW/4 of Section 6, Township 4 South, Range 101 West, 6th P.M. for the production of gas and associated hydrocarbons from the Mancos "B" Formation. 

 

                                                                             IV

 

Subsequent operation of the producing wells in the Mancos "B" Formation in the Application Lands has provided geological and engineering evidence to the effect that in the Application Lands one well will not efficiently and economically drain gas and associated hydrocarbons in the Mancos "B" Formation in an area of 160 acres.  Applicant requests that two wells be permitted to be completed and produced for gas and associated hydrocarbons in the Mancos "B" Formation in each 160-acre drilling and spacing unit in the Application Lands.  Applicant alleges that two wells for gas and associated hydrocarbons in each such drilling and spacing unit will efficiently and economically drain the Mancos "B" Formation; that each such drilling and spacing unit is not smaller than the maximum area that can be efficiently and economically drained by two wells in the Mancos "B" Formation; and that the correlative rights of all parties will be protected by allowing two wells to be completed for gas and associated hydrocarbons in the Mancos "B" Formation in each such drilling and spacing unit.  Applicant also alleges that the additional well in each drilling and spacing unit may be drilled in a manner consistent with the protection of public health, safety, and welfare.

 

                                                                             V

 

Cause No. 311, Order No. 311-4 provides that the permitted location for a well in each unit should be located no closer than 600 feet from the boundaries of the quarter section upon which it is located.  Applicant requests that each of the four wells identified  in Cause No. 311, Order No. 311-4 and the well identified in Cause No. 311, Order No. 311-8 be designated as a permitted well for the spacing unit in which each such well is located.  Applicant requests that any additional be well be located not closer than 600 feet from the boundary from the quarter section upon which it is located.  Applicant also requests  that the second well drilled in a 160-acre drilling and spacing unit for production from the Mancos "B" Formation be located not less than 1200 feet from the other well in the 160-acre drilling and spacing unit producing from the Mancos "B" Formation.

 

 

 

 

 

                                                                             VI

 

The Application Lands include areas with substantial topographical relief.  Applicant requests the Commission to authorize the Director, in his discretion, to grant administrative exceptions to well locations for topographic reasons.

 

                                                                            VII

 

To prevent waste, to protect correlative rights, to ensure the proper and efficient development of the Mancos "B" Formation in the Application Lands, and to assure the greatest ultimate recovery of gas and associated hydrocarbon substances from the Mancos "B" Formation in the Application Lands, Applicant requests that after notice and hearing, as provided by law, the Commission issue its order providing that, at the option of the operator, two wells be allowed to be drilled and completed on each 160 acre drilling and spacing unit in the Application Lands;  the four wells identified in Cause No. 311, Order No. 311-4 and the well identified in Cause No. 311, Order No. 311-8 be designated as one of the permitted wells for the spacing unit in which each such well is located; that any additional wells be located no closer than 600 feet from the boundary from the quarter section upon which it is located; that the second well in a 160-acre drilling and spacing unit producing from the Mancos "B" Formation be located not less than 1200 feet from the other well located in the same drilling and spacing unit producing from the Mancos "B" Formation; and that the Director be given the authority, in his discretion, to grant administrative exceptions to permitted well locations for topographical reasons.

 

                                                                            VIII

 

Applicant states that to the best of its information and belief Exhibit A attached hereto is the list of the names of "owners" in the Application Lands required to be notified in accordance with Commission Rule 507.

 

                                                                             IX

 

WHEREFORE, Applicant respectfully requests that this matter be set for hearing by the Commission; that notice hereof be given as required by law; and that upon hearing this Commission issue its order granting this Application as requested. Applicant further requests that the Commission in its order grant such other provisions as the Commission may find to be necessary or desirable in the cause.

 

DATED this 8th day of March, 2000.

 

Respectfully submitted,

 

COASTAL OIL & GAS CORPORATION

 

 

 

BY:________________________________

Carleton L. Ekberg, Esq.

Poulson, Odell & Peterson, LLC

1775 Sherman Street, Suite 1400

Denver, Colorado  80203

(303) 861-4400

Applicant's Address:

Coastal Oil & Gas Corporation

Nine Greenway Plaza

Suite 1400

Houston, Texas  77046-0995

mancosb.app

 

                                                                   VERIFICATION

 

 

 

STATE OF                    )

) ss.

COUNTY OF                 )

 

 

 

_____________, ______________ of Coastal Oil & Gas Corporation, upon oath, deposes and says that he has read the foregoing Verified Application before the Oil and Gas Conservation Commission of the State of Colorado, and states that the matters contained therein are true to the best of his knowledge and belief.

 

 

 

_________________________

 

 

 

 

Subscribed to and sworn to before me this _____ day of March __, 2000 by  ____________________, __________________ of Coastal Oil & Gas Corporation.

 

 

 

My Commission expires:                                   _________________________

Notary Public

______________________                                  Address__________________

_________________________

 

 

 

 

                                                                      EXHIBIT A

 

                                             ATTACHED TO VERIFIED APPLICATION OF

                                                  COASTAL OIL & GAS CORPORATION

                                                                  CAUSE NO. 311

 

                                                          MANCOS "B" FORMATION

                                                   RIO BLANCO COUNTY, COLORADO