BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF )
SWD, LLC, FOR AN ORDER ESTABLISHING )
A SURFACE USE PLAN FOR CERTAIN ) CAUSE NO. ______
DESCRIBED LANDS COMPRISING THE ) DOCKET NO. _____
STILLWATER PLANNED UNIT DEVELOPMENT )
LOCATED IN THE TOWN OF SILT )
GARFIELD COUNTY, COLORADO )
APPLICATION
SWD, LLC, a Colorado limited liability company (the “Applicant”), by its attorneys, Moye, Giles, O’Keefe, Vermeire & Gorrell LLP makes this application to the Oil and Gas Conservation Commission of the State of Colorado for an order establishing a surface use plan designating approved well site locations within the Stillwater Planned Unit Development (the “Stillwater PUD”) located in the Town of Silt, County of Garfield, State of Colorado. In support of this application the Applicant states as follows:
1. The Applicant is a limited liability company duly formed and authorized to conduct business in the State of Colorado.
SURFACE OWNERSHIP AND DEVELOPMENT STATUS
2. The Applicant is the surface developer of approximately 1450 acres of real property located in the Town of Silt, Garfield County, Colorado, covering and including portions of Sections 9, 10, 11, 12, 13, 14, 15 and 16, Township 6 South, Range 92 West, 6th P.M., more particularly described on Exhibit “A” attached hereto and made a part hereof (the “Property”).
3. In 1996, the Town of Silt (the “Town”) annexed the Property into the Silt Town limits.
4. The same year the Town approved the Stillwater Planned Unit Development as the zone district for surface development of the Property (the “Stillwater PUD”).
5. The Stillwater PUD provides for the development of a premier residential and golf course community designed to accommodate approximately 1400 homes and two championship eighteen hole golf courses. A copy of a plat outlining the approved Stillwater PUD is attached as Exhibit “B”.
6. The Applicant has phased financing in place to proceed with development of the Stillwater PUD, and is proceeding with the Town to have in place all necessary approvals to commence grading and construction activities on the Stillwater PUD infrastructure, water treatment facilities, new waster water treatment plant (to be constructed and jointly utilized by the Town and SWD, LLC), the first golf course and recreation facilities on or about December, 2002.
7. The Applicant will have its first public hearing before the Town Planning Commission on the preliminary plat for the first phase of the Stillwater PUD (the “MeadowWood Phase”) on July 2, 2002.
MINERAL OWNERSHIP AND DEVELOPMENT STATUS
8. In connection with the development of the Stillwater PUD and the upcoming public hearings on the subdivision plats and phases of development, the Applicant has researched the mineral ownership underlying the Stillwater PUD Property. A copy of the summary of Applicant’s mineral ownership check is attached hereto as Exhibit “C”.
9. In connection with development of the Stillwater PUD, the Applicant, through an affiliated company, has negotiated and entered into an Agreement to purchase from Valley Farms, Inc. (“Valley Farms”) all of Valley Farms’ mineral interest underlying the Property. Valley Farms is the prior surface owner of the Property and a participant in development of the Stillwater PUD. Valley Farms owns varying interests throughout the Stillwater PUD ranging from an undivided 8.333% to an undivided 45.625% interest in the mineral estate.
10. In accordance with §§ 24-65.5-101 to –104 of the Colorado Revised Statutes, the Applicant has provided to all identified mineral owners notice of the Town Planning Commission hearing on the Preliminary Subdivision Plat for the MeadowWood Phase of the Stillwater PUD, and has invited mineral owner participation in the Subdivision Plat approval process. A copy of the Applicant’s notice of the Town Planning Commission hearing together with a copy of the Applicant’s letter to the mineral owners are attached as Exhibits “D” and “E”, respectively.
11. Based on the Applicant’s mineral record examination, the mineral ownership underlying the Stillwater PUD is extremely divided with fractional interests ranging from 1/14 of 1.25% up to the approximate 45% interest owned by Valley Farms presently under contract to the Applicant.
12. Based on the Applicant’s mineral record examination there are no existing or effective oil and gas leases on any of the mineral interests within the Stillwater PUD.
13. Based on the Applicant’s examination of Commission records there are no producing oil or gas wells located in the Stillwater PUD.
14. Based on the Applicant’s examination of Commission records there are no pending Applications for Permit to Drill for oil or gas wells located in the Stillwater PUD.
APPLICANT STANDING
15. The Applicant is an interested party in these proceedings pursuant to Rule 503.b.6. The Applicant, as the surface developer and interested party in the minerals, will be directly and adversely affected or aggrieved by the development of the Stillwater PUD mineral estate under existing Commission rules and regulations without further Commission direction to provide for the coexistent development of the surface estate and the possible future development of the mineral estate underlying the Property.
REQUEST FOR RELIEF
16. The Applicant seeks Commission approval of a surface use plan (the “Surface Use Plan”) and implementation of the Surface Use Plan by Commission Order to provide for future development of the minerals underlying the Stillwater PUD including centralized location of well sites and facilities, and such additional measures as the Commission deems appropriate to provide for development of the mineral estate consistent with the protection of public health, safety and welfare.
17. Adoption of a Surface Use Plan will foster, encourage, and promote the development, production, and utilization of the oil and gas underlying the Stillwater PUD Property by planning for future development in an unleased area, recognizing that when the surface is fully developed exploitation of any potential minerals would be severely limited, if not completed precluded, under existing Commission Rules and Regulations applicable to high density residential areas and designated outside activity areas.
18. Adoption of a Surface Use Plan will provide certainty to the Applicant to proceed with surface development and marketing activities for the Stillwater PUD to ensure that all future homeowners are made aware of the possibility of mineral extraction and the advance planning by the Applicant and the Commission, with mineral owner participation, to provide for potential mineral development in a manner consistent with public health, safety and welfare.
19. Based on the foregoing, Applicant respectfully requests that the Commission enter an order adopting a proposed Surface Use Plan to be submitted by the Applicant and that any applications for permit to drill filed with the Commission conform to the approved Surface Use Plan.
20. If the Applicant does not proceed with development of the Stillwater PUD on or before one year from the date of entry of the Commission Order approving the Surface Use Plan, the Applicant consents and agrees that the Commission, by its own motion, may rescind its Order approving the Stillwater PUD Surface Use Plan.
21. Notice of this application has been or will be served on all the owners within the Stillwater PUD consistent with Rule 507(b)(1).
Respectfully submitted this 7th day of June, 2002,
MOYE, GILES, O’KEEFE, VERMEIRE & GORRELL LLP
Cynthia L. Bargell
Attorney Registration No. 24690
1225 17th Street, Suite 2900
Denver, CO 80202
BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF )
SWD, LLC, FOR AN ORDER ESTABLISHING )
A SURFACE USE PLAN FOR CERTAIN ) CAUSE NO. 523
DESCRIBED LANDS COMPRISING THE ) DOCKET NO. 0207-GA-07
STILLWATER PLANNED UNIT DEVELOPMENT )
LOCATED IN THE TOWN OF SILT )
GARFIELD COUNTY, COLORADO )
SUPPLEMENTAL APPLICATION
SWD, LLC, a Colorado limited liability company (the “Applicant”), by its attorneys, Moye, Giles, O’Keefe, Vermeire & Gorrell LLP makes this supplement to SWD, LLC’s Application filed with the Oil and Gas Conservation Commission of the State of Colorado on June 7, 2002, for an order establishing a surface use plan designating approved well site locations within the Stillwater Planned Unit Development (the “Stillwater PUD”) located in the Town of Silt, County of Garfield, State of Colorado. In support of this supplemental application the Applicant states as follows:
22. On June 7, 2002, the Applicant filed with the Commission an Application requesting the Commission to enter an order establishing a surface use plan (the “Surface Use Plan”) to provide for the concurrent development of the surface and mineral estate underlying the Stillwater PUD located within the Town of Silt.
23. The Applicant has engaged geologic and engineering experts to examine the potential productive capacity of the mineral estate underlying the Stillwater PUD and the technologically feasible alternatives for mineral extraction.
24. The Applicant has identified eleven two and one-half acre sites within the Stillwater PUD that would remain suitable for oil and gas operations during and after surface development of the Stillwater PUD, taking into account cost-effectiveness, technical feasibility and relevant geologic and petroleum engineering conditions as well as prevention of waste, protection or correlative rights and promotion of development. The oil and gas well locations are identified as Drilling Pad Locations on Exhibit A attached hereto.
25. The Applicant has examined engineering information from nearby fields and wells to examine the feasibility of directional drilling and the relevant directional displacement for surface and bottom-hole locations. Based on this investigation the attached plat of Drilling Pad Locations reflects a directional reach of approximately 1,600 feet from the surface to the proposed bottom-hole locations.
26. The Applicant has examined the topographic quadrangles available for the Stillwater PUD to locate Drilling Pad Locations that appear reasonable to access and topographically feasible for drilling purposes. A copy of the Stillwater PUD Topographic Map with an overlay of the proposed Drilling Pad Locations is attached as Exhibit B.
27. The Applicant has examined the Rules and Regulations of the Commission (the “Rules”) as they relate to the protection of public health, safety and welfare and the environment for areas where no surface development has occurred (“Low Density Areas”) and the Rules related to High Density Areas and Designated Outdoor Activities, together with relevant orders of the Commission related to mineral development in Garfield County, Colorado. The Applicant has attached as Exhibit D Proposed Drilling and Facility Operation Provisions to take into account the surface development planned for the Stillwater PUD and the possibility of future mineral development within the Stillwater PUD.
28. The Applicant has further examined and platted the mineral ownership within the Stillwater PUD and prepared a Mineral Ownership Map which is attached as Exhibit C.
29. The Applicant has or will serve a copy of this Supplemental Application on all the owners within the Stillwater PUD consistent with Rule 507(b)(1).
Respectfully submitted this 24st day of June, 2002.
MOYE, GILES, O’KEEFE, VERMEIRE & GORRELL LLP
Cynthia L. Bargell
Attorney Registration No. 24690
1225 17th Street, Suite 2900
Denver, CO 80202
|
EXHIBIT “D” |
Drilling and FacilitY Operation PROVISIONS
Stillwater ranch pLANNED UNIT DEVELOPMENT Surface Use Plan
These Drilling and Facility Operation Provisions (“Drilling Provisions”) are attached to and made a part of the Order adopting a Surface Use Plan entered into by the Colorado Oil and Gas Conservation Commission in connection with Cause No. 523, Docket No. 0207-GA-07 (the “Order”), to provide for the safe and orderly development of the oil and gas resources underlying the Stillwater Ranch Planned Unit Development located in the Town of Silt, Garfield County, Colorado.
Definitions. The terms and phrases used herein shall have the same definitions set forth in the Order, and in the 100 Series of the Rules and Regulations of the Oil and Gas Conservation Commission (the “Rules”). In addition, the terms used herein shall have the following meanings:
Director means the Director of the Oil and Gas Conservation Commission.
Drilling Pad Location means the centralized drilling and production facility designated by the Commission in the Order comprised of approximately two and one-half acres of land suitable for oil and gas operations, and conforming as near as practicable to the configurations set forth on the Drilling Pad Location Plat attached to and made a part of the Order.
Golf Course Operator means the organization authorized to operate and manage the West Course at Stillwater and the East Course at Stillwater Golf Courses to be located within the Stillwater Community. If more than one operator exists for the Stillwater Golf Courses the approval from Golf Course Operator as required herein shall mean approval from all designated Golf Course Operators.
Homeowner’s Association means the Stillwater Ranch Association, LLC, a Colorado non-profit corporation, established as the homeowner’s association for the Stillwater Community, and any subassociations thereof.
Metro District means the Stillwater Metropolitan District No. 1 and No. 2 established in connection with the development of the Stillwater Community to provide certain services to the Stillwater Community.
Mineral Developer means any Owner, as defined by the Rules, within the Stillwater Community.
Phase means that portion of the Stillwater Community planned for surface development in accordance with the Stillwater Ranch PUD Development Plan.
Preliminary Plat means the preliminary subdivision plat for surface development provided to the Town in accordance with applicable Town ordinances and rules.
Stillwater Community means the residents and occupants of the Stillwater PUD and the community facilities and amenities constructed and provided for the use and enjoyment of the residents and occupants.
Surface Developer means SWD, LLC, its successors or assigns.
Town means the Town of Silt, Colorado.
Well Locations.
Drilling and production operations for oil and gas development within the Stillwater Community shall occur only within the following designated drilling pads, all of which are located in Township 6 South, Range 92 West, 6th P.M. Garfield County, Colorado:
Drilling Pad Location # 1 9-10 Section 9: NW1/4SE1/4
Drilling Pad Location # 2 15-7 Section 15: SW1/4NW1/4
Drilling Pad Location # 3 15-3 Section 15: NE1/4NW1/4
Drilling Pad Location # 4 15-8 Section 15: SE1/4NE1/4
Drilling Pad Location # 5 11-13 Section 11: SW1/4SW1/4
Drilling Pad Location # 6 14-3 Section 14: NE1/4NW1/4
Drilling Pad Location # 7 14-7 Section 14: SW1/4NE1/4
Drilling Pad Location # 8 13-10 Section 13: NW1/4SE1/4
Drilling Pad Location # 9 13-16 Section 13: NW1/4SW1/4
Drilling Pad Location # 10 12-13 Section 12: SW1/4SW1/4
Drilling Pad Location # 11 14-12 Section 14: SW1/4NW1/4
The Drilling Pad Locations are further depicted on the Drilling Pad Location Plat attached to and made part of the Order.
Drilling Pad Locations shall not exceed two and one-half acres in size without the advance written consent of the Surface Developer while surface development for the Stillwater Community is ongoing, or upon completion of surface development, without the advance written consent of the Metro District, the Homeowner’s Association and the Golf Course Developer.
During the planning stages for surface development for the Stillwater Community the Director may approve minor adjustments to the Drilling Pad Locations made at the request of the Surface Developer provided each Drilling Pad Location continues to provide access to the bottom hole locations depicted on the Drilling Pad Location Plat.
During the surface development phases for the Stillwater Community, Drilling Pad Locations may altered upon the mutual agreement of the Surface Developer and the Mineral Developer, with the approval of the Director.
Upon completion of development of the Stillwater Community, Drilling Pad Locations may be altered upon the mutual agreement of the Metro District, the Homeowner’s Association, the Golf Course Developer and the Mineral Developer, with the approval of the Director.
General Safety and Maintenance. All Oil and Gas Operations within the Stillwater PUD shall be conducted to minimize impacts to the Stillwater Community.
Drilling Pad Location Safety and Maintenance.
Fencing Requirements. Appropriate fencing for safety, security and screening shall be installed during drilling and completion operations at any Drilling Pad Location. Upon completion of the well or wells at any Drilling Pad Location, and at all times while the Stillwater Community Golf Courses are operational, appropriate fencing for screening and safety shall allow for the continued operation of and minimization of impacts on the Golf Course areas.
Production Tank Batteries. No more than two tanks comprising a single tank battery shall be located at each Drilling Pad Location. All tank batteries shall be low profile and installed to minimize Stillwater Community impacts
Pipeline Rights-of-way. The Surface and Mineral Developer will cooperate to establish safe and reasonable rights-of-way for any production established in Stillwater Community.
Guy Line Anchors. The Mineral Developer and the Surface Developer shall cooperate to locate all guy line anchors left buried for future use to minimize surface impacts. Guy line anchors for Drilling Pad Locations within proposed Golf Course areas shall be located outside of all greens and fairways in rough areas, situated to provide for successful anchoring for well maintenance.
Abandonment and Reclamation. All reclamation shall be consistent with the planned surface use for the Stillwater Community.
Drilling Pad Locations shall be cleared of all non-essential equipment, trash and debris within thirty (30) days after a well is plugged and abandoned.
Interim Reclamation of the Drilling Pad Locations shall be conducted to minimize impacts on the surface uses within the Stillwater Community subject to site specific reclamation conditions agreed to by the Surface Developer and the Mineral Developer. During interim reclamation the Drilling Pad Location shall be reduced to a size that does not exceed the acreage reasonably necessary to accommodate surface production facilities for any producing wells located thereon.
Final Reclamation of Drilling Pad Locations shall be completed in accordance with the 1000 Series Rules subject to site specific reclamation conditions agreed to by the Surface Developer and the Mineral Developer.
Identification of plugged and abandoned wells. All permanent monuments for dry hole identification shall be buried to minimize surface impacts.
Limitation on Drugs, Alcohol, Firearms & Dogs. Any Mineral Developer and its agents and assigns shall adopt and enforce rules to prohibit personnel from transporting illegal drugs, alcohol, firearms or dogs into the Stillwater Community.
Operation Scheduling.
Upon the Surface Developer’s initiation of the process for approval of a Preliminary Plat for any Phase of development for the Stillwater Community, Oil and Gas Operations at any Drilling Pad Location within the Phase being platted shall occur during the months of November through February. The seasonal limitation on Oil and Gas Operations may be waived if the Developer secures a waiver as provided for herein.
Oil and Gas Operations at Drilling Pad Locations situated within a Phase of the Stillwater Community where the Surface Developer has not initiated the Town Preliminary Platting process may occur during any month of the year, subject to any site-specific conditions imposed by the Director, or as otherwise agreed between the Surface Developer and the Mineral Developer.
General well maintenance shall be scheduled for and completed during daylight hours. The daylight limitation shall not apply in the event of any emergency, which in the reasonable estimation of the Mineral Developer, necessitates immediate response.
Drilling Fluid Systems.
Oil and Gas Operations located within any Phase of the Stillwater Community where the Surface Developer has initiated the Preliminary Platting process shall be conducted using closed drilling fluid systems.
Oil and Gas Operations located within any Phase of the Stillwater Community where the Surface Developer has not yet initiated the Preliminary Platting process may be conducted using closed drilling fluid systems or conventional pit drilling systems. Upon commencement of the Preliminary Platting process for any Phase of surface development where conventional pits have been used in the conduct of Oil and Gas Operations, pits and pit liners shall be removed and the surface reclaimed in accordance with the Rules, the Order and any agreement between the Surface Developer and Mineral Developer.
Compressors. Any compressors within the Stillwater Community shall be constructed in accordance with the Stillwater Community architectural guidelines, shall be remotely located and situated to take advantage of all natural features for screening for aesthetic impacts and noise impacts.
High Density Area Rules. Unless modified or waived herein, upon the Surface Developer’s initiation of the process for approval of a Preliminary Plat for any Phase of development of the Stillwater Community, Oil and Gas Operations at any Drilling Pad Location within the Phase being platted shall be conducted in accordance with the High Density Area Rules.
Waiver. Any limitation imposed by the Order, these Drilling Provisions or the High Density Area Rules may be waived if the Mineral Developer secures from the Surface Developer (during surface development of the Stillwater Community), or from the Metro District, the Homeowner’s Association and the Golf Course Operator (upon completion of the surface development of the Stillwater Community), a waiver of the Rule or provision, and the Director determines the waiver will not adversely affect the public health, safety or welfare or cause a significant adverse impact to the environment.
Site Specific Conditions. At the time any application for permit to drill (“APD”) for drilling within the Stillwater PUD is filed the Director shall examine the permit and make a determination of site-specific drilling permit conditions of approval to prevent or mitigate public health, safety and welfare or significant adverse environmental impacts taking into consideration cost-effectiveness and technical feasibility and relevant geologic and petroleum engineering conditions as well as prevention of waste, protection or correlative rights and promotion of development:
Visual and aesthetic impacts – taking advantage of natural features for screening; constructing artificial features for screening.
Surface Impacts – taking into consideration site-specific surface impacts.
Noise Impacts – locating or orienting motors and compressors used in drilling, hydraulic fracturing, well completion, and production operations to reduce noise, installing sound barriers to achieve compliance with COGCC rules.
Road Impacts – impact minimization through appropriate road locations, travel limitations and watering operations.
Ground Water Impacts – collecting and analyzing water and gas samples from existing water wells or springs; installing monitoring wells, collecting samples, and reporting water, gas and pressure data.
Safety Impacts – impact minimization through appropriate security measures around wellheads and production equipment.
The Director shall take into account information provided by the Surface Developer, the Metro District, Homeowner’s Association, the Golf Course Operator and the Town when making a determination of the appropriate site-specific permit conditions.
If the Mineral Developer objects to any of the conditions of approval for the APD the Director shall suspend the APD and properly notice and set the matter for the next regularly scheduled Commission hearing at which time the Commission may determine conditions of approval for the APD.
Consultation and Notice Rules. Unless otherwise specifically provided for herein, neither the Order nor these Drilling Provisions shall affect the Commission Rules related to surface owner notice and consultation.
No Limitation on Private Party Contracts. Unless otherwise specifically addressed herein, neither the Order nor these Drilling Provisions shall affect the rights of the Surface Developer and the Mineral Developer to negotiate the terms of concurrent development of the surface and the mineral estate.
|
Kenneth A. McPherson Trust US Bank Private Client Services ATTN: Lottie Conradi P.O. Box 1484 Minneapolis, MN 55480-1484
|
|
Valley Farms, Inc. 3141 Hood Street, Suite 60 Dallas, TX 75219-5003
|
|
Charles & Luella Bagley 627 N. Happy Valley Road Nampa, ID 83687
|
|
George & Virginia Bagley 6044 233 Road Silt, CO 81652
|
|
Luke Bagley 540 Crawford Lane Palisade, CO 81526
|
|
Ms. Essie Fern Bagley 130 - 9th Street Silt, CO 81652
|
|
Paul Bagley 1073 CR 260 Silt, CO 81652
|
|
Fern Bagley Estate 130 9th Street Silt, CO 81652
|
|
M. Louise Barker, JT P.O. Box 415 New Castle, CO 81647
|
|
Nancy & Frank Bird P.O. Box 240 DeBeque, CO 81630
|
|
Dennis Carruth, et al, as Tenants in Common 10720 Bradford Road #108 Littleton, CO 80127
|
|
Ms. Marie Dedisse P.O. Box 158 Commerce City, CO 80037
|
|
Mr. Vernon P. Dedisse, Jr. 1863 Wazee Street, 3C Denver, CO 80202
|
|
David R. & Kelli J. Diedrich 0990 County Road 311 New Castle, CO 81647
|
|
Fern Frei 0287 Midvaley Drive New Castle, CO 81647
|
|
Robert Gant 429 City View Lane Grand Junction, CO 81503
|
|
Bonnie & Eugene Heff P.O. Box 278 DeBeque, CO 81630
|
|
Marylee Hoaglund 10876 Melody Drive Northglenn, 80234
|
|
Betty Housman 8271 W. Nichols Avenue Littleton, CO 80128
|
|
Jerry Jones 9104 Jensen Court NE Albuquerque, NM 87112-2705
|
|
Ms. Beverly A. Jones 11216 Morocco Road NE Albuquerque, NM 87111
|
|
Joseph Langegger 3807 Lupine Drive Vail, CO 81657
|
|
Mr. Jake Mall Box 351 Rifle, CO 81650
|
|
Ms. Stella Caroline McClung 7706 Booth Road Klamath Falls, OR 97601
|
|
Kenneth A. McPherson 1055 Main Street Meeker, CO 81641
|
|
Leslie Dale McPherson 1859 County Road 344 Silt, CO 81652
|
|
Mr. Bobby L. McPherson 2197 County Road 311 New Castle, CO 81647
|
|
Mr. Donald A. McPherson Route 1, Box 139 Richland, OR 97870
|
|
Mr. Dwight A. McPherson P.O. Box 233 Craig, CO 81626
|
|
Mr. Frank L. McPherson 11033 3100 Road Hotchkiss, CO 81419
|