BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION
OF )
ENCANA OIL & GAS (USA) INC.
FOR AN ) CAUSE
NO. 311
ORDER ALLOWING ADDITIONAL WELLS IN
)
CERTAIN DRILLING AND SPACING UNITS
) DOCKET NO. ____
COVERING THE MORAPOS-CASTLEGATE )
FORMATION IN THE DOUGLAS CREEK - )
SOUTH FIELD, RIO BLANCO COUNTY, )
COLORADO )
VERIFIED APPLICATION
COMES
NOW, the Applicant, EnCana Oil & Gas (USA) Inc., 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 Morapos-Castlegate
Formation in the Douglas Creek - South Field located in Rio Blanco County,
Colorado. In support thereof, EnCana Oil
& Gas (USA) Inc. states as follows:
I
Applicant
is the owner of certain oil and gas leases and the operator of wells in the
Morapos-Castlegate 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
Township
4 South, Range 102 West, 6th P.M.
Section
11: W/2
These lands are referred to as the
Application Lands.
II
In
Cause No. 311, Order No. 311-5 entered September 16, 1981 as of August 17,
1981, the Oil and Gas Conservation Commission determined that the Morapos-Castlegate
Formation constitutes a common source of supply of gas and associated
hydrocarbons in the Application Lands,
among other lands, and established drilling and spacing units for
production of gas and associated hydrocarbons from the Morapos-Castlegate
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 Morapos-Castlegate Formation. The
order provides that the permitted well for each unit should be located no
closer than 900 feet from the boundaries of the quarter section on which it is
located. The order also states that the
existing wells should be considered the permitted wells for the units on which
they are located; no existing wells are identified by name and location in the
order.
III
In
Cause No. 311, Order No. 311-6 entered September 28, 1993 as of September 20,
1993, the Oil and Gas Conservation Commission granted an exception to drill the
SDC No. 21 Well at an exception location 677 feet from the south line and 1915
feet from the east line of Section 6, Township 4 South, Range 101 West, 6th
P.M. for the production of gas and associated hydrocarbons from the
Morapos-Castlegate Formation; and an exception to drill the SDC No. 24 Well at
an exception location 963 feet from the north line and 603 feet from the west
line of Section 6, Township 4 South, Range 101 West, 6th P.M. for the
production of gas and associated hydrocarbons from the Morapos-Castlegate
Formation. The order also grants
exceptions to drill other wells at exception locations in drilling and spacing
units not subject to this application.
IV
In Cause No. 311, Order No. 311-7,
the Oil and Gas Conservation Commission for the State of Colorado ordered that
the permitted well locations established in Order No. 311-5 are repealed. Instead, in Order No. 311-7, the Commission
requires that the provisions of Rule 316 of the Oil and gas Conservation
Commission (now Rule 318) be adopted for permitted well locations in the
Application Lands.
V
Subsequent
operation of the producing wells in the Morapos-Castlegate 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 Morapos-Castlegate
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 Morapos-Castlegate
Formation in each 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 Morapos-Castlegate 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 Morapos-Castlegate
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
Morapos-Castlegate 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.
VI
Cause
No. 311, Order No. 311-5, as amended by Order No. 31107, provides that the
permitted locations are to be determined in accordance with the provisions of
Rule 316 of the Oil and Gas Conservation Commission; Rule 316 has been
renumbered Rule 318. Applicant requests
that any additional wells be located in accordance with the provisions of Rule
318 of the rules and regulations of the Oil and Gas Conservation Commission.
VII
The
Application Lands include areas with substantial topographical relief. Applicant requests the Commission to
authorize the Director, in his discretion and without further notice or
hearing, to grant administrative exceptions to well locations for topographic
reasons.
VIII
To
prevent waste, to protect correlative rights, to insure the proper and
efficient development of the Morapos-Castlegate Formation in the Application
Lands, and to insure the greatest ultimate recovery of gas and associated
hydrocarbon substances from the Morapos-Castlegate 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 drilling and spacing unit
in the Application Lands; that each existing well in the Application Lands be
designated as one of the permitted wells in the spacing unit in which the well
is located; that any additional wells be located in accordance with the
provisions of Rule 318 of the rules and regulations of the Oil and Gas
Conservation Commission; and that the Director be given the authority to grant,
in his discretion and without further notice or hearing, administrative
exceptions to permitted well locations for topographical reasons.
IX
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.
X
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 6th day of August, 2003.
Respectfully
submitted,
ENCANA
OIL & GAS (USA) INC.
BY:________________________________
Carleton
L. Ekberg, Esq.
Poulson,
Odell & Peterson, LLC
1775
Sherman Street, Suite 1400
Denver,
Colorado 80203
(303)
861-4400
Applicant's Address:
EnCana Oil & Gas (USA) Inc.
950 17th Street
Suite 2600
Denver, Colorado 80202
VERIFICATION
STATE OF COLORADO )
)
ss.
COUNTY OF DENVER )
_____________,
______________ of EnCana Oil & Gas (USA) Inc., 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 August, 2003 by ____________________, __________________ of
EnCana Oil & Gas (USA) Inc.
My Commission expires: _________________________
Notary
Public
______________________ Address__________________
_________________________
EXHIBIT A
ATTACHED TO VERIFIED APPLICATION OF
ENCANA OIL & GAS (USA) INC.
CAUSE NO. 311
Morapos-Castlegate FORMATION
RIO BLANCO COUNTY, COLORADO
Bureau of Land Management
2850 Youngfield Street
Lakewood, CO 80215
Tom Brown, Inc.
555 17th Street, Suite 1850
Denver, CO 80202-3918
Carbon Energy Corporation (USA)
1700 Broadway, Suite 1150
Denver, CO 80293
Maralex Resources, Inc.
621 17th Street, Suite 1125
Denver, CO 80293
A.J. Carter
6209 Hendrick, NE
Suite N
Albuquerque, NM 87710
National Fuel Corporation
7720 E. Belleview Avenue
Suite B-300
Englewood, CO 80111
Jeff Devere
Local Government Designee
555 Main Street
Meeker, CO 81641
Max B. Lewis
1001 Wasatch Towers
1235 E. 200 South Street
Salt Lake City, UT 84115
John R. Anderson
Carol Lee Hatch
1939 S. 300 West, Suite 200
Salt Lake City, UT 84115