October 28, 2002

 

            The Oil and Gas Conservation Commission met on October 28th at 10:00 a.m. in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for a hearing in Cause Nos. 232, 407, 499, and 112 (4 matters).

 

            Those present were:

 

                        Brian Cree                             Vice Chair

                        Lynn Shook                            Commissioner

                        Tom Ann Casey                    Commissioner

                        Michael Klish                         Commissioner

                        Tom Reagan                          Commissioner

                        Carol Harmon                        Assistant Attorney General

                        Rich Griebling                        Director

                        Brian Macke                          Deputy Director

                        Patricia Beaver                     Hearings Manager

 

            The Commission unanimously approved the amended minutes from the September 2002 meeting.

 

            Director’s Report:  Director Griebling provided a written report and discussed the following: The COGCC is on track for approving 2000 Applications for Permits-to-Drill for the year, which is running about 10% behind last year’s totals.  Ron Wackowski was thanked for the ChevronTexaco tour in Rangely Field.  Tricia Beaver provided testimony on behalf of the Commission at the Air Pollution Control Commission hearing for rulemaking.  Commissioner Casey asked about the Grand Valley air study.  Brian Macke responded and said that we have received a draft report from the Air Quality Control Division and will meet with staff later this morning to provide comments on the draft.  Williams Production RMT has ceased flaring at 85% of their wells in the Piceance Basin.  The Rulemaking draft for December has additional items for clean up and clarification.  No variances were granted this month because none were requested.

 

            Thom Kerr described the need for a policy on guarantees of performance as financial assurance.  COGCC staff believes this form of financial assurance is risky and difficult to evaluate.  State auditors had a concern that no process was in place for the review of guarantees of performance.  After several questions from the Commissioners were answered, a motion was made by Commissioner Reagan, and seconded by Commissioner Klish to adopt the proposed guarantee of performance policy.  The motion was approved unanimously.

 

Assistant Attorney General’s Report:  AAG Harmon informed the Commission that the 19 parties in the Delta County matter have amended their complaint to individually sue the Director and each Commissioner.  An opening brief has been filed in the Allen Oil and Gas state matter, which only challenges the court’s decision on two wells.  A response brief is due the third week in November in this matter.  Assistant Attorney General Harmon requested the Commission appoint Chair Sonnenberg to be the signatory on the settlement stipulation being negotiated with Martin Exploration Management Co.  Commissioner Klish made a motion to appoint Chair Sonnenberg to sign the Martin Exploration Management Company settlement stipulation, which was seconded by Commission Casey.  The Commission unanimously approved the motion.

 

Executive Director’s Report:  Representative Mark Larson has emailed a few of the Commissioners regarding the right-of-way issues with the Colorado Department of Transportaion (“CDOT”).  Shane Henry clarified that he did not speak on behalf of the Commissioners to decline Larson’s request to come before the Commission. The Coalbed Methane Water workshop will be held on November 20th in Trinidad.  A planning session is scheduled for this Wednesday.  Mr. Henry had the privilege to sit on the Energy Impact Commission on Greg Walcher’s behalf and was able to remind La Plata and Delta Counties that they continue to request money from the Energy Impact Assistance fund while remaining unhappy about oil and gas operations.  Kathleen Clark, Director of the Bureau of Land Management from Washington D.C., is in town this week. Director Griebling and Deputy Director Macke will make a presentation on oil and gas activity in Colorado to her and Shane Henry will tour the Piceance Basin with her.  Mary Marchun mentioned that a request to the Colorado Counties, Inc. (“CCI”) to have COGCC Commissioners meet with new County Commissioners is being handled and hopefully will be scheduled soon after the election.  The Executive Director’s office is setting up a pre-legislative meeting and will meet with the CCI on Wednesday to discuss their proposed legislation.  Director Griebling and Deputy Director Macke are preparing comments in response to this proposal.

 

Commissioner Comments:  Commissioner Casey mentioned the GORT meeting last week and the discussion on the fire policy.  An operator at the meeting asked if the COGCC could work with other agencies to develop a fire policy if needed in the future to ensure consistency.  The industry is concerned that there were approximately five policies in place.  Morris Bell explained that it is hard to coordinate a statewide policy with local issues.  He suggested that policies be developed early on to attempt consistency.

 

Cause Nos. 499, 232 and 407, Docket No. 0209-SP-12, request for an order to establish a 160-acre drilling and spacing unit consisting of the NW¼ of Section 3, Township 4 North, Range 63 West, 6th P.M. for production of oil and gas from the Dakota, “J” Sand, Codell and Niobrara Formations and to pool all nonconsenting owners, was continued to December but will be withdrawn.

 

Cause No. 112, Docket No. 0210-UP-07, request for an order to pool all non-consenting owners in the N½ of Section 8U and Lots 1, 2, 3, & 4 of Section 5U, Township 34 North, Range 9 West,  N.M.P.M. for the drilling of the Koshak BA-A Well, was continued to December.

 

Consent Agenda:  The Commission unanimously approved the consent agenda, which included the following:

 

Cause No. 112, Docket No. 0210-AW-04, request for an order allowing up to four (4) additional wells to be drilled on certain 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde Formation with the permitted well to be located no closer than 660 feet from the boundaries, to stratigraphically define the Mesaverde Formation, to amend the well location setbacks for the Dakota Formation to coincide with the proposed amended setbacks for the Mesaverde Formation, and to authorize the Director, without additional notice and hearing or consent, to grant an exception to the well location setbacks up to and including 100 feet, but not beyond, to avoid archaeological sites.

 

Cause No. 499 and 232, Docket No. 0210-SP-13, request for an order to segregate the N½ of Section 31, Township 4 North, Range 63 West into two 160-acre drilling and spacing units was approved.

 

The meeting adjourned at 11:55 a.m.

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            The Secretary was therefore authorized to issue the following orders:

 

            Order No. 499-74 and 232-236, Wattenberg Field, Weld County:  Approves the request by United States Exploration to segregate the N½ of Section 31, Township 4 North, Range 63 West into two 160 acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Dakota and “J” Sand Formations.

 

            Order No. 112-168, Ignacio-Blanco Field, La Plata County:  Approves the request by Burlington Resources Oil and Gas Company, LP to drill up to four (4) additional wells to be drilled on certain 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde Formation with the permitted well to be located no closer than 660 feet from the boundaries, to stratigraphically define the Mesaverde Formation, to amend the well location setbacks for the Dakota Formation to coincide with the proposed amended setbacks for the Mesaverde Formation, and to authorize the Director, without additional notice and hearing or consent, to grant an exception to the well location setbacks up to and including 100 feet, but not beyond, to avoid archaeological sites.

 

Signed:

Patricia C. Beaver, Secretary

 

Approved:

Brian Cree, Vice Chair