The Oil and Gas Conservation
Commission met on July 12, 2004 at 9:00 a.m. in Suite 801, The Chancery
Building, 1120 Lincoln Street, Denver, Colorado, for a hearing in Cause Nos. 1V
(4 matters), 1, 112 (2 matters), and 510.
Those
present were:
Peter
Mueller Chair
Brian
Cree Vice
Chair
John
Ashby Commissioner
Tom
Ann Casey Commissioner
Mike
Klish Commissioner
Tom
Reagan Commissioner
Lynn
Shook Commissioner
Carol
Harmon Assistant Attorney General
Brian
Macke Acting
Director
Patricia
Beaver Hearings Manager
Morris
Bell Operations
Manager
The Commission unanimously approved
the minutes from the May hearing.
Executive
Director’s Report: Shane Henry,
Department of Natural Resources (“DNR”) Assistant Executive Director - The
Executive Director’s Office (“EDO”) will be working to fill the vacant
Director’s position. The job
announcement will be posted today for a twenty day period. Resumes will be reviewed to determine the
candidates who will then be required to take a test.
Director’s Report:
Acting Director Macke provided a written report and discussed the
following: At least 2700 Applications
for Permit-to-Drill (”APD”) are expected to be approved this year. One-third of the APDs are in
Commissioner Ashby would like a detailed account of
how the seep occurred and how the circumstance will be prohibited in the future
through operational means to be addressed at the August hearing.
There will be a presentation by Tony Gorody and Debbie
Baldwin on
Acting Director Macke introduced the new COGCC
employees; Wendy Schultz, budget analyst, Elaine Winick, permitting technician
and Dennis Ahlstrand, permitting technician.
The Commissioners received a confidential packet on the Outstanding
Operations Award nominations. They will
respond to the nominations by
Assistant
Attorney General’s Report: AAG Harmon
provided a written confidential litigation memo. The court certified the Motion on Summary Judgment
as final in the Gunnison County vs. BDS case, which can now go up for
appeal. The St. Vrain Record was filed
on July 9th with the court.
An email was sent to the Commissioners regarding conflicts counsel that
will advise the Commissioners at the August Order Finding Violation hearing and
AAG Harmon will advise COGCC staff. AAG
Harmon discussed her IOGCC participation in a recent conference call.
Commissioner
Comments: Commissioner Reagan commented
on the number of items appearing on the docket in which operators have violated
COGCC rules. Operations Manager Bell
indicated it is more of a problem due to the high activity level. Chair Mueller thanked AAG Harmon and Hearings
Manager Beaver for meeting with the Town of
Audience
Comments: Ken Wonstolen, COGA, discussed
the amount of media coverage regarding oil and gas activity. He described several emerging issues such as
split estates and local regulation. He
suggested press releases be sent out by the COGCC regarding some of the
activity graphs. There has been positive
press on the EPA hydraulic fracing report.
July 31st is the COGA summer board meeting party at Joe
Jagger’s house in Evergreen. All of the
Commissioners have been invited to the COGA/RMS-AAPG Conference. Fraudulent reporting is subject to criminal
penalties. COGA’s general belief is that
no Commissioner should attend either prehearing conferences or administrative
hearings unless there are a number of procedural issues that need to be ruled
on, in which case the Chair or Vice Chair should preside. The federal rulemaking on pipeline regulation
should be final by the end of the year and once this is done, the Commission
may want to look at establishing rules for areas not regulated by the federal
government. COGA may recommend adopting
a proposal made during the COGA/CCI workgroup for the Commissioners’ or COGCC
staff’s consideration. Garfield County’s
Board of Commissioners may be considering pipeline regulations in September. Oil and gas operators are installing enclosed
flares in the Wattenberg Field to address ozone levels. Hearings Manager Beaver thanked Mr. Wonstolen
and COGA for sending two email reminders to oil and gas operators regarding LGD
participation.
Mike
Wozniak, attorney – Mr. Wozniak agrees with COGA from an industry perspective on
Commissioner participation at prehearing conferences. He stated that many of the farmers and
ranchers on his oil and gas clients’ minerals are objecting to the installation
of enclosed flares because of the visual impacts. He has three clients who have received
invoices with delinquent charges for inspection fees from the Town of
Frederick.
The
presentation by Tony Gorody and COGCC Environmental Protection Specialist
Debbie Baldwin showed that ground water has been sampled both before and after
the increased density orders in the San Juan Basin were approved by the
Commission. Drilling of additional wells
has had no detectable impact on the dissolved methane concentrations found in
ground water in the San Juan Basin of Colorado.
The presentation will be placed on the COGCC website and will be given
at the GORT meeting in August.
COGCC
staff member David Dillon discussed the state statute on noise and the current
COGCC regulations. He presented
Evergreen’s letter to COGCC Field Engineer John Duran. Richard Parry’s noise complaint was also
discussed. Ken Wonstolen of COGA stated
that the noise statute is a nuisance statute and COGCC enforcement comes from
the public health, safety and welfare provision of COGCC regulations. Mr. Wonstolen believes the regulations may be
amendable to residential standard where a residence is located. The COGCC staff will prepare a policy for the
Commission to review at the September hearing at the earliest.
Cause No. 1, Docket No. 0302-UP-01, request to
respond to the pending motions to dismiss the previously filed pooling
application and discovery requests for the University 9-1 Well was continued to
the August hearing.
Cause No. 112, Docket No. 0407-UP-04, request for an
order to pool all non-consenting owners in the E½ of Section 9, Township 34
North, Range 9 West, N.M.P.M. for the University 9-1 Well was continued to the
August hearing.
Cause No. 1, Docket No. 0407-EX-03, request for an
order allowing an exception to the permitted location for the Duncan #B-14 Well
to be located at a proposed location of 1531' FNL and 1167' FEL in Section 20,
Township 12 North, Range 100 West, 6th P.M. was continued to the August
hearing.
Cause No. 112, Docket No.
0407-AW-06, request for an order allowing a second well to be completed in the
320-acre drilling and spacing units consisting of the W½ of Sections 6 and 7,
Township 33 North, Range 6 West, N.M.P.M. at the discretion of the operator,
with the permitted well to be located in the center of the quarter section with
a tolerance of 200 feet in any direction was continued to the August hearing.
Cause No. 334, Docket No.
0407-EX-05, request for an order allowing an exception to the permitted
location for the Meyers 14-32 Well to be located at a proposed location of 995'
FSL and 450' FWL in Section 32, Township 10 North, Range 93 West, 6th P.M. was
continued to the August hearing.
Cause No. 509, Docket No.
0407-SP-09, request to rescind the 320-acre drilling and spacing units in
Sections 25-28 and 33-36, Township 16 South, Range 46 West, 6th P.M. and to
allow the lands to be developed pursuant to COGCC Rule 318. was continued to
the August hearing.
Consent
Agenda: The Commission unanimously
approved all matters on the consent agenda, which included the following:
Cause No. 112, Docket No. 0407-GA-03, request for an
order establishing that the existing permit for the Payne No. 1 Well located in
the NW¼ NE¼ of Section 17, Township 32 North, Range 6 West, N.M.P.M. be
clarified to authorize the operator to utilize the appropriate artificial lift
device which will maximize the economic and efficient production from the Payne
No. 1 Well and to conduct its operations without buried electrical lines
provided it is in compliance with existing Commission sound regulations.
Cause No. 112, Docket No.
0407-GA-04, request for an order to eliminate the production caps for certain
Fruitland coal seam wells located in certain sections of Townships 33 and 34
North, Ranges 8 and 9 West, N.M.P.M. so that the wells may produce in
accordance with their capacity.
Cause No. 510, Docket No.
0407-SP-10, request for an order to increase well density, the equivalent of 1
well per 10 acres, and change existing well setbacks in Rule 318.a. that apply
to certain lands in Townships 6 and 7 South, Ranges 96 and 97 West, 6th P.M.,
to allow wells to be located downhole anywhere in the drilling and spacing unit
but no closer than 100 feet from the boundaries, with no more than 1 multi-wellsite
per governmental quarter-quarter section for production of gas and associated
hydrocarbons from the Williams Fork Formation.
Cause No. 1, Docket No. 0407-EX-04,
request for an order to amend the setback requirements of Rule 318.a. that
apply to Sections 8, 17 and 20, Township 7 South, Range 92 West, 6th P.M. to
allow wells drilled deeper than 2,500 feet to be located no closer than 600
feet from the outer section lines with no more than 1 multi-wellsite per governmental
quarter-quarter section for production of oil, gas and associated hydrocarbons
from the Mesaverde Group.
Cause
No. 1V, Docket No. 0407-OV-23, request
for an Administrative Order by Consent finding Petroleum Development
Corporation in violation of Rules 301., 303.b. and §34-60-117.(1) of the Oil and Gas Conservation Act,
failure to provide written notice of intention to do work, to have an approved
Application for Permit-to-Drill or Application for Permit to Recomplete to the
Codell Formation and to protect correlative rights of all owners in every field
or pool and assessing a fine of five thousand dollars.
Cause No. 1V, Docket No. 0407-OV-24, request for an
Administrative Order by Consent finding EnCana Oil and Gas (USA) Inc. in
violation of Rule 303.b., failure to have an approved Application for Permit to
Recomplete to the Williams Fork Formation and assessing a fine of ten thousand dollars.
Cause No. 1V, Docket No. 0407-OV-25, request for an
Administrative Order by Consent finding Williams Production RMT Company in
violation of Rules 317.a., 327., Order No. 139-38 and the Notice attached to
the Application for Permit-to-Drill, failure to keep the PA 324-33 Well under
control at all times during the drilling process, to comply with Order No.
139-38 and to notify staff of the lost circulation zones and gas kicks and
assessing a fine of thirty thousand dollars.
Cause No. 1V, Docket No. 0407-OV-26, request for an
Administrative Order by Consent finding EnCana Energy Resources Inc. in
violation of Rules 301., 318A.a. and 318.c., failure to obtain Commission
approval for change of surface hole location and failure to obtain Commission
approval for change of bottom hole location, failure to located the Well in
accordance with the Greater Wattenberg Area well location setback rules and failure
to obtain a location exception for the Bangert #31-19 Well located in the NE¼
NE¼ of Section 19, Township 2 North, Range 66 West, 6th P.M. and assessing a
fine of twenty
thousand
dollars.
The
meeting adjourned at
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The Secretary was therefore authorized to issue the
following orders:
Order No. 1-106, Garfield County: Approves the request by EnCana Oil & Gas
(USA) Inc. for an order to amend the setback requirements of Rule 318.a. that
apply to Sections 8, 17 and 20, Township 7 South, Range 92 West, 6th P.M. to
allow wells drilled deeper than 2,500 feet to be located no closer than 600
feet from the outer section lines with no more than 1 multi-wellsite per governmental
quarter-quarter section for production of oil, gas
and associated hydrocarbons from the Mesaverde Group.
Order No. 112-174, Ignacio-Blanco Field, La Plata County: Approves the request by McElvain Oil &
Gas Properties, Inc. for an order
establishing that the existing permit for the Payne No. 1 Well located in the
NW¼ NE¼ of Section 17, Township 32 North, Range 6 West, N.M.P.M. be clarified
to authorize the operator to utilize the appropriate artificial lift device
which will maximize the economic and efficient production from the Payne No. 1
Well and to conduct its operations without buried electrical lines provided it
is in compliance with existing Commission sound regulations.
Order
No. 112-175, Ignacio-Blanco Field, La
Plata County: Approves the request by BP America Production
Co. for an order to eliminate the production caps for certain Fruitland coal
seam wells located in certain sections of Townships 33 and 34 North, Ranges 8
and 9 West, N.M.P.M. so that the wells may produce in accordance with their
capacity.
Order No. 510-11, Rulison Field, Garfield County: Approves the request by Petroleum Development
Corporation for an order to increase well density, the equivalent of 1 well per
10 acres, and change existing well setbacks in Rule 318.a. that apply to
certain lands in Townships 6 and 7 South, Ranges 96 and 97 West, 6th P.M., to
allow wells to be located downhole anywhere in the drilling and spacing unit
but no closer than 100 feet from the boundaries, with no more than 1
multi-wellsite per governmental quarter-quarter section for production of gas
and associated hydrocarbons from the Williams Fork Formation.
Order
No. 1V-272, Weld County: Approves the Administrative
Order by Consent finding Petroleum Development Corporation in violation of
Rules 301., 303.b. and §34-60-117.(1) of the Oil and Gas
Conservation Act, failure to provide written notice of intention to do work, to
have an approved Application for Permit-to-Drill or Application for Permit to
Recomplete to the Codell Formation and to protect correlative rights of all
owners in every field or pool, and assesses a fine of Five Thousand ($5,000)
dollars.
Order No. 1V-273,
Order No. 1V-274, Garfield County: Approves the Administrative Order by Consent finding Williams Production RMT Company in
violation of Rules 317.a., 327., Order No. 139-38 and the Notice attached to
the Application for Permit-to-Drill, failure to keep the PA 324-33 Well under
control at all times during the drilling process, to comply with Order No. 139-38
and to notify staff of the lost circulation zones and gas kicks, and assesses a fine of
Thirty Thousand ($30,000) dollars.
Order No. 1V-273, Rio Blanco County: Approves the Administrative Order by Consent finding EnCana Energy Resources Inc. in violation
of Rules 301., 318A.a. and 318.c., failure to obtain Commission approval for
change of surface hole location and failure to obtain Commission approval for
change of bottom hole location, failure to located the Well in accordance with
the Greater Wattenberg Area well location setback rules and failure to obtain a
location exception for the Bangert #31-19 Well located in the NE¼ NE¼ of
Section 19, Township 2 North, Range 66 West, 6th P.M., and assesses a fine of Twenty
Thousand ($20,000) dollars.
_________________________________
Patricia
C. Beaver, Secretary
Approved:
__________________________________
Peter M. Mueller, Chair