BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE McCLAVE FIELD, KIOWA COUNTY, COLORADO

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CAUSE NO. 105

 

ORDER NO. 105-44

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission at 9:00 a.m. on May 8, 2008, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to approve the Abrams #11-1 Well proposed to be located 660 feet FNL and 660 feet FEL in the NE¼ NE¼ of Section 11, Township 20 South, Range 49 West, 6th P.M., for the production of gas and associated hydrocarbons from the McClave Sand Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.      Strachan Exploration, Inc. (“Strachan”), as applicant herein, is an interested party in the subject matter of the above‑referenced hearing.

 

2.      Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

 

3.      The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order pursuant to the Oil and Gas Conservation Act.

 

4.      On May 15, 1957 the Commission issued Order No. 105-1, which among other things, established 640-acre drilling and spacing units for certain lands including Section 11, Township 20 South, Range 49 West 6th P.M., for the production of gas and associated hydrocarbons from the McClave Sand Formation.

 

5.      On April 26, 1960, the Commission issued Order No. 105-2, which changed the location of the permitted well to require it to be located within a radius of 990 feet from the center of the 640-acre drilling and spacing unit, for certain lands including Section 11, Township 20 South, Range 49 West, 6th P.M.   Subsequent orders issued between April 17, 1973, and June 2, 1998, allowed 30 wells to be drilled as exception locations in the McClave Field.

 

6.      On March 3, 2008, Strachan filed with the Commission a verified application for an order to approve the Abrams #11-1 Well to be located 660 feet FNL and 660 feet FEL in the NE¼ NE¼ of Section 11, Township 20 South, Range 49 West, 6th P.M., for the production of gas and associated hydrocarbons from the McClave Sand Formation.  Two wells have been drilled in the spacing unit:  the McClave State #1 Well, located in the SE¼ SE¼ (330 feet FSL, 330 feet FEL) of Section 11, Township 20 South, Range 49 West, 6th  P.M., was completed in the McClave Sand in October, 1952, and plugged and abandoned in 1968 after producing 130 MMCF of gas; and the State Pyles Calvert #1 Well, located in the SW¼ NE¼ (1980 feet FNL, 1980 feet FEL) of Section 11, Township 20 South, Range 49 West, 6th P. M., was completed in the McClave Sand in February, 1972, and plugged and abandoned with a casing leak in May, 2007 after producing 120 MMcf of gas.

 

7.      On April 28, 2008, Strachan filed with the Commission a written request to approve the application based on the merits of the verified application and the supporting exhibits.  Sworn written testimony and exhibits were submitted in support of the application.

 

8.      Testimony and exhibits submitted in support of the application showed that Strachan proposes to drill the Abrams #11-1 Well at the proposed exception location to optimize recovery of reserves from the McClave Sand Formation based upon geologic considerations.

 

9.      Testimony and exhibits submitted in support of the application showed that in order to prevent waste and protect correlative rights of all owners in the area surrounding the proposed location, it is reasonable and equitable to permit an exception location to allow the drilling of a well in the described location.  Strachan also asserts that Rule 318.c. of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission provides for exception locations when geologic, topographical or environmental conditions warrant a variance from field rules.

 

10.      Testimony and exhibits showed that waivers were requested from all contiguous and cornering [sic] owners in lands toward whom the well is proposed to be moved who are affected by the exception location.  Waivers have not been obtained but no party from whom a waiver is sought filed a formal protest to the request.

 

11.      Testimony and exhibits submitted indicate that Strachan has complied with the requirements of Rule 318.c., and is entitled to a variance for this exception location application.

 

12.      The above-referenced testimony and exhibits show that the proposed exception location will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.

 

13.      Strachan Exploration, Inc. agreed to be bound by oral order of the Commission.

 

14.      Based on the facts stated in the verified application, having received no protests, and based on the Hearing Officer review of the application under Rule 511.b., the Commission should enter an order to approve the Abrams #11-1 Well to be located 660 feet FNL and 660 feet FEL in the NE¼ NE¼ of Section 11, Township 20 South, Range 49 West, 6th P.M., for the production of gas and associated hydrocarbons from the McClave Sand Formation.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED, that the Abrams #11-1 Well is hereby approved to be located 660 feet FNL and 660 feet FEL in the NE¼ NE¼ of Section 11, Township 20 South, Range 49 West, 6th P.M., for the production of gas and associated hydrocarbons from the McClave Sand Formation.

 

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

 

IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

 

IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.

 

IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.

 

ENTERED this 28th day of May, 2008, as of May 8, 2008.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By  Patricia C. Beaver, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado  80203

May 28, 2008