IN THE MATTER OF THE PROMULGATION AND
CAUSE NO. 315
ESTABLISHMENT OF FIELD RULES TO GOVERN
OPERATIONS IN THE VERNON FIELD,
ORDER NO. 315-6
YUMA COUNTY, COLORADO
CORRECTED
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on July 12, 1999, at 8:30
a.m. in Suite 801, 1120 Lincoln Street, Denver, Colorado on the verified
application of Mountain Petroleum Corporation for an order to allow additional
wells to be drilled and completed for the production of gas and associated
hydrocarbons from the Niobrara Formation, on certain 160-acre drilling and
spacing units at the option of the operator for the lands in the Vernon Field.
FINDINGS
The Commission finds as follows:
1. Mountain Petroleum Corporation (“Mountain Petroleum”) 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 the 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.
4. On January 17, 1977, the Commission issued Order No. 315-1, which established
640-acre drilling and spacing units for the production of gas and associated
hydrocarbons from the Niobrara Formation with the permitted well to be located
no closer than 990 feet from the unit boundary underlying certain lands in the
Vernon Field. The spaced area was extended by Order No. 315-2 issued November
17, 1977. By Order No. 315-3, dated August 22, 1978 and upheld by Order No.
315-4 dated September 9, 1981, the size of the drilling and spacing units within
the spaced area was reduced to 160-acres with the permitted well to be located
no closer than 900 feet from the unit boundaries for the below-listed lands:
Township 1 South, Range 44 West, 6th P.M.
Sections 3 thru 10; Sections 16 thru 21;
27 thru 34
Township 2 South, Range 44 West, 6th P.M.
Sections 3 thru 6
Township 1 North, Range 44 West, 6th P.M.
Sections 32 and 33
5. On May 17, 1999, Mountain Petroleum Corporation, by its attorney, filed with
the Commission a verified application for an order to allow additional wells to
be drilled and completed for the production of gas and associated hydrocarbons
from the Niobrara Formation, on 160-acre drilling and spacing units at the
option of the operator for the below-listed lands. Subsequent wells shall be
located no closer than 560 feet from the outer boundaries of said 160-acre
drilling and spacing unit. The Director shall be allowed to grant an exception
location without prior notice or hearing upon an adequate showing by the
applicant that topography makes it unreasonable to drill the second well within
a 560 feet setback, but no closer than 380 feet from the boundary of the
drilling and spacing unit, and requests for any other exception location may be
granted in accordance with Rule 318.
Township 1 South, Range 44 West, 6th P.M.
Section 29: E ˝
Section 31: All
Section 32: All
Section 33: W ˝
Township 2 South, Range 44 West, 6th P.M.
Section 5: N ˝
6. On May 20, 1999 at the request of Yuma County, a local public forum was held
on the application. No comments were made on the application at the forum. A
written report on the forum was provided to the Commission recommending that no
additional conditions be placed on the application and that no public issues
hearing be held.
7. Testimony and exhibits presented at the administrative hearing described the
boundaries of the Vernon Field and the existing Niobrara Formation wells in the
area surrounding the application. Additional testimony and exhibits utilized a
structure map on the top of the Niobrara Formation to show that the Beecher
Island zone is a chalk formation located in the top of the Niobrara Formation.
Further, the Beecher Island zone of the Niobrara Formation is continuous across
the application area and is a common source of supply.
8. Testimony and exhibits presented at the administrative hearing indicated that
the average ultimate recovery for the existing wells in the application area is
50.8% of the original gas in place. In order to prevent waste and protect
correlative rights additional wells should be allowed within the established
drilling units to ensure efficient and economic incremental gas recovery from
the Niobrara Formation in the application lands. Further testimony indicated
that production from an additional well in the spacing unit would result in an
economic well.
9. At the time of the administrative hearing, Mountain Petroleum agreed to be
bound by oral order of the Commission.
10. Based on the facts stated in the verified application, having received no
protests and having been heard by the Hearing Officer who recommends approval,
the Commission should enter an order allowing one additional well to be drilled
on each 160-acre drilling and spacing unit for the lands described in Finding 5,
at the option of the operator, for the production of gas and associated
hydrocarbons from the Niobrara Formation.
ORDER
NOW, THEREFORE IT IS ORDERED that Order No. 315-3 is hereby amended to allow
additional wells to be drilled and completed for the production of gas and
associated hydrocarbons from the Niobrara Formation, on 160-acre drilling and
spacing units described below, at the option of the operator for the lands
described below. Subsequent wells shall be located no closer than 560 feet from
the outer boundaries of said 160-acre drilling and spacing unit.
Township 1 South, Range 44 West, 6th P.M.
Section 29: E ˝
Section 31: All
Section 32: All
Section 33: W ˝
Township 2 South, Range 44 West, 6th P.M.
Section 5: N ˝
IT IS FURTHER ORDERED that the Director shall be allowed to grant an exception
location without prior notice or hearing upon an adequate showing by the
applicant that topography makes it unreasonable to drill the second well within
a 560 feet setback, but no closer than 380 feet from the boundary of the
drilling and spacing unit, and requests for any other exception location may be
granted in accordance with Rule 318.
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.
ENTERED this 30th day of July, as of July 12, 1999.
AMENDED this 5th day of August, as of July 12, 1999.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By Dated at Suite 801 Patricia C. Beaver, Secretary 1120 Lincoln Street Denver, Colorado 80203 August 5, 1999.
(315#6)