IN THE MATTER OF THE PROMULGATION
CAUSE NO. 406
AND ESTABLISHMENT OF FIELD RULES
TO GOVERN OPERATIONS IN THE CAMPO
ORDER NO. 406-6
FIELD, BACA COUNTY, COLORADO
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on July 1, 1997 at 8:30
a.m. in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado,
after giving Notice of Hearing as required by law, on the verified application
of OXY USA Inc, for an order approving a unit agreement and unit operating
agreement for the Lansing “D” Sand Unit for certain lands located in Sections 1
and 12, Township 35 South, Range 46 West, 6th P.M. and providing for unit
operation and development of the Pennsylvanian Lansing "D" Sandstone Formation
underlying the below-listed lands and approving secondary recovery by injection
of fluids into said Lansing "D" Sandstone Formation.
FINDINGS
The Commission finds as follows:
1. OXY USA Inc, 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.
4. On October 17, 1983, the Commission issued Order No. 406-1 which established
40 acre drilling and spacing units for production of oil and associated
hydrocarbons from the Lansing Sandstone Formation, with the permitted well to be
located in the center of the quarter-quarter section with a tolerance of 200
feet in any direction for the below-listed lands in Campo Field:
Township 34 South, Range 46 West, 6th P.M.
Section 34: E½
Section 35: All
Section 36: All
Township 35 South, Range 46 West, 6th P.M.
Section 1: All
Section 2: All
Section 3: NE¼
Section 12: N½
5. Subsequent orders removed the below-listed lands from Order No. 406-1 and
approved unit operations for the Lansing “C” Sandstone Formation:
Township 35 South, Range 46 West, 6th P.M.
Section 1: SW¼SW¼
Section 2: SE¼, SE¼SW¼
Section 11: NE¼NW¼, NE¼, N½SE¼, SE¼SE¼
Section 12: W½W½, NE¼SW¼
Township 34 South, Range 46 West, 6th P.M.
Section 34: S½ SE¼, S½ N½ SE¼
Section 35: S½ SW¼, S½ N½ SW¼
SW¼ SE¼, Lots 7 and 8
Section 36: Lots 16 and 17
Township 35 South, Range 45 West, 6th P.M.
Section 6: Lots 9 and 10
Township 35 South, Range 46 West, 6th P.M.
Section 1: W½, SE¼, S½ NE¼, and Lot 2
Section 2: SE¼ NE¼, N½ SW¼ NE¼
Lots 1, 2, 3 and 4
Section 12: N½ NE¼ NW¼, N½ NW¼ NE¼
containing 1300.5 gross acres, more or less.
6. The Pennsylvanian Lansing "D" Sandstone Formation was encountered in the
stratigraphic interval between the stratigraphic depths of 3,972 feet and 3,985
feet in the Comanche Federal C-2 Well (now the SECU #1202-W Well) located in the
SW¼SE¼ of Section 1, Township 35 South, Range 46 West, 6th P.M., as so
encountered, is a common source of supply and has been defined and determined by
drilling to be productive underlying the following lands:.
Township 35 South, Range 46 West, 6th P.M.
Section 1: , S½SW¼, SW¼SE¼, W½SE¼ SE¼
Section 12: NE¼NW¼, E½NW¼NW¼, NW¼NE¼,
N½ SW¼NE¼, SE¼NW¼.
7. The terms and conditions provided by the S.E. Campo Unit Agreement and Unit
Operating Agreement meet the requirements of the statute and are just and
reasonable to all interests contained within said unit area. The plan for unit
operations as presented by the Applicant, providing for a secondary recovery
program by the injection of water into the Lansing "D" Formation reservoir
underlying the S.E. Campo Unit Area, as described herein is necessary to
increase the ultimate recovery of oil and gas and the value of the estimated
additional recovery of oil and gas exceeds the estimated additional cost
incident to conducting such operations.
8. The provisions contained in said Unit Agreement and Unit Operating Agreement
are just and reasonable and include the following:
a. The description of the pool to be so operated;
b. The nature of said operation:
c. The allocation to the separately owned tracts in the S.E. Campo Unit Area of
all the oil and gas that is produced from said Unit Area and is saved;
d. The provision for the credits and charges to be made in the adjustment among
the owners in the S.E. Campo Unit Area for their respective investments in
wells, tanks, pumps, machinery, materials, and equipment contributed to the unit
operations;
e. The provision providing how the costs of unit operations, including capital
investments, shall be determined and charged to the separately owned tracts, and
how said costs shall be paid, including the provision providing when, how, and
by whom the unit production allocated to an owner who does not pay the share of
the cost of unit operations charged to such owner, or the interest of such
owners, may be sold and the proceeds applied to the payment of such costs;
f. The provision for the supervision and conduct of the unit operations, in
respect to which person shall have a vote with a value corresponding to the
percentage of the costs of unit operations chargeable against the interest of
such person; and
g. The time when the unit operations shall commence, and the manner in which,
and the circumstances under which the unit operations shall terminate.
9. One protest to the Application was received from Culver W. Van Der Jagt and
Grant D. Van Der Jagt, overriding royalty owners. This protest was later
withdrawn.
10. At the time of the administrative hearing before the Commission, OXY USA
Inc. indicated that they own 100 percent (100%) of the working interests and
that ninety-nine point two percent (99.2%) of the non-cost bearing interests had
approved in writing the aforementioned plan of unit operations.
11. Cause No. 406 should be amended to remove the lands described in Finding No.
5 from the provisions of the Campo Field.
12. That at the time of the administrative hearing, OXY USA, Inc. agreed to be
bound by verbal order of the Commission.
13. Based on the facts stated in the application, having received no protests to
the application, and having been heard by the Hearing Officer who recommends
approval, the Commission should enter an order approving the S.E. Campo Unit
Agreement and Unit Operating Agreement becoming effective as of July 1, 1997.
ORDER
NOW, THEREFORE, IT IS ORDERED, that:
1. The S.E. Campo Unit Agreement and Unit Operating Agreement, covering lands in
the S.E. Campo Unit Area, which agreements are attached to, and made a part of
the original order of this Commission on file in the office of the Commission,
are approved as being in the public interest for conservation.
2. The Pennsylvanian Lansing "D" Sand reservoir, common source of supply,
underlies the following lands in Baca County, Colorado:
Township 35 South, Range 46 West, 6th P.M.
Section 1: , S½SW¼, SW¼SE¼, W½SE¼ SE¼
Section 12: NE¼NW¼, E½NW¼NW¼, NW¼NE¼,
N½ SW¼NE¼, SE¼NW¼.
3. The provisions contained in said Unit Agreement and Unit Operating Agreement
as they pertain to §34-60-118, C.R.S., as amended, of the Oil and Gas
Conservation Act are just and reasonable, and are incorporated herein as the
Commission's plan of involuntary unit operations for such lands.
4. The secondary recovery project by the injection of water into the Lansing "D"
Sandstone Formation of said Unit Area, as presented by the applicant, is hereby
approved as being necessary to increase the ultimate recovery from said
reservoir.
5. Any injection well to be located in the Unit Area shall be approved by the
Director in accordance with the rules and regulations of the Commission.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall
become effective as of July 1, 1997.
IT IS FURTHER ORDERED, that the Unit Operator shall submit documentation
required within thirty (30) days of the effective date, and further that the
Unit Operator shall advise the Commission in writing as to the termination of
the unit.
IT IS FURTHER ORDERED, that the Commission expressly reserves it rights, after
notice and hearing, to alter, amend or repeal any and/or all of the above
orders.
ENTERED this 18th day of July, 1997, as of July 1, 1997.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By Patricia C. Beaver, Secretary
Dated at Suite 801, 1120 Lincoln Street, Denver, Colorado July 18, 1997
(406-6)