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 LOST CREEK FIELD,

WELD COUNTY, COLORADO     

 

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CAUSE NOS. 307 and 1

 

ORDER NOS. 307-2 and 1-40

(Formerly 1-151)

 

 

                                                             REPORT OF THE COMMISSION

 

                        This cause came on for hearing before the Commission on July 19, 1993, in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of Energy Minerals Corporation, for an order to amend Cause No. 304 and grant an exception to Rule 316 of the Rules and Regulations of the Commission to allow a well to be drilled at an exception location for commingled production from the "J" and "D" Sand Formations.

 

                                                                                 FINDINGS

 

                        The Commission finds as follows:

 

                        1.  Energy Minerals Corporation as applicant herein, are interested parties 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.  In Order No. 307-1 issued February 17, 1976, the Commission established 160-acre drilling and spacing units for the production of gas from the "J" Sand Formation, including Section 32, Township 3 North, Range 62 West, 6th P.M.  Said units consist of a quarter section, with the permitted well for each unit located not less than 600 feet from the boundary of each quarter section and no closer than 1850 feet from another gas well producing from the same source of supply.

 

                        5.  Rule 316 of the Rules and Regulations of the Commission requires that wells drilled in excess of 2,500 feet in depth shall be located not less than 600 feet from any lease line and no closer than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply, unless waivers from the mineral owners or leasehold owners toward whom the well is to be moved are provided.  The "D" Sand Formation in Section 32, Township 3 North, Range 62 West, 6th P.M. is included in this Rule.

 

                        6.  This matter was heard by the Hearing Officers who recommend approval based upon the testimony presented at the administrative hearing that an exception to the permitted well location is necessary to encounter the hydrocarbon-bearing zones and to avoid interference with a center pivot sprinkler system in place at the permitted location.

 

                        7.  No objections to the application were received and an order of the Commission should be entered allowing the Hobe State No. 42-32 Well to be drilled at an exception location 1930 feet FNL and 400 feet FEL in the SE1/4 NE1/4 of Section 32, Township 3 North, Range 62 West, 6th P.M. for commingled production from the "J" Sand and "D" Sand Formations.

 

                        8.  Engineering testimony presented indicated that prudent production engineering practices would allow commingled production from the two reservoirs resulting in increased recovery of reserves and no irremediable reservoir damage.

 

                                                                                   ORDER

 

                        NOW, THEREFORE, IT IS ORDERED, that Order No. 307-1 shall be amended and an exception to Rule 316 of the Rules and Regulations of the Commission shall allow the Hobe State No. 42-32 Well to be drilled at an exception location 1930 feet FNL and 400 feet FEL in the SE1/4 NE1/4 of Section 32, Township 3 North, Range 62 West, 6th P.M. for commingled production from the "J" Sand and "D" Sand Formations.

                        IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

 

                        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              day of July, 1993, as of July 19, 1993.

 

                       

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                               OF THE STATE OF COLORADO

 

 

                                                                        By                                                             

                                                                                     Patricia C. Beaver, Secretary

 

Dated at Suite 380

1580 Logan Street

Denver, Colorado  80203

July 30, 1993