BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF A WAIVER TO RULE 707. OF THE                             )                     CAUSE NO. 1

RULES AND REGULATIONS OF THE COLORADO OIL AND                       )

GAS CONSERVATION COMMISSION FOR WELLINGTON                         )                     ORDER NO. 1-82

OPERATING COMPANY, LARIMER COUNTY, COLORADO                        )

 

REPORT OF THE COMMISSION

 

                        This cause came on for hearing before the Commission at 8:30 a.m. on August 19, 1999, in Suite 801, the Chancery Building, 1120 Lincoln Street, Denver, Colorado, pursuant to the request made by Wellington Operating Company for a waiver of the Five Thousand dollar ($5,000) financial assurance for each excess inactive well as required in Rule 707.a.

 

FINDINGS

 

                        The Commission finds as follows:

 

                        1.  Wellington Operating Company (“Wellington”) 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.  Wellington has requested a waiver from the Five Thousand dollar ($5,000) financial assurance required in Rule 707.a. for each excess inactive well.  In accordance with Rule 707.a., Wellington has submitted a plan for Commission approval to utilize their inactive wells for: 1) enhanced recovery, 2) gas storage, 3) returning to production in a timely manner, or 4) plugging and abandonment on an acceptable schedule.

 

                        5.  Wellington currently operates a total of thirty-six (36) wells in Colorado.  Thirty-five (35) of these wells comprise the Wellington Unit located in Larimer County.  Of these wells, twenty (20) are active and sixteen (16) are currently inactive as defined in the 100 Series of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission.

 

                        6.  The original oil in place for the Wellington Unit is estimated at 75-85 million stock tank barrels.  The field has produced 8.75 million stock tank barrels of oil or about 10% of the original oil in place.  An estimated 66–76 million stock tank barrels of oil remains in place.  A successful enhanced oil recovery project would produce a significant amount of oil from the Wellington Unit.

 

                        7.  The Department of Energy (“DOE”) has installed and is currently testing an alternative technology for increasing oil production in the Wellington Unit.  The test involves the installation of a downhole hammer which is used as a seismic formation stimulation device.  The test period will expire in 1999.  If this technology proves successful, the existing wellbores would be essential to implement a successful enhanced oil recovery project in the Wellington Unit.

 

                        8.  The Wellington Unit gas cap produced about 7 billion cubic feet (“BCF”) of gas and the entire unit has produced over 30 BCF.  The Wellington Unit has the potential to be utilized as a gas storage field to due its reservoir characteristics and nearby locations to interstate pipelines.  The existing wellbores in the unit would be essential to implement a successful gas storage project.

 

                        9.  Wellington has agreed to implement a secondary oil recovery project in the Wellington Unit to recover additional oil reserves or begin gas storage operations by September 1, 2000.  If the pilot secondary oil recovery project or gas storage operations are not initiated by September 1, 2000, Wellington will submit an additional Five Thousand dollars ($5,000) per inactive well as required by Rule 707.a. by December 1, 2000.

 

                        10.  The waiver of Rule 707.a. to require additional financial assurance for inactive wells is necessary to preserve the wellbores for secondary recovery or gas storage in the Wellington Unit and to promote the development of oil and gas reserves in the state.

 

                        11.  Wellington has submitted Thirty Thousand dollars ($30,000) of financial assurance in compliance with Rule 706.

 

ORDER

 

                        NOW, THEREFORE, IT IS ORDERED, that Wellington Operating Company shall implement a secondary oil recovery project in the Wellington Unit to recover additional oil reserves or begin gas storage operations by September 1, 2000.  If the pilot secondary oil recovery project or gas storage operations are not initiated by September 1, 2000, Wellington Operating Company shall submit an additional Five Thousand dollars ($5,000) per inactive well as required by Rule 707.a.

 

                        IT IS FURTHER ORDERED, that Wellington Operating Company shall submit to the Colorado Oil and Gas Conservation Commission a written report detailing the status of this project by September 1, 2000.

 

                        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 August, 1999 as of August 19, 1999

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                          OF THE STATE OF COLORADO

 

 

                                                                        By                                                                      

                                                                                   Patricia C. Beaver, Secretary

 

 

Dated at Suite 801

1120 Lincoln St.

Denver, Colorado 80203

August 31, 1999