BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                              OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION                         )               CAUSE NO. 105

AND ESTABLISHMENT OF FIELD RULES TO                       )

GOVERN OPERATIONS IN THE MCCLAVE                                          )  ORDER NO. 105-41

FIELD, KIOWA COUNTY, COLORADO                                   )              

 

REPORT OF THE COMMISSION

 

                        This cause came on for hearing before the Commission on February 13, 2001 at 8:00 a.m., in the Trinidad and Raton Rooms, the Holiday Inn Trinidad, 3125 Toupal Drive, Trinidad, Colorado, after giving Notice of Hearing as required by law, on the verified application of Louis Dreyfus Natural Gas Corporation for an order to allow an additional well to be drilled at a location in compliance with Rule 318.a. on the 640-acre drilling and spacing unit consisting of Section 32, Township 20 South, Range 48 West, 6th P.M. for production of gas from the McClave Sand.

 

FINDINGS

 

                        The Commission finds as follows:

 

                        1.  Louis Dreyfus Natural Gas Corporation (“Dreyfus”), 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 May 15, 1957, the Commission entered Order No. 105-1, establishing 640-acre drilling and spacing units for the production of oil and associated hydrocarbons from the McClave Sand underlying certain lands in the McClave Field, including Section 32, Township 20 South, Range 48 West, 6th P.M., with one well authorized within a radius of 990 feet of the center of each section.  The Woolfolk “A” No. 1 Well was drilled in 1959 and currently produces from the McClave Sand in Section 32.

 

                        5.  On December 21, 2000, Dreyfus, through its attorney, filed with the Commission a verified application for an order to allow an additional well to be drilled at a location in compliance with Rule 318.a. on the 640-acre drilling and spacing unit consisting of Section 32, Township 20 South, Range 48 West, 6th P.M. for production of gas from the McClave Sand.  The Applicant believes the existing well cannot drain recoverable gas reserves from the unit.

 

                        6.  Testimony and exhibits presented at the administrative hearing described the ownership of the working interests and the minerals in the application lands.

 

                        7.  Testimony and exhibits presented at the administrative hearing described the geology in the area and the average thickness of the productive McClave Sand.

 

                        8.  Testimony and exhibits presented at the administrative hearing estimated the ultimate recovery from the Woolfolk State #1 Well to be 6.99 BCF with an average daily production of 130 MCF indicating that the well is not efficiently producing the 640-acre unit.

 

                        9.  Testimony and exhibits presented at the administrative hearing estimated the remaining gas to be recovered from the proposed additional well to be between 0.4 BCF and 1.1 BCF.

 

                        10.  Further testimony and exhibits presented at the administrative hearing showed an additional well will be economic and is necessary to prevent waste, recover additional reserves and protect correlative rights.

 

                        11.  At the time of the administrative hearing, Dreyfus agreed to be bound by oral order of the Commission.

 

                        12.  Based on the facts stated in the verified application, having received no protests to the application and having been heard by the Hearing Officer who recommended approval, the Commission should enter an order to allow an additional well to be drilled at a location in compliance with Rule 318.a. on the 640-acre drilling and spacing unit consisting of Section 32, Township 20 South, Range 48 West, 6th P.M. for production of gas from the McClave Sand.

 

ORDER

 

                        NOW, THEREFORE IT IS ORDERED that Order No. 105-1 is hereby amended to allow an additional well to be drilled at a location in compliance with Rule 318.a. for the production of gas from the McClave Sand on the 640-acre drilling and spacing unit consisting of Section 32, Township 20 South, Range 48 West, 6th P.M.

 

                        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 February 2001, as of February 13, 2001.

 

 

                                                                     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

February 16, 2001