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 McCLAVE FIELD, KIOWA COUNTY, COLORADO

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CAUSE NO. 105

 

ORDER NO. 105-42

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission at 10:00 a.m. on August 16, 2004 in the Birch Banquet Room, Ramada Inn & Suites, 124 W, 6th Street, Glenwood Springs, Colorado, after giving Notice of Hearing as required by law, on the verified application of Thomas L. Spring for an order to allow a second well to be drilled within the existing 640-acre drilling and spacing unit for Section 11, Township 21 South, Range 48 West, 6th P.M., for the production of gas and associated hydrocarbons from the McClave Sand Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.      Thomas L. Spring, 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 November 19, 1979, the Commission issued Order No. 105-23, which established 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the McClave Sand Formation underlying certain lands, including Section 11, Township 21 South, Range 48 West, 6th P.M., with the permitted well to be located no closer than 990 feet from the boundaries of the unit.

 

5.      On June 28, 2004, Thomas L. Spring, by its attorney, filed with the Commission a verified application for an order to allow a second well to be drilled within the existing 640-acre drilling and spacing unit for Section 11, Township 21 South, Range 48 West, 6th [sic] P.M., for the production of gas and associated hydrocarbons from the McClave Sand Formation.  One producing well has been drilled in the subject spacing unit, the JC State #32-11 Well, located in the SW¼ NE¼ of Section 11, Township 21 South, Range 48 West, 6th P.M., which was drilled and completed as a well capable of producing gas from the McClave Sand Formation.

 

6.      Testimony and exhibits presented at the administrative hearing showed that Thomas L. Spring purchased the JC State #32-11 Well from Samson Resources approximately ten (10) months ago and the well has casing leaks.  Additional testimony indicated that the proposed additional well is located equidistant from this well and the Pierson-State #1-10 Well in Section 10 operated by Thomas L. Spring.

 

7.      Testimony and exhibits presented at the administrative hearing also indicated that all of the leasehold owners have agreed to participate in the additional well.

 

8.      Testimony and exhibits presented at the administrative hearing indicated that the proposed additional well will be located in an irrigated alfalfa field, and that the surface owner has been notified and a surface use agreement will be negotiated prior to drilling the additional well.

 

9.      Testimony and exhibits presented at the administrative hearing showed that structure does not play a role in production in this area, and that eight (8) to twelve (12) feet of pay sand is anticipated to be found in the proposed additional well.

 

10.      Testimony and exhibits presented at the administrative hearing indicated that the normal decline of wells producing from the McClave Sand Formation is ten percent (10%) to twelve percent (12%), and that an additional well will produce approximately 275 MCFPD.

 

11.      Testimony and exhibits presented at the administrative hearing described that approximately two (2) to four (4) BCF is estimated to be recovered from each 640-acre drilling and spacing unit in the McClave Field, showing that is economic to drill an additional well.

 

12.      Testimony and exhibits presented at the administrative hearing summarized the need to drill an additional well, including volumetrics [sic] calculations, showing that 0.72 BCF of gas remains to be recovered from Section 11 by the proposed additional well.

 

13.      At the time of the administrative hearing, Thomas L. Spring agreed to be bound by an oral order of the Commission.

 

14.      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 a second well to be drilled within the existing 640-acre drilling and spacing unit for Section 11, Township 21 South, Range 48 West, 6th P.M., for the production of gas and associated hydrocarbons from the McClave Sand Formation.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED, that Order No. 105-1 is hereby amended to allow a second well to be drilled within the existing 640-acre drilling and spacing unit for Section 11, Township 21 South, Range 48 West, 6th P.M., for the production of gas and associated hydrocarbons from the McClave Sand Formation.

 

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.

 

IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.

 

IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.

 

ENTERED this 9th day of September 2004, as of August 16, 2004.

 

 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

September 8, 2004