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BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE IGNACIO-BLANCO FIELD, FRUITLAND COAL FORMATION, LA PLATA AND ARCHULETA COUNTIES, COLORADO
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CAUSE NO. 112
ORDER NO. 112-122 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on January 18, 1996 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 application of Amoco Production Company, for an order approving a certain Unit Agreement and Unit Operating Agreement for the Ignacio-Blanco Field, providing for unit operations and development of the reservoir consisting of the Fruitland Coal Formation underlying certain lands in La Plata and Archuleta Counties, Colorado.
FINDINGS
The Commission finds as follows:
1. Amoco Production Company 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 June 15, 1988, the Commission issued Order No. 112‑60 which established 320‑acre drilling and spacing units for the production of gas and associated hydrocarbons from the Fruitland coal seams, underlying certain lands in the Ignacio‑Blanco Field with the units to consist of a governmental half section and the permitted well to be located no closer than 990 feet from the boundaries of the quarter section.
5. The unitized Fruitland Coal Formation is identified as the stratigraphic interval between the depths of 3,078 feet and 3,210 feet as found on the Gamma-Ray-Density Log for the Southern Ute 29-1 Unit 2 Well located in the SE¼ of Section 29, Township 33 North, Range 6 West, N.M.P.M., La Plata County, and as so encountered, is a common source of supply and has been defined and determined by drilling to be productive underlying the following described lands in the Tiffany (Fruitland) Unit Area:
Township 33 North, Range 6 West, N.M.P.M.
Sections 17 - 21: All
Section 27: W½
Sections 28 - 34: All
Township 33 North, Range 7 West, N.M.P.M.
Section 12: S½
Section 13: All
Section 14: E½
Section 24: All
Archuleta and La Plata Counties
6. The terms and conditions provided by the Tiffany (Fruitland) 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, 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.
7. 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 Tiffany (Fruitland) 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 Tiffany (Fruitland) 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.
8. A Protest to the Application was filed by Petrogulf Corporation, Alberta Pargin and other royalty interests. A notice of intent to protest and/or intervene was filed by the San Juan Citizens Alliance.
9. At the time of the hearing, testimony was presented by the Applicant and the protestant, with comments from the San Juan Citizens Alliance and the Southern Ute Indian Tribe.
10. Based on the facts stated in the Application, and testimony and exhibits presented at the hearing, the Commission should enter an order approving the Tiffany (Fruitland) Unit Agreement and Unit Operating Agreement.
11. At the time of the hearing, Amoco Production Company agreed to make application for a hearing before the Colorado Oil and Gas Conservation Commission should a unit expansion be proposed covering lands over which the Commission has jurisdiction.
12. The effective date of the unit should be upon obtaining written approval of at least eighty percent (80%) of the cost-bearing interests and eighty percent (80%) of the royalty interests, and on the first day of the calendar month next following the approval of the Unit Agreement and Unit Operating Agreement by the Secretary of the Interior or his duly authorized delegate.
ORDER
NOW, THEREFORE, IT IS ORDERED, that:
1. The Tiffany (Fruitland) Unit Agreement and Unit Operating Agreement, covering lands in the Ignacio-Blanco Field, 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 unitized Fruitland Coal Formation is identified as the stratigraphic interval between the depths of 3,078 feet and 3,210 feet as found on the Gamma-Ray-Density Log for the Southern Ute 29-1 Unit 2 Well located in the SE¼ of Section 29, Township 33 North, Range 6 West, N.M.P.M., La Plata County, and as so encountered, is a common source of supply and has been defined and determined by drilling to be productive underlying the following described lands in the Tiffany (Fruitland) Unit Area:
Township 33 North, Range 6 West, N.M.P.M.
Sections 17 - 21: All
Section 27: W½
Sections 28 - 34: All
Township 33 North, Range 7 West, N.M.P.M.
Section 12: S½
Section 13: All
Section 14: E½
Section 24: All
Archuleta and La Plata Counties
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. Amoco Production Company shall make application for a hearing before the Colorado Oil and Gas Conservation Commission should a unit expansion be proposed covering lands over which the Commission has jurisdiction.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective upon obtaining written approval of at least eighty percent (80%) of the cost-bearing interests and eighty percent (80%) of the royalty interests, and on the first day of the calendar month next following the approval of the Unit Agreement and Unit Operating Agreement by the Secretary of the Interior or his duly authorized delegate, and that the Unit Operator shall submit all documentation required including Form 10, Certificate of Clearance, for each well, 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 day of , 1996, as of January 18, 1996.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado
February 9, 1996