BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION AND

AND ESTABLISHMENT OF FIELD RULES TO

GOVERN OPERATIONS IN THE IGNACIO-BLANCO

FIELD, LA PLATA COUNTY, COLORADO

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CAUSE NO.   112

 

ORDER NO.   112-124

 

                                                              REPORT OF THE COMMISSION

 

                        This cause came on for hearing before the Commission on September 4, 1996 at 3:45 p.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 Cedar Ridge LLC, for an order amending Order No. 112-61 to allow the Southern Ute No. 2-5 Well located 2,150 feet FNL and 2,035 feet FWL in the SE¼ NW¼ of Section 5, Township 32 North, Range 11 West, N.M.P.M., currently producing from the Mesaverde Formation and operated by Red Willow Production Company, to be recompleted for production from the Fruitland Coal seams as an additional well for the 320-acre drilling and spacing unit consisting of the W½ of Section 5.

 

                                                                                 FINDINGS

 

                        The Commission finds as follows:

 

                        1.  Cedar Ridge LLC, 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 pursuant to the terms of a Memorandum of Understanding between the Commission and the Bureau of Land Management.

 

                        4.  On November 9, 1959, the Commission issued Order No. 112-6 establishing 320-acre drilling and spacing units for production from the Mesaverde Formation underlying certain lands in the Ignacio-Blanco Field, including Section 5, Township 32 North, Range 11 West, N.M.P.M.  Order No. 112-6 provided for the drilling of one well for the production of gas and associated hydrocarbons from the Mesaverde Formation.  On July 16, 1979, the Commission issued Order No. 112-46 authorizing the drilling of one additional well in each 320-acre drilling and spacing unit, which order also stated the permitted well shall be located 990 feet from the boundaries of the unit.

 

                        5.  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 including Section 5, Township 32 North, Range 11 West, N.M.P.M., with the units to consist of a governmental half section and the permitted well to be located in the NE¼ and the SW¼ of each section, no closer than 990 feet from the boundaries of the quarter section, nor closer than 130 feet to any interior quarter section line.  Order No. 112-61 was subsequently adopted amending Order No. 112-60 to establish additional field rules for the Fruitland Coal Formation.

 

                        6.  The Southern Ute No. 2-5 Well located 2,150 FNL and 2,035 feet FWL in the SE¼ NW¼ of Section 5 is currently producing from the Mesaverde Formation and operated by Red Willow Production Company.  The Southern Ute No. 6-5 Well operated by Cedar Ridge LLC and located 995 feet FSL and 1,445 feet FWL in the SE¼SW¼ of Section 5 is currently producing from the Fruitland Coal seams for the 320-acre drilling and spacing unit consisting of the W½ of Section 5.

 

                        7.  Protests to the application were filed by Kukui Operating Company and Burlington Resources Oil & Gas Company, and notices to intervene were filed by Amoco Production Company and Burlington Resources Oil & Gas Company.  On August 30, 1996, Kukui Operating Company filed a withdrawl of its protest.  A letter in support of the application dated September 4, 1996, was filed by the Southern Ute Indian Tribe.  Representatives of the Bureau of Land Management were also in attendance at the hearing.

 


                        8.  For purposes of recovering and producing natural gas up to its maximum efficiency, developing the natural gas in the most economical manner, and avoiding waste of the resource, two wells should be allowed within the 320-acre drilling and spacing unit and that reservoir characteristics and current exploration and production experience supports the drilling of an additional well.

 

                        9.  Evidence presented at the hearing indicated that one well will not efficiently and economically drain a 320‑acre drilling and spacing unit, and that an additional well is necessary to recover gas and associated hydrocarbons from the Fruitland Coal seams.

 

                        10.  Based on the facts stated in the application and the testimony and exhibits presented at the time of hearing by the applicant and the protestants, the Commission should approve the request to amend Order No. 112-61 to allow an additional well to be drilled and completed on the above-described 320-acre drilling and spacing unit for the production of gas and associated hydrocarbons from the Fruitland coal seams.

 

                                                                                   ORDER

 

                        NOW, THEREFORE, IT IS ORDERED that Order No. 112-61 is hereby amended to allow the Southern Ute No. 2-5 Well located 2,150 feet FNL and 2,035 feet FWL in the SE¼ NW¼ of Section 5, Township 32 North, Range 11 West, N.M.P.M., currently producing from the Mesaverde Formation and operated by Red Willow Production Company, to be recompleted by Cedar Ridge LLC for production from the Fruitland Coal seams as an additional well for the 320-acre drilling and spacing unit consisting of the W½ of Section 5.

 

                        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 September, 1996, as of September 5, 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 80203

July 3, 2018