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	) ) ) )	CAUSE NO.   112 ORDER NO.   112-130

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission on February 11, 1997, at 9:00 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 Red Willow Production Company for an order amending Order No. 112-61 to allow the Southern Ute No. 17-3 Well located 1,055 feet FNL and 990 feet FWL in the NW¼ NW¼ of Section 17, Township 32 North, Range 11 West, N.M.P.M., originally drilled to the Mesaverde Formation, recompleted to the Fruitland Coal seam and currently utilized as a pressure observation well, to be recompleted at an exception location as an additional well for production from the Fruitland Coal seams for the 320-acre drilling and spacing unit consisting of the W½ of Section 17.

FINDINGS

                        The Commission finds as follows:

                        1.  Red Willow 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 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 17, 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 17, 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.  That the Southern Ute No. 17-3 Well located 1,055 feet FNL and 990 feet FWL in the NW¼ NW¼ of Section 17, Township 32 North, Range 11 West, N.M.P.M., was originally drilled to the Mesaverde Formation, recompleted to the Fruitland Coal seam and is currently utilized as a pressure observation well.

                        7.  On February 4, 1997, a protest/intervention to the application was filed by Burlington Resources Oil & Gas Company, and on February 7, 1997, a written withdrawal of the protest was filed.  A letter in support of the application dated February 4, 1997, was filed by the Bureau of Land Management.  On February 6, 1997, a letter was filed by the Southern Ute Indian Tribe in support of the application.

                        8.  Evidence presented at the administrative hearing indicated that one well will not efficiently and economically drain the 320‑acre drilling and spacing unit consisting of the W½ of Section 17, and that an additional well is necessary to recover gas and associated hydrocarbons from the Fruitland Coal seams.

                        9.  That the Bureau of Land Management (BLM) has jurisdiction over the Indian lands involved in this Application.  Under the terms of F.3. paragraph 2 of the Memorandum of Understanding of August 22, 1991, between the BLM and COGCC, at the time of the administrative hearing the BLM again provided its concurrence with the Application with regard to Indian lands.

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

                        11.  Based on the facts stated in the application and the testimony and exhibits presented at the time of the administrative hearing by the applicant, the Commission should approve the request to amend Order No. 112-61 to allow the Southern Ute No. 17-3 Well located 1,055 feet FNL and 990 feet FWL in the NW¼ NW¼ of Section 17, Township 32 North, Range 11 West, N.M.P.M., originally drilled to the Mesaverde Formation, recompleted to the Fruitland Coal seam and currently utilized as a pressure observation well, to be recompleted at an exception location as an additional well for production from the Fruitland Coal seams for the 320-acre drilling and spacing unit consisting of the W½ of Section 17.

ORDER

                        NOW, THEREFORE, IT IS ORDERED that Order No. 112-61 is hereby amended to allow the Southern Ute No. 17-3 Well located 1,055 feet FNL and 990 feet FWL in the NW¼ NW¼ of Section 17, Township 32 North, Range 11 West, N.M.P.M., originally drilled to the Mesaverde Formation, recompleted to the Fruitland Coal seam and currently utilized as a pressure observation well, to be recompleted at an exception location as an additional well for production from the Fruitland Coal seams for the 320-acre drilling and spacing unit consisting of the W½ of Section 17.

                        IT IS FURTHER ORDERED, that in accordance with G.4.b. paragraph 2 of the MOU of August 22, 1991, between the BLM and COGCC, this order is hereby deemed to be an order by the BLM.  As such, any appeal or challenge of this order with respect to Indian lands shall go through the BLM State Director Review process outlined in 43 CFR 3165.3.

                        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, as the party agreed to accept the verbal order of the Commission.

                        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, 1997, as of February 10, 1997.

                                                                        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