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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 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. 112-136 AMENDED |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on October 21, 1997, 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 amended application of Red Willow Production Company for an Order to amend Order No. 112-61 to allow, at the discretion of the operator, an additional well in certain 320-acre drilling and spacing units in Townships 32 and 33 North, Ranges 7, 8, and 9 West, N.M.P.M., for production of gas and associated hydrocarbons from the Fruitland Coal seams, with permitted wells in Township 32 North to be located in the center of the NE¼ and SW¼ of the section and those in Township 33 North to be located in the center of the NW¼ and the SE¼ of the section, and no closer than 990 feet to any outer boundary of the unit, nor closer than 130 feet to any interior quarter section line, subject to the Director approving exceptions for the permitted well location for geological, topographic or surface location concerns. In addition, the Applicant requests that multiple completion and downhole commingling of the Fruitland Coal seams and the Dakota, Mesaverde and the Pictured Cliffs Formations be allowed.
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 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 in the NW¼ and the SE¼ of each section when north of the north line of Township 33 North, and in the NE¼ and the SW¼ of each section when south of the north line of Township 32 North, 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 seams.
5. Evidence and testimony presented at the hearing indicated that one well will not efficiently and economically drain the below-listed 320‑acre drilling and spacing units, and that additional wells are necessary to prevent waste and protect correlative rights, and to recover gas and associated hydrocarbons from the Fruitland Coal seams.
Township 32 North, Range 7 West, N.M.P.M.
Section 7: W½
Section 18: W½
Township 32 North, Range 8 West, N.M.P.M.
Sections 1 through 18: All
Township 32 North, Range 9 West, N.M.P.M.
Sections 1 through 4: All
Sections 9 - 16: All
Township 33 North, Range 8 West, N.M.P.M.
Section 19: S½
Section 20: S½
Sections 28 through 34: All
Section 35: S½
Township 33 North, Range 9 West, N.M.P.M.
Sections 25 through 28: All
Section 29: E½
Section 32: E½
Sections 33 through 36: All
6. That approximately ninety-eight percent (98%) of the mineral ownership and ninety-six percent (96%) of the surface ownership of the above-described lands are owned by the Southern Ute Indian Tribe.
7. That multiple completion and downhole commingling of the Fruitland Coal seams with the Dakota, Mesaverde and Pictured Cliffs Formations should be done in accordance with the Bureau of Land Management (BLM) rules.
8. Letters of support of the Application were filed by Four Star Oil and Gas Company, Vastar Resources, Stewart Petroleum Corporation, MarkWest Resources, the BLM and the Southern Ute Indian Tribal Council.
9. Based on the facts stated in the application and the testimony and exhibits presented at the time of the hearing by the applicant, the Commission should approve the request to amend Order No. 112-61 to allow, at the discretion of the operator, an additional well in certain 320-acre drilling and spacing units in Townships 32 and 33 North, Ranges 7, 8, and 9 West, N.M.P.M., for production from the Fruitland Coal seams, with permitted wells in Township 32 North to be located in the center of the NE¼ and SW¼ of the section and those in Township 33 North to be located in the center of the NW¼ and the SE¼ of the section, and no closer than 990 feet to any outer boundary of the unit, nor closer than 130 feet to any interior quarter section line, subject to the Director approving exceptions for the permitted well location for geological, topographic or surface location concerns. In addition, the Commission should recognize that multiple completion and downhole commingling of the Fruitland Coal seams with the Dakota, Mesaverde and Pictured Cliffs Formations should be done in accordance with BLM rules.
ORDER
NOW, THEREFORE, IT IS ORDERED that Order No. 112-61 is hereby amended to allow, at the discretion of the operator, an additional well in the below-listed 320-acre drilling and spacing units, for production from the Fruitland Coal seams, with permitted wells in Township 32 North to be located in the center of the NW¼ and SE¼ of the section and those in Township 33 North to be located in the center of the NE¼ and the SW¼ of the section, and no closer than 990 feet to any outer boundary of the unit, nor closer than 130 feet to any interior quarter section line, subject to the Director approving exceptions for the permitted well location for geological, topographic or surface location concerns.
Township 32 North, Range 7 West, N.M.P.M.
Section 7: W½
Section 18: W½
Township 32 North, Range 8 West, N.M.P.M.
Sections 1 through 18: All
Township 32 North, Range 9 West, N.M.P.M.
Sections 1 through 4: All
Sections 9 - 16: All
Township 33 North, Range 8 West, N.M.P.M.
Section 19: S½
Section 20: S½
Sections 28 through 34: All
Section 35: S½
Township 33 North, Range 9 West, N.M.P.M.
Sections 25 through 28: All
Section 29: E½
Section 32: E½
Sections 33 through 36: All
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 any 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 13th day of November, 1997, as of October 21, 1997.
AMENDED this __________ day of August, 1998, as of October 21, 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