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.   112-145

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission on July 9, 1998, 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 Vastar Resources, Inc., for an order amending Order No. 112-61 to allow additional wells in certain irregular drilling and spacing units in Ignacio-Blanco Field, for production from the Fruitland Coal seams.  The Applicant also requests approval of certain wells as the permitted well for the specified drilling and spacing units.

FINDINGS

                        The Commission finds as follows:

                        1.  Vastar Resources, Inc. 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 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.

                        5.  On June 1, 1998, Vastar Resources, Inc., filed with the Commission a verified application for an order amending Order No. 112-61 to allow additional wells in the below-described irregular drilling and spacing units, for production from the Fruitland Coal seams.  The Applicant also requested approval of the below-listed wells as the permitted well for the specified drilling and spacing units:

Township 32 North, Range 8 West, N.M.P.M.

Section 19 and 20:  E½ E½ of Section 19 and W½ of Section 20

(the So. Ute #19-1, either a new well or an existing Mesaverde Formation well to be recompleted in the Fruitland Coal seams at its current location 1980 feet FSL and 660 feet FEL)

Section 20 and 21:  E½ of Section 20 and W½ W½ of Section 21

(new location:  1,350 feet FNL and 1,000 feet FWL of Section 21)

Township 32 North, Range 9 West, N.M.P.M.

Sections 23 and 24:  E½ of Section 23 and W½ W½ of Section 24

(the So. Ute #24-3, an existing Mesaverde Formation well to be recompleted into the Fruitland Coal seams at its current location, 1,000 feet FNL and 540 feet FWL in Section 24)

Section 21:  E½ W½ and E½ of Section 21

(the So. Ute #21-2, an existing Mesaverde Formation well to be recompleted into the Fruitland Coal seams at its current location, 1,200 feet FSL and 1,000 feet FEL of Section 21)

                        6. Evidence presented at the administrative hearing indicated that Vastar owns 100% of the working interest and the Southern Ute Indian Tribe owns the surface and the minerals in the application lands.

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                        7.  Evidence presented at the administrative hearing indicated that Vastar will attempt the recompletion of three wells to the Fruitland Coal Formation and will drill one new well.

                        8.  Evidence presented at the administrative hearing indicated that one well will not efficiently and economically drain the 320‑acre drilling and spacing units, and that additional wells are necessary to prevent waste, protect correlative rights, and to recover gas and associated hydrocarbons from the Fruitland Coal seams.

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

                        10.  The Bureau of Land Management submitted a letter dated July 2, 1998, providing support for this application in accordance with the conditions of the Memorandum of Understanding between the BLM and the COGCC.

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 additional wells in the above-described irregular drilling and spacing units, for production from the Fruitland Coal seams.  The wells listed above in Finding #5 should be approved as the permitted well for the specified drilling and spacing units.

ORDER

                        NOW, THEREFORE, IT IS ORDERED that Order No. 112-61 is hereby amended to allow additional wells in the below-described irregular drilling and spacing units, for production from the Fruitland Coal seams and approves the below-listed wells as the permitted well for the drilling and spacing units:

Township 32 North, Range 8 West, N.M.P.M.

Section 19 and 20:  E½ E½ of Section 19 and W½ of Section 20

(the So. Ute #19-1, either a new well or an existing Mesaverde Formation well to be recompleted in the Fruitland Coal seams at its current location 1980 feet FSL and 660 feet FEL)

Section 20 and 21:  E½ of Section 20 and W½ W½ of Section 21

(new location:  1,350 feet FNL and 1,000 feet FWL of Section 21)

Township 32 North, Range 9 West, N.M.P.M.

Sections 23 and 24:  E½ of Section 23 and W½ W½ of Section 24

(the So. Ute #24-3, an existing Mesaverde Formation well to be recompleted into the Fruitland Coal seams at its current location, 1,000 feet FNL and 540 feet FWL in Section 24)

Section 21:  E½ W½ and E½ of Section 21

(the So. Ute #21-2, an existing Mesaverde Formation well to be recompleted into the Fruitland Coal seams at its current location, 1,200 feet FSL and 1,000 feet FEL of Section 21)

                        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 July, 1998, as of  July 9, 1998.

                                                                        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 5, 2018