|
BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
|
||
|
IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE IGNACIO-BLANCO FIELD, LA PLATA COUNTY, COLORADO |
) ) ) ) |
CAUSE NO. 112
ORDER NO. 112-148 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on October 20,1998 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 verified applications of Amoco Production Company, for an order amending Order No. 112-61 to allow eighteen (18) wells to be drilled as additional wells on certain 320-acre drilling and spacing units for production of gas and associated hydrocarbons from the Fruitland coal seams (the “Applications”).
FINDINGS
The Commission finds as follows:
1. Amoco Production Company (“Amoco”) 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 32 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. On August 27, 1998, Amoco, by their attorney, filed with the Commission verified applications for an order amending Order No. 112-61 to allow the below-listed wells to be drilled as additional wells for production from the Fruitland coal seams for the described 320-acre drilling and spacing units, with the permitted wells to be located no closer than 990 feet to any outer boundary of the section and no closer than 130 feet to any interior quarter section line.
Proposed Well Location (North of Ute Line) Drilling/Spacing Unit
NE¼ Sec 18-T34N-R6W, N.M.P.M. N½
SW¼ Sec 9-T34N-R7W, N.M.P.M. W½
NE¼ Sec 12-T34N-R7W, N.M.P.M. E½
NE¼ Sec 15-T34N-R7W, N.M.P.M. N½
NE¼ Sec 9-T34N-R8W, N.M.P.M. E½
NE¼ Sec 13-T34N-R8W, N.M.P.M. N½
NE¼ Sec 17-T34N-R8W, N.M.P.M. N½
SW¼ Sec 28-T35N-R7W, N.M.P.M. W½
SW¼ Sec 34-T35N-R7W, N.M.P.M. W½
NE¼ Sec 36-T35N-R8W, N.M.P.M. N½
Proposed Well Location (South of Ute Line) Drilling/Spacing Unit
SE¼ Sec 3-T33N-R9W, N.M.P.M. S½
NW¼ Sec 16-T33N-R9W, N.M.P.M. W½
NW¼ Sec 10-T34N-R7W, N.M.P.M. W½
NE¼ Sec 19-T34N-R8W, N.M.P.M. E½
NE¼ Sec 23-T34N-R8W, N.M.P.M. N½
SW¼ Sec 29-T34N-R8W, N.M.P.M. W½
NE¼ Sec 12-T34N-R9W, N.M.P.M. E½
SW¼ Sec 12-T34N-R9W, N.M.P.M. W½
NE¼ Sec 36-T34N-R9W, N.M.P.M. N½
SW¼ Sec 36-T34N-R9W, N.M.P.M. S½
6. On September 17, 1998, La Plata County filed with the Commission a Statement in Intervention and Protest, together with a Motion for Expedited Discovery and a First Set of Interrogatories and Request for Production of Documents to Amoco Corporation for the above-listed Applications and wells.
7. On September 28, 1998, Amoco filed with the Commission a written request to withdraw from the Applications the additional well proposed to be located in the SW¼ of Section 28, Township 35 North, Range 7 West, N.M.P.M.
8. On September 29, 1998, La Plata County withdrew its intervention on the following wells:
Proposed Well Location Drilling/Spacing Unit
NE¼ Sec 13-T34N-R8W, N.M.P.M. (N.U.L.) N½
SE¼ Sec 3-T33N-R9W, N.M.P.M. (S.U.L.) S½
NW¼ Sec 16-T33N-R9W, N.M.P.M. (S.U.L.) W½
NW¼ Sec 10-T34N-R7W, N.M.P.M. (S.U.L.) W½
SW¼ Sec 12-T34N-R9W, N.M.P.M. (S.U.L.) W½
NE¼ Sec 12-T34N-R9W, N.M.P.M. (S.U.L.) E½
9. On October 6 and 7, 1998 the Commission staff conducted Local Public Forums on the Applications pursuant to Rule 508. in Ignacio and Durango, respectively.
10. On October 7, 1998, the Secretary convened a pre-hearing conference pursuant to Rule 527. attended by Commission staff, La Plata County representatives, Amoco representatives and Southern Ute Indian Tribe representatives.
11. On October 14, 1998 the Bureau of Land Management (BLM) submitted a letter to the Commission in support of the Applications in accordance with the conditions of the Memorandum of Understanding between the BLM and the COGCC for the wells listed below:
Proposed Well Location Drilling/Spacing Unit
SE¼ Sec 3-T33N-R9W, N.M.P.M. (S.U.L.) S½
NW¼ Sec 16-T33N-R9W, N.M.P.M. (S.U.L.) W½
NW¼ Sec 10-T34N-R7W, N.M.P.M. (S.U.L.) W½
NE¼ Sec 19-T34N-R8W, N.M.P.M. (S.U.L.) E½
SW¼ Sec 29-T34N-R8W, N.M.P.M. (S.U.L.) W½
NE¼ Sec 12-T34N-R9W, N.M.P.M. (S.U.L.) E½
SW¼ Sec 12-T34N-R9W, N.M.P.M. (S.U.L.) W½
12. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated that the drainage from the proposed additional well and the existing well for the 320-acre drilling and spacing unit consisting of the E½ of Section 9, Township 34 North, Range 8 West, N.M.P.M., North of the Ute Line would be greater than 320-acres. The hearing on this well was continued until additional notice could be provided to cornering and contiguous mineral owners.
13. Exhibits and testimony presented October 14, 1998 at the administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the N½ of Section 18, Township 34 North, Range 6 West, N.M.P.M., North of the Ute Line is calculated at 16.2 BCF and the existing well is calculated to drain only 56 acres. Production from an additional well in the NE¼ is projected to recover an additional 2.8 BCF of gas from the drilling and spacing unit.
14. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the W½ of Section 9, Township 34 North, Range 7 West, N.M.P.M., North of the Ute Line is calculated at 15.1 BCF and the existing well is calculated to drain only 51 acres. Production from an additional well in the SW¼ is projected to recover an additional 1.3 BCF of gas from the drilling and spacing unit.
15. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the E½ of Section 12, Township 34 North, Range 7 West, N.M.P.M., North of the Ute Line is calculated at 15.7 BCF and the existing well is calculated to drain only 83 acres. Production from an additional well in the NE¼ is projected to recover an additional 3.2 BCF of gas from the drilling and spacing unit.
16. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the N½ of Section 15, Township 34 North, Range 7 West, N.M.P.M., North of the Ute Line is calculated at 17.9 BCF and the existing well is calculated to drain only 230 acres. Production from an additional well in the NE¼ is projected to recover an additional 2.2 BCF of gas from the drilling and spacing unit.
17. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the N½ of Section 13, Township 34 North, Range 8 West, N.M.P.M., North of the Ute Line is calculated at 17.8 BCF and the existing well is calculated to drain only 99 acres. Production from an additional well in the NE¼ is projected to recover an additional 1.9 BCF of gas from the drilling and spacing unit.
18. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the N½ of Section 17, Township 34 North, Range 8 West, N.M.P.M., North of the Ute Line is calculated at 25.8 BCF and the existing well is calculated to drain only 48 acres. Production from an additional well in the NE¼ is projected to recover an additional 5.4 BCF of gas from the drilling and spacing unit
19. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the W½ of Section 34, Township 35 North, Range 7 West, N.M.P.M., North of the Ute Line is calculated at 14.8 BCF and the existing well is calculated to drain only 97 acres. Production from an additional well in the SW¼ is projected to recover an additional 3.4 BCF of gas from the drilling and spacing unit.
20. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the N½ of Section 36, Township 35 North, Range 8 West, N.M.P.M., North of the Ute Line is calculated at 14.5 BCF and the existing well is calculated to drain only 140 acres. Production from an additional well in the NE¼ is projected to recover an additional 2.4 BCF of gas from the drilling and spacing unit.
21. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the S½ of Section 3, Township 33 North, Range 9 West, N.M.P.M., South of the Ute Line is calculated at 28.0 BCF and the existing well is calculated to drain only 22 acres. Production from an additional well in the SE¼ is projected to recover an additional 2.0 BCF of gas from the drilling and spacing unit.
22. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the W½ of Section 16, Township 33 North, Range 9 West, N.M.P.M., South of the Ute Line is calculated at 15.7 BCF and the existing well is calculated to drain only 108 acres. Production from an additional well in the NW¼ is projected to recover an additional 3.6 BCF of gas from the drilling and spacing unit.
23. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the W½ of Section 10, Township 34 North, Range 7 West, N.M.P.M., South of the Ute Line is calculated at 19.4 BCF and the existing well is calculated to drain only 71 acres. Production from an additional well in the NW¼ is projected to recover an additional 1.9 BCF of gas from the drilling and spacing unit.
24. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the E½ of Section 19, Township 34 North, Range 8 West, N.M.P.M., South of the Ute Line is calculated at 28.7 BCF and the existing well is calculated to drain only 138 acres. Production from an additional well in the NE¼ is projected to recover an additional 2.6 BCF of gas from the drilling and spacing unit.
25. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the N½ of Section 23, Township 34 North, Range 8 West, N.M.P.M., South of the Ute Line is calculated at 19.6 BCF and the existing well is calculated to drain only 21 acres. Production from an additional well in the NE¼ is projected to recover an additional 0.6 BCF of gas from the drilling and spacing unit.
26. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the W½ of Section 29, Township 34 North, Range 8 West, N.M.P.M., South of the Ute Line is calculated at 22.3 BCF and the existing well is calculated to drain only 26 acres. Production from an additional well in the SW¼ is projected to recover an additional 3.0 BCF of gas from the drilling and spacing unit.
27. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the E½ of Section 12, Township 34 North, Range 9 West, N.M.P.M., South of the Ute Line is calculated at 28.9 BCF and the existing well is calculated to drain only 45 acres. Production from an additional well in the NE¼ is projected to recover an additional 3.0 BCF of gas from the drilling and spacing unit.
28. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the W½ of Section 12, Township 34 North, Range 9 West, N.M.P.M., South of the Ute Line is calculated at 25.0 BCF and the existing well is calculated to drain only 110 acres. Production from an additional well in the SW¼ is projected to recover an additional 2.7 BCF of gas from the drilling and spacing unit.
29. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the N½ of Section 36, Township 34 North, Range 9 West, N.M.P.M., South of the Ute Line is calculated at 26.6 BCF and the existing well is calculated to drain only 34 acres. Production from an additional well in the NE¼ is projected to recover an additional 2.3 BCF of gas from the drilling and spacing unit.
30. Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the S½ of Section 36, Township 34 North, Range 9 West, N.M.P.M., South of the Ute Line is calculated at 23.7 BCF and the existing well is calculated to drain only 40 acres. Production from an additional well in the SW¼ is projected to recover an additional 2.3 BCF of gas from the drilling and spacing unit.
31. Evidence presented at the October 14, 1998 administrative hearing indicated that one (1) well will not efficiently and economically drain each of the eighteen (18) 320-acre drilling and spacing units described above, and that additional wells are necessary to prevent waste, protect correlative rights and to recover gas and associated hydrocarbons from the Fruitland coal.
32. During the local public forums held in La Plata County, local residents raised surface concerns related to four (4) locations. An onsite inspection should be performed by COGCC staff to more adequately address the concerns and evaluate the compliance of the surface location with the Commission Rules and Regulations on the following sites:
Proposed Well Location Drilling/Spacing Unit
SW¼ Sec 34-T35N-R7W, N.M.P.M., (N.U.L.) W½
NE¼ Sec 19-T34N-R8W, N.M.P.M., (S.U.L.) E½
NE¼ Sec 23-T34N-R8W, N.M.P.M., (S.U.L.) N½
NE¼ Sec 36-T35N-R8W, N.M.P.M., (S.U.L.) N½
33. To accurately assess the feasibility of the increased well density pilot project in different areas included in the Applications, Amoco should submit measured bottom hole pressures, drilling and completion cost, and annual operation cost for the eighteen (18) wells described above to the Commission within six (6) months of the date each of the wells are first produced.
34. In order to monitor the water and gas production from any existing and additional wells drilled in areas of historically high water production, Amoco should provide to the Commission water and gas production from the existing and additional wells on a quarterly basis. Amoco should begin providing the data at the end of the first quarter in which the additional well is produced for the following proposed drilling and spacing units:
Proposed Well Location Drilling/Spacing Unit
NE¼ Sec 36-T35N-R8W, N.M.P.M., (N.U.L.) N½
SW¼ Sec 34-T35N-R7W, N.M.P.M., (N.U.L.) W½
SW¼ Sec 9-T34N-R7W, N.M.P.M., (N.U.L.) W½
NE¼ Sec 17-T34N-R8W, N.M.P.M., (N.U.L.) N½
NE¼ Sec 15-T34N-R7W, N.M.P.M., (N.U.L.) N½
35. On October 16, 1998 the Hearing Officers continued the administrative hearing to review an agreement submitted by La Plata County and Amoco to address environmental and public health, safety and welfare concerns raised by the county on the Applications for increased well density (the “Agreement”). La Plata County and Amoco consented to the continuance. On October 16, 1998 La Plata County and Amoco executed the Agreement and asked that the Commission make the Agreement part of the Commission order on the Applications. La Plata County simultaneously agreed to withdraw its intervention conditioned upon the Commission making the Agreement part of the order on the Applications.
36. The Commission finds that the Agreement between La Plata County and Amoco should become part of the order to address environmental and public health, safety and welfare concerns.
37. On October 16, 1998, La Plata County filed with the Commission a Conditional Withdrawal of Intervention which stated that the Intervention will be withdrawn if the Agreement between La Plata County and Amoco is made part of the Commission’s final order.
38. Based on the facts stated in the Applications and the testimony and exhibits presented at the time of the administrative hearing by the applicant, the Commission finds it should approve the request to amend Order No. 112-61 to allow the wells described in Findings 13 through 30 to be drilled as additional wells on certain 320-acre drilling and spacing units for production of gas and associated hydrocarbons from the Fruitland coal seams.
39. Pursuant to Rule 508. the Commission has reviewed the Local Public Forum Summary reports dated October 14, 1998, and the video-tapes of the Local Public Forums conducted in Ignacio and Durango on October 7 and October 8, 1998. Pursuant to Rule 508.i.(5).C. the Commission finds that it should enter an order approving the Applications which shall contain the above-described conditions agreed to by Amoco which the Commission finds adequately address the concerns related to the environment and public health, safety and welfare not otherwise addressed by the Applications or by Commission rule.
40. The Commission further finds that it cannot make the required findings contained in Rule 508.i.(5).D. necessary to order a Public Issues Hearing. Based on this finding and the County’s withdrawal of its intervention the Commission finds that a Public Issues Hearing on the Applications is not required.
ORDER
NOW, THEREFORE, IT IS ORDERED that Order No. 112-61 is hereby amended to allow the following wells to be drilled as additional wells for the described 320-acre drilling and spacing units for production of gas and associated hydrocarbons from the Fruitland coal seams.
Proposed Well Location (North of Ute Line) Drilling/Spacing Unit
NE¼ Sec 18-T34N-R6W, N.M.P.M. N½
SW¼ Sec 9-T34N-R7W, N.M.P.M. W½
NE¼ Sec 12-T34N-R7W, N.M.P.M. E½
NE¼ Sec 15-T34N-R7W, N.M.P.M. N½
NE¼ Sec 13-T34N-R8W, N.M.P.M. N½
NE¼ Sec 17-T34N-R8W, N.M.P.M. N½
SW¼ Sec 34-T35N-R7W, N.M.P.M. W½
NE¼ Sec 36-T35N-R8W, N.M.P.M. N½
Proposed Well Location (South of Ute Line) Drilling/Spacing Unit
SE¼ Sec 3-T33N-R9W, N.M.P.M. S½
NW¼ Sec 16-T33N-R9W, N.M.P.M. W½
NW¼ Sec 10-T34N-R7W, N.M.P.M. W½
NE¼ Sec 19-T34N-R8W, N.M.P.M. E½
NE¼ Sec 23-T34N-R8W, N.M.P.M. N½
SW¼ Sec 29-T34N-R8W, N.M.P.M. W½
NE¼ Sec 12-T34N-R9W, N.M.P.M. E½
SW¼ Sec 12-T34N-R9W, N.M.P.M. W½
NE¼ Sec 36-T34N-R9W, N.M.P.M. N½
SW¼ Sec 36-T34N-R9W, N.M.P.M. S½
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 with respect to federal and Indian lands, this order is hereby deemed to be an order by the BLM. As such, any appeal or challenge of this order with respect to federal or Indian lands shall go through the BLM State Director Review process outlined in 43 CFR 3165.3.
IT IS FURTHER ORDERED that the agreement between La Plata County and Amoco Production Company dated October 16, 1998 to address environmental and public health, safety and welfare concerns is hereby included as part of this order.
IT IS FURTHER ORDERED that the application to drill an additional well proposed to be located in the E½ of Section 9, Township 34 North, Range 8 West, N.M.P.M. shall be continued until additional notice is provided to cornering and contiguous mineral owners.
IT IS FURTHER ORDERED that Amoco shall submit measured bottom hole pressures, drilling and completion costs, and annual operation costs for the eighteen (18) wells described above to the Commission within six (6) months of the date each of the wells are first produced.
IT IS FURTHER ORDERED that COGCC staff shall perform an onsite inspection for the following wells:
Proposed Well Location Drilling/Spacing Unit
SW¼ Sec 34-T35N-R7W, N.M.P.M., (N.U.L.) W½
NE¼ Sec 19-T34N-R8W, N.M.P.M., (S.U.L.) E½
NE¼ Sec 23-T34N-R8W, N.M.P.M., (S.U.L.) N½
NE¼ Sec 36-T35N-R8W, N.M.P.M., (S.U.L.) N½
IT IS FURTHER ORDERED that Amoco shall submit water and gas production data from the following wells to the Commission every quarter beginning with the end of the quarter in which the recompleted well is first produced:
Proposed Well Location Drilling/Spacing Unit
NE¼ Sec 36-T35N-R8W, N.M.P.M., (N.U.L.) N½
SW¼ Sec 34-T35N-R7W, N.M.P.M., (N.U.L.) W½
SW¼ Sec 9-T34N-R7W, N.M.P.M., (N.U.L.) W½
NE¼ Sec 17-T34N-R8W, N.M.P.M., (N.U.L.) N½
NE¼ Sec 15-T34N-R7W, N.M.P.M., (N.U.L.) N½
IT IS FURTHER ORDERED that no Public Issues Hearing shall be conducted on the Applications.
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 November, 1998, as of October 20, 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