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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 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. 112-152 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m. on January 15, 1999 in Suite 801, the Chancery Building, 1120 Lincoln Street, Suite 801, Denver, Colorado after giving Notice of Hearing, as required by law, on the application of Amoco Production Company for an order amending Order No. 112-61 to allow a well to be drilled in the NE¼ of Section 9, Township 34 North Range 8 West, N.M.P.M. as an additional well for production from the Fruitland Coal seams consisting of the E½ of Section 9 with the permitted wells to be located no closer than 990 feet to any outer boundary of the drilling unit and no closer than 130 feet to any interior quarter section line.
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 Production Company, by their attorney, filed with the Commission verified applications for an order amending Order No. 112-61 to allow twenty (20) wells to be drilled as additional wells for production from the Fruitland Coal seams for certain 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.
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 October 6 and 7, 1998 the Commission staff conducted Local Public Forums on the Applications pursuant to Rule 508. in Ignacio and Durango, respectively.
9. 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.
10. 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 E½ of Section 9, Township 34 North, Range 8 West, N.M.P.M., North of the Ute Line is calculated at 24.8 BCF and the existing well is calculated to drain 208 acres. Production from an additional well in the NE¼ is projected to recover an additional 5.1 BCF of gas from the drilling and spacing unit.
11. 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 pressure, drilling and completion cost, and annual operation cost for the is well to the Commission within six (6) months of the date the well is first produced.
12. 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.
13. 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.
14. 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.
15. Exhibits and testimony presented October 14, 1998 at the administrative hearing indicated that an additional well in the NE¼ of Section 9, Township 34 North, Range 8 West, N.M.P.M and the existing well would drain more than the 320-acres of the drilling and spacing unit. In accordance with Rule 507.b.(1), offset owners which may be affected by the approval of this additional well had not been notified. The Hearing Officers therefore recommended that the application for the well in the NE¼ of Section 9 be continued to provide additional notice.
16. On October 20, 1998, the Commission entered Order No. 112-148 which allowed eighteen (18) wells to be drilled as additional wells for certain 320-acre drilling and spacing units and continued the application for the well in the NE¼ of Section 9, Township 34 North, Range 8 West, N.M.P.M. to the December hearing.
17. Additional notice was provided to cornering and contiguous owners adjacent to the proposed well in the NE¼ of Section 9, Township 34 North, Range 8 West, N.M.P.M. No protests to the continued application were received. On December 2, 1998 Amoco requested the application for the proposed well in the NE¼ of Section 9 be continued to the January 1999 hearing.
18. Based on the facts stated in the Applications, the testimony and exhibits presented at the time of the administrative hearing by the applicant, and having received no protests from offsetting mineral owners, the Commission should approve the request to amend Order No. 112-61 to allow a well to be drilled in the NE ¼ of Section 9, Township 34 North Range 8 West, N.W.P.M., as an additional well for the 320-acre drilling and spacing unit consisting of the E½ of Section 9 for production of gas and associated hydrocarbons from the Fruitland coal seams.
19. 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 6 and October 7, 1998. Pursuant to Rule 508.i.(5).C. the Commission finds that it should enter an order approving the Application 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 Application or by Commission rule.
20. 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.
NOW, THEREFORE IT IS ORDERED that the Order No. 112-61 is hereby amended to allow an additional well to be drilled in the NE¼ of Section 9, Township 34 North, Range 8 West, N.M.P.M. for production from the Fruitland Coal seams for the 320-acre drilling and spacing unit consisting of the E½ of Section 9, with the permitted well to be located no closer than 990 feet to any outer boundary of the drilling unit and no closer than 130 feet to any interior quarter section line.
IT IS FURTHER ORDERED that the agreement between La Plata County and Amoco Production Company dated October 16, 1998 is hereby included as part of this order to address environmental and public health, safety and welfare concerns.
IT IS FURTHER ORDERED that Amoco shall submit measured bottom hole pressures, drilling and completion costs, and annual operation costs to the Commission within six (6) months of the date the well is first produced.
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, 1999, as of January 15, 1999.
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
February 1, 1999