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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, ARCHULETA COUNTY, COLORADO |
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CAUSE NO. 112
ORDER NO. 112-179 |
This cause came on for hearing before the Commission at 9:00 a.m. on June 6, 2005 in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado on the application of Energen Resources Corporation for an order to allow a third well to be drilled within an existing 320-acre drilling and spacing unit consisting of the N½ of Section 13, Township 32 North, Range 6 West, N.M.P.M., for the production of gas and associated hydrocarbons from the Fruitland coal seams with the permitted location to be in the NW¼, no closer that 990 feet to the outer boundary of the unit and no closer than 130 feet to any interior quarter section line.
The Commission finds as follows:
1. On July 11, 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, including Section 13, Township 32 North, Range 6 West, N.M.P.M., with the permitted well to be located in the center of the NW¼ and the SE¼ of the section and no closer than 900 feet from the boundaries of the quarter section upon which it is located, nor closer than 130 feet to any interior quarter section line.
2. On May 15, 2000, the Commission issued Order No. 112-157, which allowed an optional additional well to be drilled for production of gas from the Fruitland coal seams for certain lands, including Section 13, Township 32 North, Range 6 West, N.M.P.M., with the permitted well when north of the north line of Township 32 North to be located in the NW¼ and the SE¼ of each section and when south of the north line of Township 32 North to be located in the NE¼ and 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.
3. On April 11, 2005, Energen Resources Corporation (“Energen”), by its attorney, filed with the Commission a verified application for an order to allow a third well to be drilled within an existing 320-acre drilling and spacing unit consisting of the N½ of Section 13, Township 32 North, Range 6 West, N.M.P.M., for the production of gas and associated hydrocarbons from the Fruitland coal seams with the permitted location to be in the NW¼, no closer that 990 feet to the outer boundary of the unit and no closer than 130 feet to any interior quarter section line. Two (2) Fruitland Coal seam wells exist in the NW¼: the Schumacher 32-6 #13-1 Well, a vertical well located in the NE¼ (1145’ FNL and 800’ FEL) and a horizontal well, the Schumacher 32-6 #13-2 Well which has a surface location in the NE¼ (1185’ FNL and 815’ FEL) which was intended to bottomhole in the NW¼ of Section 13. Due to experiencing mechanical difficulties, the well reached total depth at a bottomhole in the NE¼ (1573’ FNL and 2484’ FEL). In order to prevent a waste of this wellbore, Energen requests the right to produce from both wellbores in the NE¼ and to requests the right to produce another well at a legal location in the NW¼ of Section 13, thereby allowing three (3) Fruitland Coal seam wells in the N½ of said Section 13. All owners in the 320-acre spacing unit are common and no violation of correlative rights exists by allowing both permitted wells to be produced from the NE¼ of Section 13.
4. Testimony and exhibits presented at the administrative hearing showed that the Schumacher #13-1 Well is a vertical well located in the NE¼ of Section 13, Township 32 North, Range 6 West and the Schumacher #13-2 Well is a directionally drilled well located on the Schumacher 13-1 well site, drilled 1700 feet to the southwest. Additional testimony indicated that the Shumacher 13-2 Well was intended to penetrate the Fruitland coal seams from the NE¼ of Section 13 to the NW¼ of Section 13, but due to mechanical problems, the drilling of the well was stopped before reaching the proposed bottom hole location. Further testimony showed that the mineral ownership in the N½ of Section 13 is uniform.
5. Testimony presented at the administrative hearing showed that Schumacher #13-2 wellbore enters the Fruitland coal seams in the NE¼ of Section 13 and reaches total depth in the Fruitland coal seams in the NE¼ of Section 13. Additional testimony presented indicated that correlative rights would be protected if two (2) wells were allowed to produce in the NE¼.
6. Testimony presented at the administrative hearing showed that the Schumacher #13-1 and the Schumacher #13-2 Wells will drain 102 acres of the 320-acre drilling and spacing unit, that both wells are needed to drain gas form the Fruitland coal seems in this unit and that a third well would be required to drain the NW¼ of Section 13.
7. Energen Resources Corporation agreed to be bound by oral order of the Commission.
8. Based on the facts stated in the verified application, having received no protests, and having been heard by the Hearing Officer who recommended approval, the Commission should enter an order allowing a third well to be drilled within an existing 320-acre drilling and spacing unit consisting of the N½ of Section 13, Township 32 North, Range 6 West, N.M.P.M., for the production of gas and associated hydrocarbons from the Fruitland coal seams, with the permitted location to be in the NW¼, no closer that 990 feet to the outer boundary of the unit and no closer than 130 feet to any interior quarter section line.
NOW, THEREFORE, IT IS ORDERED, a third well is hereby allowed to be drilled within an existing 320-acre drilling and spacing unit consisting of the N½ of Section 13, Township 32 North, Range 6 West, N.M.P.M., for the production of gas and associated hydrocarbons from the Fruitland coal seams with the permitted location to be in the NW¼, no closer that 990 feet to the outer boundary of the unit and no closer than 130 feet to any interior quarter section line.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.
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.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
ENTERED this day of June, 2005, as of June 6, 2005.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Patricia Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
June 20, 2005