BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE APPLICATION OF XTO ENERGY, INC. FOR AN ORDER TO APPROVE UP TO FOUR WELLS IN THREE APPROXIMATE 320-ACRE DRILLING AND SPACING UNITS ESTABLISHED FOR SECTIONS 35 AND 36, TOWNSHIP 33 NORTH, RANGE 9 WEST, N.M.P.M., FOR THE FRUITLAND COAL SEAM FORMATION, IGNACIO-BLANCO FIELD, LA PLATA COUNTY, COLORADO |
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CAUSE NO. 112
DOCKET NO. 1312-AW-80
ORDER NO. 112-238 |
REPORT OF THE COMMISSION
The Commission heard this matter on December 16, 2013, at the Ralph L. Carr Colorado Judicial Center, 1300 Broadway, 1st Floor, Room 1E, Denver, Colorado, upon application for an order to approve up to a total of four wells within each of three approximate 320-acre drilling and spacing units established for Sections 35 and 36, Township 33 North, Range 9 West, N.M.P.M., for the production of oil, gas and associated hydrocarbons from the Fruitland Coal Seam Formation.
FINDINGS
The Commission finds as follows:
1. XTO Energy Inc. (“XTO” or “Applicant”), 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 Oil and Gas Conservation Act.
4. On June 15, 1988, the Commission entered Order No. 112-60 which, among other things, established 320-acre drilling and spacing units for production of gas from the Fruitland Coal Seam Formation with 990 foot setbacks to the outer boundary of each unit and 130 foot setbacks to the interior quarter section line. Sections 35 and 36, Township 33 North, Range 9 West, N.M.P.M. are subject to Order No. 112-60 for the Fruitland Coal Seam Formation.
5. On August 15, 1988, the Commission entered Order No. 112-61 which amended parts of Order No. 112-60 and established additional rules for production from the Fruitland Coal Seam Formation. Sections 35 and 36, Township 33 North, Range 9 West, N.M.P.M. are subject to Order No. 112-61 for the Fruitland Coal Seam Formation.
6. On October 21, 1997, the Commission entered Order No. 112-136 which, among other things, allowed an additional well in certain 320-acre drilling and spacing units established by Order Nos. 112-60 and 112-61, with permitted wells in Township 33 North to be located in the center of the NW¼ and SE¼ of the Section, and no closer than 990 feet to any out boundary of the unit, nor closer than 130 feet to any interior quarter section line, without exception by the Director. Sections 35 and 36, Township 33 North, Range 9 West, N.M.P.M. are subject to Order No. 112-136 for the Fruitland Coal Seam Formation.
7. On October 17, 2013, XTO, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to approve up to four wells within each of three approximate 320-acre drilling and spacing units established for the below-described lands (“Application Lands”) for the production of oil, gas and associated hydrocarbons from the Fruitland Coal Seam Formation, with the productive interval of the wellbore to be located no closer than 660 feet from the unit boundaries, without exception being granted by the Director:
Township 33 North, Range 9 West, N.M.P.M.
Section 35: E½ (DSU #1, 320-acres)
Section 35: W½ (DSU #2, 320-acres)
Section 36: E½ (DSU #3, 320-acres)
Applicant requests to eliminate interior quarter section line setbacks to enable the drilling of horizontal wells.
8. On December 3, 2013, XTO, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits. Sworn written testimony and exhibits were submitted in support of the Application.
9. Land testimony and exhibits submitted in support of the Application by G. Scott Thompson, Regional Land Manager for XTO, showed the surface and minerals of the Application Lands are owned in by the United States in Trust for the Southern Ute Tribe of the Southern Ute Reservation, Colorado, and that XTO owns a partial leasehold ownership interest in the Application Lands.
10. Geologic testimony and exhibits submitted in support of the Application by Charles Oliver Musecamp, Associate Geologist for XTO, showed the Fruitland Coal Seam Formation is present throughout the Application Lands, is approximately 50 to 70 feet thick.
11. Engineering testimony and exhibits submitted in support of the Application by George Harold Staus, Reservoir Engineer for XTO, showed that nearby units with increased well densities have significantly raised production with no observed impact on existing Fruitland Coal Seam Formation wells and that the additional requested wells will optimize resource development potential.
12. The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.
13. XTO agreed to be bound by oral order of the Commission.
14. Based on the facts stated in the verified Application, having received no protests, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to approve up to a total of four wells within each of three approximate 320-acre drilling and spacing units established for Sections 35 and 36, Township 33 North, Range 9 West, N.M.P.M., for the production of oil, gas and associated hydrocarbons from the Fruitland Coal Seam Formation.
ORDER
IT IS HEREBY ORDERED:
1. A total of up to four wells within each of three approximate 320-acre drilling and spacing units established for the below-described lands, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Fruitland Coal Seam Formation, with the productive interval of the wellbore to be located no closer than 660 feet from the unit boundaries, without exception being granted by the Director:
Township 33 North, Range 9 West, N.M.P.M.
Section 35: E½ (DSU #1, 320-acres)
Section 35: W½ (DSU #2, 320-acres)
Section 36: E½ (DSU #3, 320-acres)
2. Interior quarter section line setbacks, are hereby eliminated, to enable the drilling of horizontal wells.
1. The provisions contained in the above order shall become effective immediately.
2. The Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.
3. Under the State Administrative Procedure Act the Commission considers this Order to be final agency action for purposes of judicial review within 30 days after the date this Order is mailed by the Commission.
4. An application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.
ENTERED this _____ day of January, 2014, as of December 16, 2013.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary