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 FOR THE FRUITLAND COAL SEAMS, IGNACIO-BLANCO FIELD, ARCHULETA COUNTY, COLORADO

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CAUSE NO. 112

 

DOCKET NO. 150900522

 

TYPE:  SPACING

 

ORDER NO. 112-256

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on October 26, 2015, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to designate a 320-acre drilling and spacing unit for the E½ of Section 32, Township 33 North, Range 5 West, N.M.P.M., pursuant to Order No. 112-85, and approve an additional well for a total of two horizontal wells within the unit, with the productive interval of the wellbore to be located no closer than 660 feet from the unit boundaries, with no interior quarter section setbacks, for the production of gas and associated hydrocarbons from the Fruitland Coals Seams.

 

FINDINGS

 

The Commission finds as follows:

 

1.            Catamount Energy Partners, LLC (“Catamount” 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 17, 1988, the Commission entered Order No. 112-60 which established 320-acre drilling and spacing units covering certain lands in Archuleta County, Colorado, with the units consisting of the N½ and S½ or the E½ and W½ of each section with the permitted well located, when north of the north line of Township 32 North, in the NW¼ and SE¼ of the section, and south of the north line of Township 32 North, in the NE¼ and SW¼ of the section, and no closer than 990 feet to any outer boundary of the unit and no closer than 130 feet to any interior quarter section line for the production of gas from the Fruitland Coal Seams.

 

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 the production of coalbed methane. 

 

6.            On December 17, 1990 (corrected on November 1999), the Commission entered Order No. 112-85 which approved two additional field rules established for all wells producing from the Dakota, Mesaverde, Fruitland Pictured Cliffs, and Fruitland Coal Formations to further protect the health, safety and welfare of citizens in the area.

 

7.            On July 16, 2015, Catamount, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to designate a 320-acre drilling and spacing unit for the below-described lands (“Application Lands”) pursuant to Order No. 112-85, and approve an additional well for a total of up to two horizontal wells within the unit, with the productive interval of the wellbore to be located no closer than 660 feet from the unit boundaries for the production of gas and associated hydrocarbons from the Fruitland Coal Seams, with no internal quarter section setbacks, for the production of gas and associated hydrocarbons from the Fruitland Coals Seams:

 

            Township 33 North, Range 5 West, N.M.P.M.                                              

            Section 32:      E½

           

8.            On August 24, 2015, Catamount, 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 Jared Rush, Senior Landman for Catamount, showed Catamount as the owner of a leasehold interest in the Application Lands.

 

10.          Geologic testimony and exhibits submitted in support of the Application by Russell Kelly, geologist an Senior Vice President for Catamount, included an analysis of surrounding wells showing offset Fruitland Coal production; a Fruitland Coal Type Log; a Fruitland Coal Structure Map showing the fairly simple structural style of the formation across the Application Lands; a Fruitland Coal Net Thickness Isopach Map showing the Fruitland Coal formation underlying the Application Lands to be approximately 41’ thick; and a Fruitland Coal Stratigraphic Cross Section showing the reservoir presence and continuity across the Application Lands showing that the reservoir can be more efficiently developed using horizontal drilling techniques.

 

11.          Engineering testimony and exhibits submitted in support of the Application by Craig Reid, petroleum engineer and President for Catamount, include volumetric and economic analysis supporting horizontal wellbore density of up to two wells within the 320-acre drilling and spacing unit.  Further testimony concluded the economics of the project are sound.

 

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.          Catamount 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 designate a 320-acre drilling and spacing unit for the E½ of Section 32, Township 33 North, Range 5 West, N.M.P.M., pursuant to Order No. 112-85, and approve an additional well for a total of two horizontal wells within the unit, with the productive interval of the wellbore to be located no closer than 660 feet from the unit boundaries, with no interior quarter section setbacks, for the production of gas and associated hydrocarbons from the Fruitland Coals Seams.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.            An approximate 320-acre drilling and spacing unit for the below-described lands, is hereby designated, pursuant to Order No. 112-85, for the production of gas and associated hydrocarbons from the Fruitland Coal Seams:

 

            Township 33 North, Range 5 West, N.M.P.M.                                              

            Section 32:      E½

 

2.            An additional horizontal wells, for a total of two horizontal wells, is hereby approved, for the production of gas and associated hydrocarbons from the Fruitland Coal Seams. 

 

3.            The productive interval of each wellbore is to be located no closer than 660 feet from the unit boundaries and the internal quarter section setbacks are hereby vacated.

 

IT IS FURTHER ORDERED:

 

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 35 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 29th day of October, 2015, as of October 26, 2015

 

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Julie Murphy, Secretary