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 FRUIT-LAND COAL FIELD, LA PLATA AND ARCHULETA COUNTIES, COLORADO

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CAUSE NO. 112

 

ORDER NO. 112-73

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission on September 18, 1989 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of U.S. Exploration Company, for an order allowing the drilling of a second Fruitland Coal seam well on each of three drilling and spacing units encompassed by Orders No. 112-60 and 112-61.

 

FINDINGS

 

The Commission finds as follows:

 

1.      U.S. Exploration Company, 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.

 

4.      The matter was scheduled for hearing on August 21, 1989, but the Commission continued the matter to the September 1989 hearing of the Commission.

 

5.      Protests were entered on behalf of ARCO Oil and Gas Company, Texaco, Inc. and Amoco Production Company.  The Southern Ute Indian Tribe submitted a written statement.

 

6.      Extensive testimony was presented by the applicant concerning production mechanisms in coal seams including permeability that is stress dependent.  Testimony was given relating to computer simulation models and results obtained using parameters measured from coal samples.  A plan of development and operation for the three units was presented. Economic projections were presented.

 

7.      The protestants presented testimony concerning computer modeling, a different interpretation of the possibility of permeability change mechanisms, and that a radial drainage pattern based on 160-acre spacing could result in uncompensated drainage.

 

8.      That the Commission is unanimous in denying the application at this time because of correlative rights problems that could develop from uncompensated drainage, because any changes made to the initial spacing order should be considered for the entire area or at least larger areas within the spaced area, and because the present coalbed methane development is based on extensive testimony in the first several hearings held during 1988 that indicated 320-acre drilling and spacing units were of a size that insures proper and efficient development.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED, the application of U.S. Exploration Company for an order allowing a second well to be drilled for production from the Fruitland Coal seam for the drilling and spacing units listed below is denied:

 

Township 33 North, Range 9 West, N.M.P.M.

Section 35:  W1/2; E1/2;

Section 36:  E1/2

 

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 28th day of September, 1989, as of September 18, 1989.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By 

Dennis R. Bicknell, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado  80203