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BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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IN THE MATTER THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE HIAWATHA WEST FIELD, MOFFAT COUNTY, COLORADO |
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CAUSE NO. 133
ORDER NO. 133-24 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 10:00 a.m. on October 31, 2005, in The Ramada Inn & Suites, 124 West 6th Street, Glenwood Springs, Colorado, for an order to allow up to eight (8) wells in certain 320-acre drilling and spacing units, for the production of gas and associated hydrocarbons from the Wasatch, Fort Union-Lance-Lewis and Mesaverde Formations.
FINDINGS
The Commission finds as follows:
1. Chevron USA, Inc. (“Chevron”) 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. On June 23, 1959, the Commission issued Order No. 133-1 establishing 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Wasatch, Fort Union-Lance-Lewis and Mesaverde Formations for the below-listed lands, with the permitted well to be located no closer than 660 feet from the boundaries of the drilling unit and the wells previously drilled and capable of producing shall be the permitted wells for the units on which they are located:
Township 12 North, Range 100 West, 6th P.M.
Section 17: Lots 3 through 6
Section 18: Lots 5 through 12
Section 19: All
Section 20: W½
Section 29: NW¼
Section 30: All
Township 12 North, Range 101 West, 6th P.M.
Sections 13 and 14: Lots 1 through 8
Section 15: Lots 1, 2, 7, and 8
Section 22: E½
Sections 23 through 26: All
Section 27: E½
Section 34: NE¼
Sections 35 and 36: N½
5. On December 15, 2000, the Commission issued Order No. 133-17 allowing up to four (4) wells to be drilled and completed for the production of gas and associated hydrocarbons from the Wasatch, Fort Union-Lance-Lewis and Mesaverde Formations on the 320-acre drilling and spacing unit consisting of the S½ of Section 24, Township 12 North, Range 101 West, 6th P.M. (“Unit B”).
6. On December 5, 2002, the Commission issued Order No. 133-19, amending Order No. 133-14 which had allowed a total of three (3) wells to be drilled and completed in the 320-acre drilling and spacing units consisting of the S½ of Section 19, Township 12 North, Range 100 West, 6th P.M. (“Unit A”), and allowed a total of five (5) wells be drilled and completed on said drilling and spacing unit for the production of gas and associated hydrocarbons from the Wasatch, Fort Union-Lance-Lewis and Mesaverde Formations.
7. On August 19, 2005, Chevron, by its attorney, filed with the Commission a verified application for an order to allow up to eight (8) wells in each of the 320-acre drilling and spacing units described below, for the production of gas and associated hydrocarbons from the Wasatch, Fort Union-Lance-Lewis and Mesaverde Formations.
Township 12 North, Range 100 West, 6th P.M
Section 19: S½ (“Unit A”)
Township 12 North, Range 101 West, 6th P.M
Section 24: S½ (“Unit B”)
8. Testimony and exhibits presented at the administrative hearing showed that the acreage in the application area is leased 100% by Chevron and consists solely of federal minerals and federal surface.
9. Testimony and exhibits presented at the administrative hearing showed, a structural nose dipping to the northeast/southwest and porosites in the Mesaverde, Lewis, Lance, Fort Union and Wasatch Formations ranging from nine (9) to twenty (20) percent.
10. Testimony and exhibits presented at the administrative hearing showed that the Lewis Formation is fairly continuous underlying the application lands, while the Fort Union and Wasatch Formations are discontinuous fluvial sands underlying the application lands. Further testimony showed that the permeability in the Mesaverde and Lewis Formations is consistently tight and requires stimulation.
11. Testimony and exhibits presented at the administrative hearing showed pressure tests conducted which indicated that virgin pressure exists in the Fort Union and Wasatch Formations.
12. Testimony and exhibits presented at the administrative hearing showed that the earliest drilled wells have the highest estimate ultimate recovery averaging 26.5 BCF, and that the average drainage area is 333 acres for Unit “A” and Unit “B”.
13. Testimony and exhibits presented at the administrative hearing on increased density well economics showed that the project payout will occur in thirty-one (31) months and is economically feasible.
14. Testimony and exhibits presented at the administrative hearing showed that a total of eight (8) wells are necessary to efficiently and economically drain the 320-acre drilling and spacing units in the application area while preventing waste and protecting correlative rights.
15. Chevron USA, Inc. agreed to be bound by oral order of the Commission.
16. 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 to allow up to eight (8) wells to be drilled and completed for the production of gas and associated hydrocarbons from the Wasatch, Fort Union-Lance-Lewis and Mesaverde Formations on the 320-acre drilling and spacing units described above in Finding No. 4.
ORDER
NOW, THEREFORE IT IS ORDERED, that up to eight (8) wells are hereby allowed to be drilled and completed for the production of gas and associated hydrocarbons from the Wasatch, Fort Union-Lance-Lewis and Mesaverde Formations on the 320-acre drilling and spacing units described below:
Township 12 North, Range 100 West, 6th P.M
Section 19: S½ (“Unit A”)
Township 12 North, Range 101 West, 6th P.M
Section 24: S½ (“Unit B”)
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 November, 2005 as of October 31, 2005.
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