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 FOR THE WILLIAMS FORK FORMATION, RULISON FIELD, GARFIELD COUNTY, COLORADO |
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CAUSE NO. 139
DOCKET NO. 151000609
TYPE: POOLING
ORDER NO. 139-123
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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 an application for an order to: 1) establish an approximate 320-acre drilling and spacing unit for the E˝ of Section 8, Township 7 South, Range 93 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation; and 2) pool all interests for the approximate 320-acre drilling and spacing unit, for the drilling of the Federal RU #542-8 Well and Federal RU #642-8 Well, for the development and operation of the Williams Fork Formation.
FINDINGS
The Commission finds as follows:
1. WPX Energy Rocky Mountain, LLC (“WPX” 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 herein, and jurisdiction to promulgate the hereinafter prescribed order pursuant to the Oil and Gas Conservation Act.
4. On July 23, 2007, the Commission entered Order No. 139-76 which, among other things, approved the equivalent of one well per 10 acres for certain lands found in Township 7 South, Ranges 93 and 94 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation, permitting any Williams Fork wells to be located downhole anywhere upon the lands but no closer than 100 feet from a lease line or unit boundary, unless the lease line or unit boundary abuts or corners lands which have not been approved for 10-acre density drilling of the Williams Fork Formation, in which event the permitted well will be located no closer than 200 feet from the lease line or unit boundary, with a surface location either vertically or directionally from no more than one well pad per quarter quarter section (or lots or parcels approximately equivalent thereto).
5. On August 27, 2015, WPX, by its attorneys, filed its verified application (“Application”) for an order to: 1) establish an approximate 320-acre drilling and spacing unit for the below-described lands (“Application Lands”), for the production of gas and associated hydrocarbons from the Williams Fork Formation; and 2) pool all interests within an approximate 320-acre drilling and spacing unit established for the Application Lands, for the development and operation of the Williams Fork Formation, and to subject any nonconsenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., effective as of the earlier of the date of the Application or the date that the costs specified in §34-60-116(7)(b), C.R.S., are first incurred for the drilling of the Federal RU #542-8 Well (API No. 05-045-22796) and Federal RU #642-8 Well (API No. 05-045-22755) (“Wells”):
Township 7 South, Range 93 West, 6th P.M.
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6. On October 5, 2015, WPX, by its attorney, filed its request for a recommendation for approval of its Application without a hearing.
7. Land testimony and exhibits submitted in support of the Application by Christopher M. Walsh, Sr. Staff Landman for WPX, showed that all nonconsenting interest owners were notified of the Application and received an Authority for Expenditure (“AFE”) and offer to participate in the drilling and completion of the Wells. Further testimony concluded the AFE sent by the Applicant to the nonconsenting owners was a fair and reasonable estimate of the costs of the proposed drilling operations and was received at least 35 days prior to the October 26, 2015, hearing date.
8. It is further requested that the Commission take administrative notice of the Application File under Order No. 139-76, which resulted in the Commission approving the equivalent of one well per 10 acres for the Application Lands, for the production of gas and associated hydrocarbons from the Williams Fork Formation, and authorizing any Williams Fork wells to be located downhole anywhere upon the lands but no closer than 100 feet from a lease line or unit boundary, unless the lease line or unit boundary abuts or corners lands which have not been approved for 10-acre density drilling of the Williams Fork Formation, in which event the permitted well will be located no closer than 200 feet from the lease line or unit boundary, with a surface location either vertically or directionally from no more than one well pad per quarter quarter section (or lots or parcels approximately equivalent thereto). The Application does not seek to alter any portion of Order No. 139-76 addressing well density, appropriate downhole setbacks or permissible surface disturbances.
9. On October 21, 2015, counsel for WPX withdrew the request to pool all interests within the approximate 320-acre drilling and spacing unit, for the drilling of the Federal RU #542-8 Well and Federal RU #642-8 Well, for the development and operation of the Williams Fork Formation.
10. 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.
11. WPX agrees to be bound by the oral order of the Commission.
12. 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 establish an approximate 320-acre drilling and spacing unit for the E˝ of Section 8, Township 7 South, Range 93 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation.
ORDER
NOW, THEREFORE IT IS ORDERED, that:
1. An approximate 320-acre drilling and spacing unit for the below-described lands, is hereby established, for the production of gas and associated hydrocarbons from the Williams Fork Formation:
Township 7 South, Range 93 West, 6th P.M.
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2. The existing well density equivalent of one well per 10 acres is hereby maintained within the unit.
3. The productive interval of the permitted wells shall be located no closer than 100 feet from the unit boundary, unless the unit boundary abuts or corners lands which have not been approved for 10-acre density drilling of the Williams Fork Formation, in which event the permitted well will be located no closer than 200 feet from the unit boundary, with a surface location either vertically or directionally from no more than one well pad per quarter quarter section (or lots or parcels approximately equivalent thereto).
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 4th day of November, 2015, as of October 26, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Julie Murphy, Secretary