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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 IN THE GRAND VALLEY FIELD AND RULISON FIELD, GARFIELD COUNTY, COLORADO |
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CAUSE NOS. 139, 479, 495 and 510
ORDER NOS. 139-32, 479-6, 495-2 and 510-3
CORRECTED |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on January 7, 1998 in Suite 801, 1120 Lincoln Street, Denver, Colorado on the verified application of Barrett Resources Corporation ("Barrett") for an order establishing drilling and spacing units for the certain lands in the Grand Valley Field and Rulison Field. Forty (40) acre drilling and spacing units are requested for lands which are currently unspaced and within these 40-acre drilling and spacing units, the Applicant requests up to two (2) well be authorized to be drilled into and produced from the Williams Fork Formation of the Mesaverde Group. On certain lands which are currently spaced, the Applicant requests the equivalent of one (1) Williams Fork Formation well per twenty (20) acres.
FINDINGS
The Commission finds as follows:
1. Barrett Resources Corporation, 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 26, 1962, the Commission issued Order No. 139-3, which amended Order No. 139-2 to extend the Rulison Field to include in part, the below-listed lands for 640-acre drilling and spacing units for production from the Mesaverde and Wasatch Formations, with the permitted well to be located 990 feet from the boundaries of the quarter section:
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Township 7 South, Range 96 West, 6th P.M. |
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Section 1: All |
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Garfield County, Colorado |
5. On February 20, 1990, the Commission issued Order No. 479-1, which among other things, established 320-acre drilling and spacing units for production from the Mesaverde Formation for certain lands in Townships 6 and 7 South, Range 96 West, 6th P.M. Subsequent Order No. 479-2 issued April 20, 1990 and corrected November 11, 1990, included additional lands to be spaced for production from the Mesaverde Formation and established the NW¼ and NE¼ of Section 36, Township 6 South, Range 96 West, 6th P.M., as 160-acre drilling and spacing units. Said drilling units consist of the E½ and W½ or the N½ and S½ of a section, with the permitted well to be located no closer than 600 feet from the boundaries of the unit and no closer than 1200 feet from any well producing from the Mesaverde Formation. An additional option well may be drilled in accordance with the rule that any permitted well shall be located no closer than 600 feet from the boundaries of any other unit and no closer than 1200 feet from any well producing from the Mesaverde Formation. The below-listed lands are included in part in the Grand Valley Field:
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Township 6 South, Range 96 West, 6th P.M. |
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Section 27: All |
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Sections 34 – 36: All |
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Township 7 South, Range 96 West, 6th P.M. |
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Section 1: All |
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Garfield County, Colorado |
6. On June 14, 1991, the Commission issued Order No. 495-1, which established 160-acre drilling and spacing units for certain lands including in part the SE¼ of Section 28, Township 6 South, Range 96 West, 6th P.M. for the production of gas and associated hydrocarbons from the Mesaverde Formation with the permitted well to be located no closer than 600 feet to the boundaries of the unit and no closer than 1,200 feet from any other well producing or producible from the same formation.
7. On February 22, 1994, the Commission issued Order Nos. 440-14, 479-3, and 139-26 which allowed an increase in the number of wells that could be optionally drilled into and produced from the Williams Fork Formation of the Mesaverde Group. For the 320-acre drilling and spacing units established for the lands listed below in part, four (4) wells shall be allowed to be optionally drilled into and produced from the Williams Fork Formation, with the permitted well to be located no closer than 600 feet from the lease line nor 1,200 feet from any other producible or drilling oil and gas well in the Williams Fork Formation.
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Township 6 South, Range 96 West, 6th P.M. |
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Section 27: All |
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Sections 34 - 35: All |
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Section 36: S½ |
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Township 7 South, Range 96 West, 6th P.M. |
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Section 1: All |
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Garfield County, Colorado |
8. On May 16, 1994, the Commission issued Order No. 510-1, which among other things amended Rule 316. (now Rule 318.) for the lands listed below in part to allow permitted wells to be located no closer than 400 feet from the boundaries of the unit and no closer than 800 feet from the existing Williams Fork Formation well.
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Township 6 South, Range 96 West, 6th P.M. |
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Section 28 - 33: All |
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Township 7 South, Range 96 West, 6th P.M. |
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Sections 2 - 3: All |
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Garfield County, Colorado |
9. On February 21, 1995, the Commission issued Order Nos. 440-16, 479-5 and 139-28, which, among other things, allowed four (4) wells listed below in part, to be optionally drilled into and produced from the Williams Fork Formation, for the 320-acre drilling and spacing units with the permitted well to be located no closer than 400 feet from the boundaries of the unit and no closer than 800 feet from any existing Williams Fork Formation well or wells.
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Township 6 South, Range 96 West, 6th P.M. |
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Section 27: All |
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Sections 34 - 35: All |
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Section 36: S½ |
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Township 7 South, Range 96 West, 6th P.M. |
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Section 1: All |
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Garfield County, Colorado |
10. On October 14, 1997, Barrett Resources Corporation, by its attorney, filed with the Commission a verified application, for an order establishing drilling and spacing units for the below-listed lands. Forty (40) acre drilling and spacing units are requested for lands which are currently unspaced and within these 40-acre drilling and spacing units, the Applicant requests up to two (2) wells be authorized to be drilled into and produced from the Williams Fork Formation of the Mesaverde Group. For the below-listed lands which are currently spaced, the Applicant requests the equivalent of one (1) Williams Fork Formation well per 20 acres. The permitted well should be located no closer than 200 feet from the boundaries of the drilling and spacing unit and no closer than 400 feet from any existing Williams Fork Formation well. In cases where the below-listed application lands constitute only a portion of an existing drilling and spacing unit, each Williams Fork Formation well should be located no closer than 200 feet from the boundaries of the drilling unit, no closer than 200 feet from the boundaries of the application lands and no closer than 400 feet from any existing Williams Fork Formation well.
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Township 6 South, Range 96 West, 6th P.M. |
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Section 27: SW¼ SW¼ |
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Section 28: S½ S½ |
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Section 29: SE¼ SE¼ |
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Section 32: SE¼ NW¼, W½ NE¼, NE¼ NE¼ |
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Section 33: N½ SE¼, NE¼, N½ NW¼, SE¼ NW¼ |
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Section 34: SE¼ NW¼, S½, NW¼ NW¼ |
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Section 35: SW¼ SW¼, SE¼ SE¼ |
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Section 36: SW¼, W½ SE¼ |
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Township 7 South, Range 96 West, 6th P.M. |
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Section 1: S½ N½, N½ NW¼, N½ S½ |
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Section 2: N½, SW¼, W½ SE¼, NE¼ SE¼ |
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Section 3: NE¼ |
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Garfield County, Colorado |
11. The Commission finds that the mineral estate and the surface estate underlying the Application Area is owned by Mr. William Clough, Vastar/Heath, the State of Colorado and D & RG Railroad.
12. On or about December 12, 1997, Mr. Clough, as the owner of approximately 8,400 acres of the Application Area submitted a letter in support of the Application.
SAVAGE INTERVENTION
13. On December 19, 1997, Joan L. Savage filed with the Commission a Motion to Intervene on the grounds that Barrett’s application did not adequately address potential adverse impacts to ground water that may result from the drilling of additional wells in the Application Area.
14. On December 30, 1997, the Applicant filed a Motion to disqualify John W. Savage, Counsel for Joan L. Savage based on John Savage’s participation in the proceedings as counsel and as a fact witness.
15. On January 5, 1998, the Commission received a faxed letter from John W. Savage, stating that due to scheduling conflicts he would be unable to attend the Commission hearing on January 6 and January 7, 1998, asking that the issues raised in the Motion to Intervene be considered without a factual presentation.
16. At the January Hearing neither the intervenor, Ms. Savage, nor her counsel was present. A member of the Savage family, Mr. Daniel Savage, was present.
17. At the January Hearing the Commission determined that Ms. Savage owned no mineral interest in the Application Area.
18. At the January Hearing the Commission determined that Ms. Savage owned no surface interest in the Application Area.
19. At the January Hearing the Commission determined that Ms. Savage did not receive notice of the Proceeding [sic] as an interested party pursuant to Rule 508 of the Rules and Regulations of the Oil and Gas Conservation Commission.
20. At the January Hearing, the Commission denied intervenor status to Joan L. Savage based on the fact that she did not own a mineral or surface in interest in the Application Area and the Fact that neither she nor her counsel appeared at the Proceeding.
21. At the January Hearing the Commission considered the issues raised in Ms. Savage’s intervention on the Commission’s own accord.
22. In lieu of the intervention, the Commission allowed Ms. Savage’s representative to make a statement at the January Hearing pursuant to Rule 510 that was included in the administrative record.
23. After hearing all the evidence at the January Hearing the Commission found that Barrett adequately addressed the concerns for ground water protection raised in the Savage Pleading.
GARFIELD COUNTY PROTEST/INTERVENTION
24. On December 26, 1997, the Commission received a letter from the Office of Emergency Management in Garfield County styled as an Official Notice of Protest under Rule 509.
25. On December 30, 1997, Director Griebling telefaxed to the Garfield County representative a request for certification of the Protest filed on December 26, and inquired whether Garfield County would have a representative present at the January Hearing.
26. On January 5, 1998, Garfield County provided to the Commission a letter via telefax stating that the pleading filed on December 26 should be considered a request to intervene on matters related the public health, safety and welfare.
27. The January 5, 1998, letter from Garfield County requested an extension of the Hearing Date until after February 19, 1998.
28. At the January Hearing the Commission found that Garfield County’s original pleading would not be accepted as a protest because Garfield County is not a proper protestant in this matter.
29. At the January Hearing the Commission found that the letter submitted to clarify Garfield County’s position was filed after the final date for protests or interventions required by Rule 509.
30. At the January Hearing the Commission determined it would accept the pleading filed by Garfield County on December 23, 1997, as an intervention filed pursuant to Rule 509.b. Barrett objected to the Commission ruling.
31. After accepting the Garfield County Intervention the Commission considered Garfield County’s request for a continuance.
32. The Commission was advised that Barrett met with Garfield County representatives in Garfield County several weeks prior to the scheduled hearing and that Barrett had voluntarily provided Garfield County with its data in support of the Application.
33. The Commission found that the Application and the January Hearing were scheduled with sufficient time for Garfield County to participate as and intervenor pursuant to Rule 509.b.
34. The Commission found that Garfield County had not demonstrated good cause for a continuance as required by Rule 506.c. and therefore denied the request for continuance.
35. Despite the Commission’s decision to proceed with the hearing on the Application, the Commission finds that Barrett, on its own accord, presented evidence to address the potential impact the Application and increased well density may have on public health, safety and welfare.
PUBLIC COMMENT/PARTICIPATION
36. Letters or telephone contacts in opposition to the application were received from twenty-eight (28) Garfield County Residents, and from the Grand Valley Citizens’ Alliance.
37. Letters in support of the application were received from the mineral and surface owners within the Application Area, including William Clough, Unocal Corporation, the Vassar Company, Yates Petroleum and Richard L. Heath.
38. Pursuant to Rule 510., Janey Hines, Carol Frederick and Daniel Savage made statements in opposition to the Application stating concerns about the potential adverse impacts to the environment and to public health, safety and welfare that might occur if the Commission granted the Application.
39. Pursuant to Rule 510., with Barrett’s consent, Mr. Welton Francis, a representative for the Battlement Mesa Homeowners’ Association submitted a written statement in opposition to the Application for the inclusion in the administrative record.
TECHNICAL EVIDENCE
40. The Commission heard expert testimony from Joe Barrett, J.D., Vice President, Land regarding ownership of the land in the Application Area who testified that the surface and mineral owners within the Application Area supported the Application.
41. The Commission heard expert testimony from Robert E. Mueller, Senior Geologist for Barrett regarding the geologic development in the area, the production and drainage of the Williams Fork Formation who opined that the granting the Application would minimize waste and maximize production from the Williams Fork Formation.
42. The Commission heard expert testimony from Paul T. Branagan, a consulting physicist and past technical manger [sic] for the Department of Energy’s MWX Geologic/Geophysical Research Project located in the Rulison Field regarding the geologic development of the Williams Fork Formation who opined that additional wells were appropriate to prevent waste and maximize production.
43. The Commission heard expert testimony from Ted D. Brown, Senior Petroleum Engineer for Barrett regarding drainage of the Williams Fork reservoir underlying the Application Area who opined that additional wells would increase the productive capability of the application Area.
44. Based on the technical testimony presented by Barrett the Commission found that one well will not efficiently and economically drain the drilling and spacing units previously designated by the Commission, and that based on geological and engineering data, additional wells are necessary to prevent waste and protect correlative rights, and to recover gas and associated hydrocarbons from the Williams Fork Formation within the Application Area.
NON-TECHNICAL EVIDENCE
45. The Commission heard expert testimony from Dr. Owen R. Phillips, an economics and finance professor from the University of Wyoming who opined regarding the economic benefits to the State of Colorado and to Garfield County that would result from the increased well density requested in the Application.
46. The Commission heard expert testimony form [sic] Duane Zavadil, Manager of Health, Safety and Environmental Matters for Barrett, regarding Barrett’s Operational Policy for Wildlife designed to mitigate the effects that additional drilling may have on wildlife within the Application Area, and on Barrett’s Reclamation Plan for the additional wells drilled within the Application Area designed to mitigate surface impacts resulting from additional drilling within the Application Area.
47. The Commission heard expert testimony from Craig L. Kling, a Certified Wildlife Biologist who opined on the merits of Barrett’s plans to mitigate the impact on wildlife potentially resulting from increased drilling density within the Application Area.
48. The Commission heard expert testimony from Mr. Craig Stewart, a consulting engineer and hydrologist who opined on the potential impact to ground water and Barrett’s efforts to mitigate any risks occasioned by increased drilling within the Application Area.
49. The Commission heard testimony from COGCC staff engineer Jaime Adkins and Deputy Director Brian Macke in reference to bradenhead testing requirements and results demonstrating that the COGCC regulations adequately protect ground water in the Application Area.
50. The Commission finds that based on the expert testimony presented by Barrett and corroborating testimony from Commission staff that granting the Application will not result in any significant adverse impact to the environment or to public health, safety or welfare.
51. Based on the facts stated in the application and the testimony and exhibits presented by Barrett at the January Hearing, the Commission finds that the request to establish drilling and spacing units for the lands described in Finding #10 in the Grand Valley Field and Rulison Field should be approved. Forty (40) acre drilling and spacing units are requested for lands which are currently unspaced and within these 40-acre drilling and spacing units, Applicant requests up to two (2) well be authorized to be drilled into and produced from the Williams Fork Formation of the Mesaverde Group. On the lands which are currently spaced, the Applicant requests the equivalent of one (1) Williams Fork Formation well per 20 acres.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Cause No. 510-1 is hereby amended to establish 40-acre drilling and spacing units for the below-listed lands which were previously unspaced and within these 40-acre drilling and spacing units, up to two (2) wells shall be authorized to be drilled into and produced from the Williams Fork Formation of the Mesaverde Group:
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Township 6 South, Range 96 West, 6th P.M. |
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Section 28: S½ S½ |
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Section 29: SE¼ SE¼ |
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Section 32: SE¼ NW¼, W½ NE¼, NE¼ NE¼ |
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Section 33: N½ SE¼, NE¼, N½ NW¼, SE¼ NW¼ |
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Township 7 South, Range 96 West, 6th P.M. |
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Section 2: N½, SW¼, W½ SE¼, NE¼ SE¼ |
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Section 3: NE¼ |
IT IS FURTHER ORDERED, that Order Nos. 440-14, 479-3 and 139-26 which allowed four (4) wells to be drilled on 320-acre drilling and spacing units for production from the Williams Fork Formation of the Mesaverde Group are hereby amended to allow the equivalent of one (1) Williams Fork Formation well per 20 acres for the below-listed lands:
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Township 6 South, Range 96 West, 6th P.M. |
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Section 27: SW¼ SW¼ |
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Section 34: SE¼ NW¼, S½, NW¼ NW¼ |
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Section 35: SW¼ SW¼, SE¼ SE¼ |
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Section 36: SW¼, W½ SE¼ |
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Township 7 South, Range 96 West, 6th P.M. |
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Section 1: S½ N½, N½ NW¼, N½ S½ |
IT IS FURTHER ORDERED, that Cause Nos. 139, 479, 495 and 510 are amended and the permitted well shall be located no closer than 200 feet from the boundaries of the drilling and spacing unit and no closer than 400 feet from any existing Williams Fork Formation well. In cases where the above-listed application lands constitute only a portion of an existing drilling and spacing unit, each Williams Fork Formation well shall be located no closer than 200 feet from the boundaries of the drilling unit, no closer than 200 feet from the boundaries of the application lands and no closer than 400 feet from any existing Williams Fork Formation well.
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 6th day of February, 1998.
CORRECTED this 21st day of March, 2000 [sic]
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OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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By |
Patricia C. Beaver, Secretary |
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
March 21, 2000