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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 RULISON FIELD, GARFIELD COUNTY, COLORADO
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CAUSE NO. 139
ORDER NO. 139-47 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 9:00 a.m. on June 6, 2005 in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado on the application of Petrogulf Corporation for an order to establish 640-acre drilling and spacing units for certain lands, to designate existing 320-acre drilling and spacing units as stand-up units for certain lands in Township 6 South, Range 93 West, 6th P.M., and to allow the equivalent of one Williams Fork Formation well per ten acres, with the permitted well to be located no closer than 100 feet from the boundaries of the drilling and spacing units for the below-listed lands. In cases where the Application Lands abut or corner lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill 10 acre density Williams Fork Formation Wells, the well should be located downhole no closer than 200 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.
FINDINGS
The Commission finds as follows:
Township 6 South, Range 93 West, 6th P.M.
Sections 19 and 20: All
2. Rule 318.a. of the Rules and Regulations of the Commission requires that wells drilled in excess of two thousand five hundred (2,500) feet in depth be located not less than six hundred (600) feet from any lease line, and located not less than one thousand two hundred (1,200) feet from any other producible or drilling oil or gas well when drilling to the same common source of supply, unless authorized by order of the Commission upon hearing. The below-listed lands are subject to Rule 318.a.
Township 6 South, Range 93 West, 6th P.M.
Sections 29 through 32: All
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3. On April 13, 2005, Petrogulf Corporation (“Petrogulf”), by its attorney, filed with the Commission a verified application for an order to establish 640-acre drilling and spacing units and to allow the equivalent of one Williams Fork Formation well per ten acres, with the permitted well to be located no closer than 100 feet from the boundaries of the drilling and spacing units for the below-listed lands. In cases where the Application Lands abut or corner lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill 10 acre density Williams Fork Formation wells, the well should be located downhole no closer than 200 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.
Township 6 South, Range 93 West, 6th P.M.
Sections 29 through 32: All
Township 6 South, Range 93 West, 6th P.M.
Sections 19 and 20: All
5. In addition, Petrogulf requested the order specify that wells will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section unless exception is granted by the Colorado Oil and Gas Conservation Commission pursuant to application made for such exception.
6. On May 11, 2005, the Board of County Commissioners of Garfield County filed with the Commission an intervention on the application.
7. On May 16, 2005, amended on May 17, 2005, EnCana Oil and Gas (USA), through its attorney, filed with the Commission a protest. On May 19, 2005, EnCana Oil and Gas (USA), through its attorney, filed with the Commission a letter withdrawing its protest.
8. On May 19, 2005, a prehearing conference was held with representatives from Garfield County to discuss the County’s intervention. At the time of the prehearing conference, Petrogulf indicated that it had provided the County with a copy of its Helmer Gulch Implementation Plan which was modeled after a plan previously submitted by Bill Barrett Corporation. Petrogulf agreed to abide by this plan and would like the plan to be included as part of any order issued on this application. Garfield County indicated its request of Petrogulf to also abide by the Well Cementing Procedure and Reporting Requirements in the Notice to Operators Drilling Mesaverde Group or Deeper Wells in the Mamm Creek Field Area dated July 23, 2004. Petrogulf agreed to this and also stated its concurrence with including this requirement in any order issued on this application.
9. Testimony and exhibits presented at the administrative hearing showed that the application lands are located slightly south and west of the Town of Rifle, and the application area is surrounded by lands previously spaced for ten (10) acre density and by Federal units.
10. Testimony and exhibits presented at the administrative hearing showed the mineral ownership in the application area indicating that leases are held by Petrogulf, Williams Production Company, and EnCana Oil and Gas (USA). Representatives from Williams Production Company attending the administrative hearing, indicated its support of the application.
11. Testimony and exhibits presented at the administrative hearing showed the depositional environment of the Williams Fork Formation, that the Williams Fork Formation has thicknesses of 2000 feet in the point bar sands, having limited lateral extent and very low permeability.
12. Testimony and exhibits presented at the administrative hearing showed that seventy-nine percent (79%) of the one hundred thirty-seven (137) sand bodies had an aerial extent of less than seven hundred and fifty (750) feet and that approximately eighty (80) of the one hundred and thirty-seven (137) sand bodies measured had a lateral extent of five hundred (500) feet or less.
13. Testimony and exhibits presented at the administrative hearing showed that wells drilled only nine hundred feet (900’) apart showed poor correlation between sand bodies. Additional testimony showed that wells drilled on six hundred and sixty feet (660’) spacing showed seventy-nine percent (79%) of the sands to be different.
14. Petrogulf Corporation agreed to be bound by oral order of the Commission.
15. Based on the facts stated in the verified application and having been heard by the Hearing Officer who recommended approval, the Commission should enter an order to establish 640-acre drilling and spacing units and to allow the equivalent of one Williams Fork well per ten acres, with the permitted well to be located no closer than 100 feet from the boundaries of the drilling and spacing units for the below-listed lands.
NOW, THEREFORE, IT IS ORDERED, that 640-acre drilling and spacing units are hereby established allowing the equivalent of one Williams Fork well per ten acres, with the permitted well to be located no closer than 100 feet from the boundaries of the drilling and spacing units for the below-listed lands. In cases where the Application Lands abut or corner lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill 10 acre density Williams Fork Wells, the well shall be located downhole no closer than 200 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.
Township 6 South, Range 93 West, 6th P.M.
Sections 29 through 32: All
Township 6 South, Range 93 West, 6th P.M.
Sections 19 and 20: All
IT IS FURTHER ORDERED, that the wells to be drilled under this Application shall be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section unless exception is granted by the Colorado Oil and Gas Conservation Commission pursuant to application made for such exception.
IT IS FURTHER ORDERED, that Petrogulf Corporation shall comply with the terms and provisions of the Helmer Gulch Implementation Plan and the the Well Cementing Procedure and Reporting Requirements in the Notice to Operators Drilling Mesaverde Group or Deeper Wells in the Mamm Creek Field Area dated July 23, 2004 which are incorporated by reference herein.
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 June, 2005, as of June 6, 2005.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Patricia Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
June 20, 2005