BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION ) CAUSE NOS. 139 & 440
AND ESTABLISHMENT OF FIELD RULES TO )
GOVERN OPERATIONS IN THE RULISON FIELD, ) ORDER NOS. 139-61 & 440-33
GARFIELD AND MESA COUNTIES, COLORADO ) CORRECTED
This cause came on for hearing before the Commission at 10:00 a.m. on June 5, 2006, in the Council Chamber Room of the Ambulance Building, 304 West 3rd Street, Wray, Colorado, for an order to establish 40-acre drilling and spacing units for certain lands in Townships 7 and 8 South, Range 95 West, 6th P.M., for production of gas and associated hydrocarbons from the Williams Fork and Iles Formations, allowing up to one (1) well per 10 acres with the option of up to four (4) wells, with the permitted well to be located no closer than one hundred (100) feet from the unit boundary, and no closer than two hundred (200) feet from the unit boundaries where 10-acre density drilling has not been allowed, without exception being granted by the Director of the Oil and Gas Conservation Commission. In addition, the order should also clarify that Order Nos. 139-45 and 139-51, which established 40-acre drilling and spacing units and 10-acre density for the Williams Fork and Iles Formations underlying Resurvey Tract 41, located in Section 18 of Township 8 South, Range 95 West of the 6th P.M., also apply to that portion of Resurvey Tract 41 which is located in Section 19, Township 8 South, Range 95 West of the 6th P.M.
The Commission finds as follows:
1. Noble Energy, Inc. (“Noble”), 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 pursuant to the Oil and Gas Conservation Act.
4. 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. The below-listed lands are subject to this rule.
Township 8 South, Range 95 West, 6th P.M.
Section 18: W½ NE¼
SE¼
Resurvey Tract 38
Resurvey Tract 39
5. On May 19, 1990, the Commission issued Order No. 139-16 which among other things, established 640-acre drilling and spacing units from the production of gas from the Mesaverde Formation, for the below-listed lands:
Township 7 South, Range 94 West, 6th P.M.
Sections 17 through 20: All
Section 30: All
Township 7 South, Range 95 West, 6th P.M.
Section 32: S½ N½, S½
6. Subsequent Order Nos. 139-31 and 440-18 amended Order No. 139-16 and among other things, allowed sixteen (16) wells to be drilled on the 640-acre drilling and spacing units for certain lands including Sections 17 and 20, Township 7 South, Range 94 West, 6th P.M. and Section 32, Township 7 South, Range 95 West, 6th P.M.
7. On February 13, 2004, the Commission issued Order No. 139-43, which among other things, allowed the number of wells to be drilled for the production of gas from the Williams Fork Formation to one (1) well per 40 acres for certain lands including Section 30, Township 7 South, Range 94 West, 6th P.M.
8. On December 6, 2005, the Commission issued Order No. 139-53, which among other things, increased the number of wells allowed to be drilled for production of gas and associated hydrocarbons from the Williams Fork Formation, the equivalent of one (1) well per 10 acres for certain lands including Sections 19 and 30, Township 7 South, Range 94 West, 6th P.M.
9. On March 20, 2006, the Commission entered Order No. 139-55, which vacated the 640-acre drilling and spacing unit consisting of Section 32, Township 7 South, Range 95 West, 6th P.M. and established a 160-acre drilling and spacing unit consisting of the N½ N½ of said Section 32. The S½ N½ and S½ of Section 32, Township 7 South, Range 95 West, 6th P.M. are unspaced and therefore subject to Rule 318.a. of the Rules and Regulations of the Commission.
10. On April 24, 2006, the Commission issued Order Nos. 139-59 and 510-19, which among other things, established one (1) well per 10 acres for production of gas and associated hydrocarbons from the Iles Formation allowing no more than four (4) Iles Formation wells downhole per government quarter quarter section, with the permitted well to be located no closer than one hundred (100) feet from the unit boundary and no closer than two hundred (200) feet from the unit boundary where 10-acre density has not been allowed, for the below-listed lands. Said wells shall be drilled from the surface either vertically or directionally from no more than one (1) pad located on a given quarter quarter section unless exception is granted by the Director of the Oil and Gas Conservation Commission.
Township 7 South, Range 94 West, 6th P.M.
Sections 17 through 20: All
Section 30: All
Township 7 South, Range 95 West, 6th P.M.
Section 32: S½ N½, S½
11. On April 17, 2006, Noble Energy, Inc., by its attorney, filed with the Commission a verified application for an order to establish 40-acre drilling and spacing units for the below-listed lands for production of gas and associated hydrocarbons from the Williams Fork and Iles Formations, allowing up to one (1) well per 10-acres with the option of up to four (4) wells, with the permitted well to be located no closer than one hundred (100) feet from the unit boundary, and no closer than two hundred (200) feet from the unit boundaries where 10-acre density drilling has not been allowed, without exception being granted by the Director of the Oil and Gas Conservation Commission. Said wells will be drilled from the surface either vertically or directionally from no more than one (1) pad located on a given quarter quarter section, unless exception is granted by the Director of the Oil and Gas Conservation Commission.
Township 7 South, Range 95 West, 6th P.M.
Section 32: S½ N½, S½
Township 8 South, Range 95 West, 6th P.M.
Section 18: W½ NE¼
SE¼
Resurvey Tract 38
Resurvey Tract 39
In addition, the order should allow one (1) well per 10 acres to be drilled for production of gas and associated hydrocarbons from the Williams Fork Formation with no more than four (4) Williams Fork Formation wells downhole per government quarter quarter section, with the permitted well to be located no closer than one hundred (100) feet from the unit boundary and no closer than two hundred (200) feet from the unit boundary where 10-acre density has not been allowed, for the below-listed lands. Said wells will be drilled from the surface either vertically or directionally from no more than one (1) pad located on a given quarter quarter section unless exception is granted by the Director of the Oil and Gas Conservation Commission.
Township 7 South, Range 94 West, 6th P.M.
Sections 17 through 20: All
Section 30: All
Township 7 South, Range 95 West, 6th P.M.
Section 32: S½ N½, S½
Further, the order should also clarify that Order Nos. 139-45 and 139-51, which established 40-acre drilling and spacing units and 10-acre density for the Williams Fork and Iles Formations underlying Resurvey Tract 41, located in Section 18 of Township 8 South, Range 95 West of the 6th P.M., also apply to that portion of Resurvey Tract 41 which is located in Section 19, Township 8 South, Range 95 West of the 6th P.M.
12. On May 23, 2006, Noble, by its attorney, filed with the Commission a written request to approve the application based on the merits of the verified application and the supporting exhibits. In addition, testimony and exhibits were presented to the Hearing Officers during the April 18, 2006 administrative hearing on nearby and adjacent lands to these application lands.
13. Testimony and exhibits presented at the administrative hearing showed that based on the geological interpretation that 10-acre well density would be required to properly drain the Williams Fork and Iles Formations within the application area.
14. Testimony and exhibits presented at the administrative hearing showed that one (1) well located near the application area would drain 7.8 acres and have an estimated ultimate recovery of 534.5 MMCF of gas from the Williams Fork and Iles Formations. Additional testimony showed that another well located near the application area would drain 8.7 acres and have an estimated ultimate recovery of 1091 MMCF of gas from the Williams Fork Formation.
15. Testimony and exhibits presented at the administrative hearing showed that the project is feasible from engineering and economical standpoints, and that 10-acre well density would be required to properly drain the Williams Fork and Iles Formations within the application lands.
16. No protests to the application have been filed with the Commission or the Applicant.
17. Noble Energy, Inc. agreed to be bound by oral order of the Commission.
18. Based on the facts stated on the verified application and the Hearing Officer review of the application under Rule 511.b., the Commission at its hearing on June 5, 2006 approve the application should enter an order to establish 40-acre drilling and spacing units, allow up to one (1) well per 10 acres, with the permitted will to be located no closer than 100 feet from the unit boundary or lease line, and to clarify that Order Nos. 139-45 and 138-51 apply to that portion of Resurvey Tract 41, which is located in Section 19, Township 8 South, Range 95 West of the 6th P.M.
ORDER
NOW, THEREFORE, IT IS ORDERED, that 40-acre drilling and spacing units for the below-listed lands are hereby establish, for production of gas and associated hydrocarbons from the Williams Fork and Iles Formations, allowing up to one (1) well per 10 acres with the option of up to four (4) wells, with the permitted well to be located no closer than one hundred (100) feet from the unit boundary, and no closer than two hundred (200) feet from the unit boundaries where 10-acre density drilling has not been allowed, without exception being granted by the Director of the Oil and Gas Conservation Commission. Said wells shall be drilled from the surface either vertically or directionally from no more than one (1) pad located on a given quarter quarter section, unless exception is granted by the Director of the Oil and Gas Conservation Commission.
Township 7 South, Range 95 West, 6th P.M.
Section 32: S½ N½, S½
Township 8 South, Range 95 West, 6th P.M.
Section 18: W½
NE¼ SE¼
Resurvey Tract 38
Resurvey Tract 39
IT IS FURTHER ORDERED, that one (1) well per 10 acres shall be allowed to be drilled for production of gas and associated hydrocarbons from the Williams Fork Formation with no more than four (4) Williams Fork Formation wells downhole per government quarter quarter section, with the permitted well to be located no closer than one hundred (100) feet from the unit boundary and no closer than two hundred (200) feet from the unit boundary where 10-acre density has not been allowed, for the below-listed lands. Said wells shall be drilled from the surface either vertically or directionally from no more than one (1) pad located on a given quarter quarter section unless exception is granted by the Director of the Oil and Gas Conservation Commission.
Township 7 South, Range 94 West, 6th P.M.
Sections 17 through 20: All
Section 30: All
Township 7 South, Range 95 West, 6th P.M.
Section 32: S½ N½, S½
IT IS FURTHER ORDERED, that the order shall clarify that Order Nos. 139-45 and 139-51, which established 40-acre drilling and spacing units and 10-acre density for the Williams Fork and Iles Formations underlying Resurvey Tract 41, located in Section 18 of Township 8 South, Range 95 West of the 6th P.M., also apply to that portion of Resurvey Tract 41 which is located in Section 19, Township 8 South, Range 95 West of the 6th P.M.
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.
CORRECTED this ______ day of July, 2006, as of June 5, 2006.
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