BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION                 )           CAUSE NO. 139

AND ESTABLISHMENT OF FIELD RULES TO             )          

GOVERN OPERATIONS IN THE RULISON                  )           ORDER NO. 139-85

FIELD, GARFIELD COUNTY, COLORADO                   )           CORRECTED         

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission at 9:00 a.m. on March 31, 2008, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to allow the equivalent of one well per 10 acres for certain lands in Township 7 South, Range 94 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation.

 

FINDINGS

 

                        The Commission finds as follows:

 

1.  Williams Production RMT Company (“Williams”), 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 2,500 feet in depth be located not less than 600 feet from any lease line, and located not less than 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 application lands are subject to this Rule.

 

5.  On January 4, 2008, Williams, by its attorney, filed with the Commission a verified application for an order to allow the equivalent of one well per 10 acres for the below-listed lands, for the production of gas and associated hydrocarbons from the Williams Fork Formation.

 

Township 7 South, Range 94 West, 6th P.M.

Section 13:    S½ NW¼, SW¼

Section 14:    All

Section 15:    All

Section 22:    Tracts A, B, C, D, E, F, G and H

Section 23:    N½ SE¼, N½ S½ SE¼, NE¼

Section 24:    N½ NW¼, SE¼ NW¼, N½ SW¼ NW¼, N½ NE¼ SW¼,

 

Part of Drake No. 3

Part of Drake No. 4

Part of Drake No. 5

Part of Alberta No. 1

Part of Alberta No. 2

Part of Alberta No. 3

Part of Alberta No. 4

Part of Alberta No. 5

Part of P. C. Junior No. 1

Part of P. C. Junior No. 2

Part of P. C. Junior No. 3

Part of Virginia No. 1

Alice

Alice No. 1

Alice No. 2

Alice No. 3

Little Maud No. 1

Little Maud No. 3

Little Maud No. 5

Little Maud No. 7

Little Maud No. 9

Little Maud No. 11

Little Maud No. 13

and Little Maud No. 15

 

Oil Shale Placer mining claims designated as Survey No. 20096, embracing a portion of Sections 24 and 25 and the Unsurveyed portion of Township 7 South, Range 94 West, 6th P.M., as described in United States Patent Recorded December 17, 1932 in Book 164 at Page 486.

That all future Williams Fork Formation wells drilled on the application lands should be located downhole anywhere upon such lands no closer than 100 feet from the outside boundary of the application lands unless such unit abuts or corners lands in respect of which the Commission has not at the time of the drilling permit application granted the right to drill 10-acre density downhole drilling for the Williams Fork Formation, in which event the Williams Fork Formation wells to be drilled upon the application lands should be drilled downhole no closer than 200 feet from the portion of the boundary which so abuts or corners the lands in respect of which 10-acre density downhole drilling for the Williams Fork Formation wells has not been ordered by the Commission.

 

That all Williams Fork Formation wells drilled upon the application lands will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Director of the Colorado Oil and Gas Conservation Commission.

 

                        6.  On February 8, 2008, under Rule 509., George R. Bauer and Deanna J. Bauer (the “Bauers”) filed a joint Protest to the application.  On February 18, 2008, Williams and the Bauers agreed to continue the protest matter until the March 31, 2008 Commission hearing.  On February 29, 2008, Williams, by its attorney, filed its Motion to Dismiss the Bauers Protest.  On March 4, 2008, a prehearing conference was convened wherein the Bauers were given until March 5, 2008 to file their written reply to the pending motion.  On March 5, 2008, the Bauers filed a withdrawal of their protest.

 

                        7.  On February 14, 2008, Williams, 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.  Sworn written testimony and exhibits were submitted in support of the application.

 

8.  Testimony and exhibits submitted in support of the application indicated that the application lands contain approximately 4,670 total acres, consisting of approximately 3,070 acres of fee lands and 1,600 acres of federal lands. 

 

9.  Testimony and exhibits submitted in support of the application indicated that the geologic model of the Williams Fork Formation in the major producing areas of the Piceance Basin is well understood and consists of extensive log, completion and reservoir engineering data from wells inside current 10-acre density areas and the extremely useful and representative nearby outcrops of producing rocks.  Additional testimony and exhibits indicated that based upon outcrop studies, the majority of the discontinuous sand bodies within the Williams Fork Formation are smaller than the distance between wells drilled on a 10-acre density basis.  Further testimony indicated that 10-acre density drilling is necessary to develop the Williams Fork Formation underlying the application lands.

 

10.  Testimony and exhibits submitted in support of the application indicated that gas-in-place calculations showed that 10-acre density drilling is necessary to maximize production of the resource.  Additional testimony indicated that more depletion was observed when wells are on exact fracture orientation with older parent wells.  Further testimony indicated that even with some pressure reduction, 10-acre density wells will produce substantial incremental reserves. 

 

11.  The above-referenced testimony and exhibits show that the proposed increased well density will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.

 

12.  Williams Production RMT Company agreed to be bound by oral order of the Commission.

 

13.  Based on the facts stated in the verified application, having received one protest that was subsequently withdrawn, and based on the Hearing Officer review of the application under Rule 511.b., the Commission should enter an order to allow the equivalent of one well per 10 acres for certain lands in Township 7 South, Range 94 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that the equivalent of one well per ten (10) acres is hereby approved to be drilled on the below-listed lands, for the production of gas and associated hydrocarbons from the Williams Fork Formation.

 

Township 7 South, Range 94 West, 6th P.M.

Section 13:    S½ NW¼, SW¼

Section 14:    All

Section 15:    All

Section 22:    Tracts A, B, C, D, E, F, G and H

Section 23:    N½ SE¼, N½ S½ SE¼, NE¼

Section 24:    N½ NW¼, SE¼ NW¼, N½ SW¼ NW¼, N½ NE¼ SW¼,

 

Part of Drake No. 3

Part of Drake No. 4

Part of Drake No. 5

Part of Alberta No. 1

Part of Alberta No. 2

Part of Alberta No. 3

Part of Alberta No. 4

Part of Alberta No. 5

Part of P. C. Junior No. 1

Part of P. C. Junior No. 2

Part of P. C. Junior No. 3

Part of Virginia No. 1

Alice

Alice No. 1

Alice No. 2

Alice No. 3

Little Maud No. 1

Little Maud No. 3

Little Maud No. 5

Little Maud No. 7

Little Maud No. 9

Little Maud No. 11

Little Maud No. 13

and Little Maud No. 15

 

Oil Shale Placer mining claims designated as Survey No. 20096, embracing a portion of Sections 24 and 25 and the Unsurveyed portion of Township 7 South, Range 94 West, 6th P.M., as described in United States Patent Recorded December 17, 1932 in Book 164 at Page 486.

 

IT IS FURTHER ORDERED, that all future Williams Fork Formation wells drilled on the application lands shall be located downhole anywhere upon such lands no closer than 100 feet from the outside boundary of the application lands unless such unit abuts or corners lands in respect of which the Commission has not at the time of the drilling permit application granted the right to drill 10-acre density downhole drilling for the Williams Fork Formation, in which event the Williams Fork Formation wells to be drilled upon the application lands shall be drilled downhole no closer than 200 feet from the portion of the boundary which so abuts or corners the lands in respect of which 10-acre density downhole drilling for the Williams Fork Formation wells has not been ordered by the Commission.

 

IT IS FURTHER ORDERED, that all Williams Fork Formation wells drilled upon the application lands shall be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Director of the Colorado Oil and Gas Conservation Commission.

 

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 8th day of April, 2008, as of March 31, 2008.

 

                        CORRECTED this _________ day of June, 2009, as of March 31, 2008.

           

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________         

                                                                                    Robert A. Willis, Acting Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

June 24, 2009