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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 RULISON FIELD, GARFIELD COUNTY, COLORADO
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CAUSE NO. 139
ORDER NO. 139-90 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 9:00 a.m. on May 8, 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, with the permitted well to be located no closer than 100 feet from the lease line for certain lands in Townships 7 and 8 South, Ranges 93 and 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. Black Diamond Minerals, LLC. (“Black Diamond”), 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. Sections 30 and 31, Township 7 South, Range 93 West, 6th P. M., Sections 25 and 36, Township 7 South, Range 94 West, 6th P.M., and Sections 5 through 8, Township 8 South, Range 93 West, 6th P. M. are subject to this Rule for the Williams Fork Formation.
5. On February 11, 2008, Black Diamond, by its attorneys, filed with the Commission a verified application to allow the equivalent of one (1) well per 10 acres to be drilled in the below-listed lands, for production from the Williams Fork Formation:
Parcel A:
Mt. Mamm No. 1
Mt. Mamm No. 2
Mt. Mamm No. 3
Mt. Mamm No. 4
Mt. Mamm No. 5
Mt. Mamm No. 6
Mt. Mamm No. 8
Mt. Mamm No. 9
As described in United States Patent No. 1051431 recorded December 16, 1931 in Book 168 at Page 254 as Reception No. 111666 of the Garfield County Records.
Parcel B:
Mt. Mamm No. 10
Mt. Mamm No. 11
As described in United States Patent No. 1051425 recorded December 16, 1931 in Book 168 at Page 255 as Reception No. 111667 of the Garfield County Records.
Parcel C:
Mt. Mamm No. 12
Mt. Mamm No. 13
Mt. Mamm No. 14
Mt. Mamm No. 15
As described in United States Patent No. 1119490 recorded May 21, 1945 in Book 209 at Page 447 as Reception No. 154101 of the Garfield County Records.
NOTE: Parcel A above is now known as:
Tract 42 in Sections 5, 6, 7 and 8, Township 8 South, Range 93 West of the Sixth Principal Meridian, Garfield County, Colorado, and Tract 65 in Section 30 and 31, Township 7 South, Range 93 West of the Sixth Principal Meridian, Garfield County, Colorado, according to the re-survey thereof.
6. On March 13, 2008, Black Diamond, by its attorney, filed with the Commission a written request to continue this matter to the May hearing, and the hearing in this matter was continued. On March 18 and 27, 2008, Black Diamond, LLC, by its attorney, filed amendments to the application to specify that due to the lack of 40-acre locations as a result of the topography of the application lands, and except as previously authorized by order of the Commission, wells to be drilled under this application will be drilled from the surface either vertically or directionally from the equivalent of no more than eight well pads per 640-acre section or a proportionate equivalent for any partial sections covered by the application lands, unless exception is granted by the Commission pursuant to application made for such exception.
7. On April 24, 2008, Black Diamond, 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 showed that Black Diamond is the fee owner of the application lands, and that the application lands are surrounded by lands for which 10-acre density for production from the Williams Fork Formation has been previously approved.
9. Testimony and exhibits submitted in support of the application showed that the Williams Fork Formation extends from the base of the Rollins Sandstone to the top of the Mesaverde and contains non-marine sandstones and shale, and that the productive, fluvial, channel sandstones of the Williams Fork Formation are fine-grained, laterally discontinuous, naturally fractured, with microdarcy permeability and average porosity of 6 to 10%. Additional testimony indicated that based on outcrop studies, the Williams Fork Formation contains discontinuous sandstone bodies that constitute separate reservoirs and require 10-acre density to properly access and drain each reservoir.
10. Testimony and exhibits submitted in support of the application showed that based on gas-in-place calculations, a typical Williams Fork Formation well will drain approximately 7.7 acres, and that the estimated ultimate recovery for a typical well in the application lands is approximately 1.1 BCFG.
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. Black Diamond Minerals, LLC. agreed to be bound by oral order of the Commission.
13. 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.b., the Commission should enter an order to allow the equivalent of one well per 10 acres, with the permitted well to be located no closer than 100 feet from the lease line for certain lands in Townships 7 and 8 South, Ranges 93 and 94 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation.
NOW, THEREFORE IT IS ORDERED, that the equivalent of one (1) well per 10 acres is hereby allowed to be drilled in the below-listed lands, for production from the Williams Fork Formation:
Parcel A:
Mt. Mamm No. 1
Mt. Mamm No. 2
Mt. Mamm No. 3
Mt. Mamm No. 4
Mt. Mamm No. 5
Mt. Mamm No. 6
Mt. Mamm No. 8
Mt. Mamm No. 9
As described in United States Patent No. 1051431 recorded December 16, 1931 in Book 168 at Page 254 as Reception No. 111666 of the Garfield County Records.
Parcel B:
Mt. Mamm No. 10
Mt. Mamm No. 11
As described in United States Patent No. 1051425 recorded December 16, 1931 in Book 168 at Page 255 as Reception No. 111667 of the Garfield County Records.
Parcel C:
Mt. Mamm No. 12
Mt. Mamm No. 13
Mt. Mamm No. 14
Mt. Mamm No. 15
As described in United States Patent No. 1119490 recorded May 21, 1945 in Book 209 at Page 447 as Reception No. 154101 of the Garfield County Records.
NOTE: Parcel A above is now known as:
Tract 42 in Sections 5, 6, 7 and 8, Township 8 South, Range 93 West of the Sixth Principal Meridian, Garfield County, Colorado, and Tract 65 in Sections 30 and 31, Township 7 South, Range 93 West of the Sixth Principal Meridian, Garfield County, Colorado, according to the re-survey thereof.
IT IS FURTHER ORDERED, that wells shall be located downhole no closer than 100 feet from the outside boundary of the application lands unless such boundary 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 Williams Fork Formation wells 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 that portion of the boundary which so abuts or corners the lands in respect of which 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission.
IT IS FURTHER ORDERED, that except as previously authorized by order of the Commission, wells to be drilled under this application shall be drilled from the surface either vertically or directionally from the equivalent of 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 Commission pursuant to application made for such exception.
IT IS FURTHER ORDERED, except as previously authorized by order of the Commission, wells to be drilled under this application shall be drilled from the surface either vertically or directionally from the equivalent of no more than eight well pads per 640 acre section, or a proportionate equivalent for any partial sections covered by the application lands, unless exception is granted by the Commission pursuant to application made for such exception.
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 May, 2008, as of May 8, 2008.
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
May 23, 2008