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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. 139-93 |
This cause came on for hearing before the Commission at 8:30 a.m. on June 11, 2008, in the Colorado River Room, Two Rivers Convention Center, 159 Main Street, Grand Junction, Colorado, for an order to allow 10-acre density drilling to be established for the production of gas and associated hydrocarbons from the Iles Formation for the W˝ of Section 19, Township 6 South, Range 93 West, 6th P.M.
The Commission finds as follows:
1. Laramie Energy II, LLC (“Laramie or Applicant”), 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.
5. On April 21, 2008, Laramie, by its attorney, filed with the Commission a request that 10-acre density drilling be established for the production of gas and associated hydrocarbons from the Iles Formation for the W˝ of Section 19, Township 6 South, Range 93 West, 6th P.M.
6. On May 28, 2008, Laramie, 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.
7. Testimony and exhibits submitted in support of the application showed that the application lands total 321.36 acres and are fee minerals. Additional testimony showed the lands in the immediate vicinity of the application lands that have been approved for 10-acre density for production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.
8. Testimony and exhibits submitted in support of the application showed that the Piceance Basin Williams Fork Formation geologic model is well understood and accepted. Additional testimony indicated that the Corcoran sands of the Iles Formation were deposited in a similar environment as the Williams Fork Formation, and although there are few Iles Formation completions in the area, it is reasonable to believe that the Corcoran sand distribution will be similar to that of the Williams Fork Formation and that it may be gas bearing in the area. Further testimony indicated that the Rollins and Cozzette sands of the Iles Formation were deposited in a marine shoreface environment and based upon log evaluation show porosity variability from well to well. Testimony showed that petrophysical analysis indicates these two sands may be wet.
9. Testimony and exhibits submitted in support of the application showed that a nearby Williams Fork Formation completion on the application lands is draining less than 10 acres, and that stand alone Iles Formation wells that recover 110 MMCF will not be commercial. Additional testimony indicated that the most economic and efficient method to recover Iles Formation reserves is through joint development with the over-pressured Williams Fork Formation sands to help lift associated water and increase ultimate recoveries from both reservoirs.
10. Testimony and exhibits submitted in support of the application showed the Iles Formation cannot be economically developed by the drilling of stand alone wells but can be developed economically if drilled together with the Williams Fork Formation.
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. Laramie Energy II, 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 10-acre density drilling for the W˝ of Section 19, Township 6 South, Range 93 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles Formation.
ORDER
NOW, THEREFORE IT IS ORDERED, that the equivalent of 10-acre density is hereby approved for the W˝ of Section 19, Township 6 South, Range 93 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles Formation.
IT IS FURTHER ORDERED, that all future Iles Formation wells to be drilled on the application lands shall be located downhole anywhere upon such lands but no closer than 100 feet from a lease line or the boundaries of the application lands without exception being granted by the Director of the Oil and Gas Conservation Commission. 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 wells, the well shall be located downhole no closer than 200 feet from the boundary or boundaries of the application lands so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.
IT IS FURTHER ORDERED, that all wells drilled to the Iles Formation shall be drilled only in connection with the drilling of Williams Fork Formation wells, and 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__________day of June, 2008, as of June 11, 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
June 30, 2008