BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND ) CAUSE NO. 166
ESTABLISHMENT OF FIELD RULES TO GOVERN )
OPERATIONS IN THE PLATEAU FIELD, ) ORDER NO. 166-20
MESA COUNTY, COLORADO )
CORRECTED
This cause came on for hearing before the Commission at 9:00 a.m. on February 14, 2005, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado for an order to allow three (3) additional wells to be drilled within certain 160-acre drilling and spacing units for the production of gas from the Mesaverde Formation (defined to include the Corcoran Sandstone as its basal member), for a total of four (4) wells, with the permitted well to be located no closer than 600 feet from the boundaries of the drilling unit upon which it is located.
FINDINGS
The Commission finds as follows:
1. On April 20, 1981, the Commission issued Order No. 166-15, which amended Order No. 166-11, which, among other things, established 160-acre drilling and spacing units for the production of gas from the Mesaverde Formation (defined to include the Corcoran Sandstone as its basal member), to cover additional lands including those described below, with the permitted well to be located no closer than 600 feet from the boundaries of the drilling unit:
Township 9 South, Range 94 West, 6th P.M.
Section 31: S½
Section 32: All
Section 33: SW¼
Township 9 South, Range 95 West, 6th P.M.
Section 36: All
Township 10 South, Range 94 West, 6th P.M.
Section 5: W½
Section 6: All
Section 7: NE¼, SW¼
Section 8: All
Section 16: W½
Section 17: NE¼, SW¼
Section 18: W½, NE¼
Section 19: N½
Section 21: SE¼
Township 10 South, Range 95 West, 6th P.M.
Section 1: E½
Section 24: SE¼
2. On November 23, 2004, Laramie Energy, LLC, by its attorney, filed with the Commission a verified application for an order to allow three (3) additional wells to be drilled within the below-described 160-acre drilling and spacing units for the production of gas from the Mesaverde Formation (defined to include the Corcoran Sandstone as its basal member), for a total of four (4) wells, with the permitted well to be located no closer than 600 feet from the boundaries of the drilling unit upon which it is located.
Township 9 South, Range 94 West, 6th P.M.
Section 31: S½
Section 32: S½
Township 9 South, Range 95 West, 6th P.M.
Section 36: E½, SW¼
Township 10 South, Range 94 West, 6th P.M.
Section 5: W½
Section 6: All
Section 7: NE¼, SW¼
Section 8: All
Section 16: SW¼
Section 17: NE¼
Section 18: W½, NE¼
Township 10 South, Range 95 West, 6th P.M.
Section 1: NE¼
3. Testimony and exhibits presented at the administrative hearing showed Laramie’s leasehold in the application area and indicated that Laramie owns 100% of the leasehold interest in the application area except for a small portion of Sections 5 and 8.
4. Testimony and exhibits presented at the administrative hearing showed Laramie’s plans for additional wells, and that for the initial program, Laramie plans to drill up to an additional eight (8) wells from up to seven (7) well pads.
5. Testimony and exhibits presented at the administrative hearing indicated that the original field well was drilled in 1958 and eight (8) additional wells were drilled in 1980. Additional testimony showed that the application area currently has thirteen (13) wells drilled to the Mesaverde Formation.
6. Testimony and exhibits presented at the administrative hearing showed isopach maps of the Corcoran, Cozzette, and Williams Fork Formations, indicating that the Williams Fork Formation has the most pay interval with a thickness of 1000 feet and a net pay of 100 feet.
7. Testimony and exhibits presented at the administrative hearing showed that the Mesaverde Formation wells in the area recover .3 to 1.2 BCF per well. Additional testimony indicated that recovery factors for the existing wells vary from 4% to 23% of original gas in place. Further testimony showed that the wells in the application area could produce 1.3 to 1.5 BCF per well by perforating additional pay and using newer completion techniques.
8. Testimony and exhibits presented at the administrative hearing showed additional well density of four (4) wells per 160 acres would recover approximately 50% of the original gas in place. Additional testimony indicated that drainage areas for the Rollins, Cozzette, and Corcoran Formations are estimated to be 20 to 40 acres per well using an estimated ultimate recovery of 1.3 to 1.5 BCF per well. Further testimony showed that four (4) wells per 160-acre drilling and spacing unit will be required to effectively drain each spacing unit. Testimony and exhibits presented showed that additional drilling is economic, 160-acre drilling and spacing units are not smaller than the area that can be drained by four (4) wells, that gas will be left in place unless additional wells are approved for the Plateau Creek Field, and that correlative rights will be protected with additional drilling.
9. Laramie Energy, LLC, agreed to be bound by oral order of the Commission.
10. Based on the facts stated in the verified application, having received no protests to the application and having been heard by the Hearing Officer who recommended approval, the Commission should enter an order to increase the number of wells allowed to a total of four (4) wells per 160-acre drilling and spacing unit for the lands described above in Finding No. 2, for the production of gas and associated hydrocarbons from the Mesaverde Formation.
NOW, THEREFORE IT IS ORDERED, that three (3) additional wells are hereby allowed to be drilled within the below-described 160-acre drilling and spacing units for the production of gas from the Mesaverde Formation (defined to include the Corcoran Sandstone as its basal member), for a total of four (4) wells, with the permitted well to be located no closer than 600 feet from the boundaries of the drilling unit upon which it is located:
Township 9 South, Range 94 West, 6th P.M.
Section 31: S½
Section 32: S½
Township 9 South, Range 95 West, 6th P.M.
Section 36: E½, SW¼
Township 10 South, Range 94 West, 6th P.M.
Section 5: W½
Section 6: All
Section 7: NE¼, SW¼
Section 8: All
Section 16: SW¼
Section 17: NE¼
Section 18: W½, NE¼
Township 10 South, Range 95 West, 6th P.M.
Section 1: NE¼
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 25th day of February, 2005, as of February 14, 2005.
CORRECTED this day of July, as of February 14, 2005.
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
July 27, 2005