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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 PLATEAU FIELD, MESA COUNTY, COLORADO |
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CAUSE NO. 166
ORDER NO. 166-22 SECOND CORRECTED |
This cause came on for hearing before the Commission at 9:00 a.m. on December 6, 2005, Suite 801, in The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to allow three (3) additional wells to be optionally drilled in certain 160-acre drilling and spacing unit, for a total of four (4) wells, for the production of gas from the Mesaverde Formation (including the Corcoran Sandstone as its basal member), with the permitted well to be located no closer than 600 feet from any lease line or 1200 feet from any producible well for certain lands in Townships 9 and 10 South, Range 94 West, 6th P.M.
The Commission finds as follows:
1. Laramie Energy, LLC (“Laramie”), 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. 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.
Sections 31 and 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.
Sections 5 through 8: All
Sections 16 through 21: All
Township 10 South, Range 95 West, 6th P.M.
Section 1: All
Section 24: All
5. On May 21, 1984, the Commission entered Order No. 166-19, which among other things, deleted Sections 31 and 32, Township 9 South, Range 94 West, 6th P.M. from the spaced area of the Plateau Field and exempted these lands from Rule 318. only insofar as it pertains to the Cameo Coal Section of the Mesaverde Formation.
6. On February 14, 2005, the Commission entered Order No. 166-20, which allowed three (3) additional wells to be optionally 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 for the below-described lands:
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
7. On October 26, 2005, amended on November 4 and 24, 2005, Laramie, by its attorney, filed with the Commission a verified application for an order to allow three (3) additional wells to be optionally drilled in each 160-acre drilling and spacing unit, for a total of four (4) wells, for the production of gas from the Mesaverde Formation (including the Corcoran Sandstone as its basal member), with the permitted well to be located no closer than 600 feet from the boundaries of the drilling and spacing unit for the below-described lands:
Township 9 South, Range 94 West, 6th P.M.
Section 31: NW¼
Section 32: NW¼
Township 10 South, Range 94 West, 6th P.M.
Section 16: NW¼, SE¼
Section 17: SW¼
Section 19: NW¼
Section 20: SW¼
8. Testimony and exhibits presented at the administrative hearing indicated that all lands in the application area are leased by Laramie or EnCana Oil and Gas.
9. Testimony and exhibits presented at the administrative hearing described the geological deposition of the Mesaverde Formation in the application lands.
10. Testimony and exhibits presented at the administrative hearing showed the original gas in place for the Plateau Field averages 46.3 BCF per section.
11. Testimony and exhibits presented at the administrative hearing showed the original gas in place for the formations included in the application lands averages 11 BCF per quarter-section.
12. Testimony and exhibits presented at the administrative hearing showed that the average drainage radius is 13 acres for all wells and 17 acres for new wells in the Plateau Field. Additional testimony showed that with a well density of one well per 160 acres the gas recovery factor will average 7% for all wells and will average 8% for new wells. Additional testimony indicated that with a well density of four (4) wells per 160 acres, the average gas recovery for all wells is projected to average 28%, and that the average gas recovery for new wells is projected to average 32%.
13. Testimony and exhibits presented at the administrative hearing showed that the average gas recovery for wells in the application lands would be 8% for a well density of one well per 160 acres, and that the average gas recovery would be 32% for a well density of four (4) wells per 160 acres.
14. Testimony and exhibits presented at the administrative hearing showed that the economics of the application are viable.
15. Testimony and exhibits presented at the administrative hearing showed that additional reserves will be recovered, that waste will be prevented and that correlative rights will be protected if the application is approved.
16. Laramie Energy, LLC agreed to be bound by oral order of the Commission.
17. Based on the facts stated in the verified application, having received no protests and having been heard by the Hearing Officer who recommended approval, the Commission should enter an order to allow three (3) additional wells to be optionally drilled in each 160-acre drilling and spacing unit, for a total of four (4) wells, for the production of gas from the Mesaverde Formation (including the Corcoran Sandstone as its basal member), with the permitted well to be located no closer than 600 feet from the boundaries of the drilling and spacing unit for certain lands in Townships 9 and 10 South, Ranges 94 and 95 West, 6th P.M.
ORDER
NOW, THEREFORE, IT IS ORDERED, that three (3) additional wells are hereby approved to be optionally drilled in each 160-acre drilling and spacing unit, for a total of four (4) wells, for the production of gas from the Mesaverde Formation (including the Corcoran Sandstone as its basal member), with the permitted well to be located no closer than 600 feet from the boundaries of the drilling and spacing unit for the below-described lands:
Township 9 South, Range 94 West, 6th P.M.
Section 31: NW¼
Section 32: NW¼
Township 10 South, Range 94 West, 6th P.M.
Section 16: NW¼, SE¼
Section 17: SW¼
Section 19: NW¼
Section 20: SW¼
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.
FIRST CORRECTED this 28th day of February, 2006 as of December 6, 2005.
OF THE STATE OF COLORADO
By
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
December 23, 2008