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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. 166-27 |
This cause came on for hearing before the Commission at 8:00 a.m. on July 15, 2008, in Ballroom B of the Brown Palace Hotel, 321 Seventeenth Street, Denver, Colorado, for an order to vacate 160-acre drilling and spacing units and establish 40-acre drilling and spacing units and to allow one well per 10 acres, with the permitted well to be located no closer than 200 feet to the unit or lease line boundary for certain lands in Townships 9 and 10 South, Range 95 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation.
FINDINGS
The Commission finds as follows:
1. Plateau Energy Partners, LLC., (“Plateau Energy”), 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, to among other things, establish 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 Sections 1, 2, 11 and 12, Township 10 South, Range 95 West, 6th P.M., with the permitted well to be located no closer than 600 feet from the boundaries of the drilling unit.
5. On June 5, 2006, the Commission issued Order No. 166-23, which among other things, allowed the equivalent of one well per 10 acres to be optionally drilled in each 160-acre drilling and spacing unit, for the production of gas from the Mesaverde Formation, with the permitted well to be located no closer than one hundred (100) feet from the boundary of the unit or lease line (if unspaced), without exception granted by the Director for certain lands including the SE¼ of Section 35, Township 9 South, Range 95 West, and the N½, SW¼, N½ SE¼, W½ SW¼ SE¼ of Section 1, Township 10 South, Ranges 95 West, 6th P.M.
6. On April 21, 2008, Plateau Energy, by its attorney, filed with the Commission a verified application to vacate the 160-acre drilling and spacing units established in Order No. 166-23 and establish 40-acre drilling and spacing units for the below-listed lands, and to allow one well per 10 acres, for production from the Williams Fork Formation:
Township 9 South, Range 95 West, 6th P.M.
Section 35: SE¼
Township 10 South, Range 95 West, 6th P.M.
Section 1: W½, SW¼ SE¼
Section 2: E½ E½, NW¼ NE¼, SW¼ SE¼
Section 11: E½ E½, SW¼ NE¼
Section 12: NW¼, E½ SW¼, SE¼, W½ NE¼
The permitted well shall be located no closer than 100 feet from the boundaries of the drilling and spacing unit when the application lands corner or abut lands approved for 10-acre density and 200 feet from any unit or lease line where the Commission has not yet approved 10-acre density, absent an exception from the Commission. Plateau Energy commits that wells to be drilled under this application will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section unless exception is granted by the Director of the Commission.
7. On May 27, 2008, Plateau Energy, by its attorney, filed with the Commission a written request to continue this matter to the July hearing, and the hearing in this matter was continued.
8. On July 2, 2008, Plateau Energy, 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.
9. Testimony and exhibits submitted in support of the application showed that Plateau Energy is the majority leaseholder for the Williams Fork Formation in the application lands.
10. Testimony and exhibits submitted in support of the application showed that the Mesaverde Formation is composed of the Williams Fork Formation and the Iles Formation, which is further composed of the Rollins, Cozzette, and Corcoran Formations. Additional testimony showed that the net sand of the Mesaverde Formation is lenticular and discontinuous in nature and that it is necessary for operators to have the ability to drill wells on a 10-acre density in order to fully develop and produce the gas from the Mesaverde Formation.
11. Testimony and exhibits submitted in support of the application showed that the Williams Fork Formation is a tight gas producing formation with permeability of less than 0.1 millidarcy. Additional testimony showed that 10-acre well density for the application lands will yield an estimated recovery of 80% of original gas-in-place from the Williams Fork Formation. Further testimony showed that 10-acre well density on the application lands will prevent waste and have no adverse affect on correlative rights.
12. The above-referenced testimony and exhibits show that the proposed spacing and 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.
13. Plateau Energy Partners, LLC., agreed to be bound by oral order of the Commission.
14. 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 vacate 160-acre drilling and spacing units and establish 40-acre drilling and spacing units and to allow one well per 10 acres, with the permitted well to be located no closer than 200 feet to the unit or lease line boundary for certain lands in Townships 9 and 10 South, Range 95 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 160-acre drilling and spacing units established in Order No. 166-23 are hereby vacated and 40-acre drilling and spacing units are hereby established for the below-listed lands, allowing the equivalent of one well per 10 acres, for production from the Williams Fork Formation:
Township 9 South, Range 95 West, 6th P.M.
Section 35: SE¼
Township 10 South, Range 95 West, 6th P.M.
Section 1: W½, SW¼ SE¼
Section 2: E½ E½, NW¼ NE¼, SW¼ SE¼
Section 11: E½ E½, SW¼ NE¼
Section 12: NW¼, E½ SW¼, SE¼, W½ NE¼
IT IS FURTHER ORDERED, that the permitted well shall be located no closer than 100 feet from the boundaries of the drilling and spacing unit when the application lands corner or abut lands approved for 10-acre density and 200 feet from any unit or lease line where the Commission has not yet approved 10-acre density, absent an exception from the Commission.
IT IS FURTHER ORDERED, that wells be drilled under this application shall be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section unless exception is granted by the Director of the 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 July, 2008, as of July 15, 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
July 21, 2008