BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER THE PROMULGATION AND                               )     CAUSE NO. 191

ESTABLISHMENT OF FIELD RULES TO GOVERN                      )

OPERATIONS IN THE MAMM CREEK FIELD,                               )     ORDER NO. 191-10

GARFIELD COUNTY, COLORADO                                               )     SECOND CORRECTION

                                                                       

                                                               REPORT OF THE COMMISSION

 

                        This cause came on for hearing before the Commission at 9:00 a.m. on April 25, 2005 in Suite 801, 1120 Lincoln Street, Denver, Colorado for an order to establish spacing rules and to increase the number of wells which can be optionally drilled into and produced from the Iles Formation of the Mesaverde Group which constitute existing drilling units (or portions thereof) to the equivalent of one Williams Fork Formation well per 10 acres for certain lands in Townships 6 and 7 South, Ranges 91 and 92 West, 6th P.M.

 

                                                                                  FINDINGS

 

                        The Commission finds as follows:

 

                        1.  Bill Barrett Corporation (“BBC”), 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.

 

                        4.  On February 22, 1994, the Commission issued Order No. 191-4, which amended Order No. 191-3 which established 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde Formation, with the permitted well to be located no closer than 990 feet to the boundaries of the unit for the below-listed lands:

 

Township 6 South, Range 92 West, 6th P.M.

                        Sections 22 through 27:          All

                        Sections 35 and 36:                All

 

                        5.  On October 21, 1997, the Commission issued Order No. 191-5, which amended Order No. 191-4 which established 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde Formation, with the permitted well to be located no closer than 990 feet to the boundaries of the unit, to allow additional wells, not to exceed sixteen (16) wells, for the production of oil, gas and associated hydrocarbons from the Mesaverde Group, with the permitted well to be located at a distance of at least 400 feet from the outer boundaries of the drilling and spacing unit and no closer than 800 feet to any well or wells producing or producible from the same formation including Section 25, Township 6 South, Range 92 West, 6th P.M.

 

            6.  On October 21, 1997, the Commission issued Order No. 191-5, which amended Order No. 191-4 which established 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde Formation, with the permitted well to be located no closer than 990 feet to the boundaries of the unit, to decrease the 640-acre drilling and spacing unit consisting of Section 36, Township 6 South, Range 92 West, 6th P.M. to 40-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Mesaverde Group, with the permitted well to be located in accordance with Rule 318.a.

 

            7.  On December 2, 2002, the Commission issued Order No. 191-6, which rescinded Section 23, Township 6 South, Range 92 West, 6th P.M. from the provisions of Order No. 191-3, which had established a 640-acre drilling and spacing unit consisting of said Section 23, for the production of gas and associated hydrocarbons from the Mesaverde Formation.

 

8.  On April 21, 2003, the Commission issued Order No. 191-8, which amended Order Nos. 191-3 and 191-4 to remove Section 35, Township 6 South, Range 92 West, 6th P.M. from the provisions of these orders and place the lands under the Rules and Regulations of the Commission, including Rule 318 for well locations.

 

            9.  Rule 318.a. of the Rules and Regulations of the Commission requires that wells drilled in excess of two thousand five hundred (2,500) feet in depth be located not less than six hundred (600) feet from any lease line, and located not less than one thousand two hundred (1,200) feet from any other producible or drilling oil or gas well when drilling to the same common source of supply, unless authorized by order of the Commission upon hearing.  The below-listed lands are subject to Rule 318.a.:

 

Township 6 South, Range 91 West, 6th P.M.

Section 19:                     N½ N½, SW¼ NW¼, SE¼ NE¼

Section 20:                     N½

Section 21:                              NW¼ NE¼, NE¼ NW¼

Section 22:                              E½, N½ NW¼, SE¼ NW¼, NE¼ SW¼

Section 23:                              S½ NW¼, S½

Section 24:                              SE¼ NE¼, SW¼, S½ SE¼

Section 25:                              N½, N½ S½, SE¼ SW¼, SW¼ SE¼

Section 26:                              N½

Section 27:                              E½, E½ W½, SW¼ NW¼, W½ SW¼

Section 28:                              W½ NE¼, SE¼ NE¼, E½ SE¼

Section 31:                              SW¼ SW¼

Section 33:                              E½, SE¼ NW¼, SW¼

Sections 34 through 36: All

 

Township 6 South, Range 92 West, 6th P.M.

Section 13:                              S½ SW¼

Section 14:                              SE¼ SE¼

Section 16:                              SW¼ SE¼

Sections 19 through 21:          All

Section 23:                              NE¼ NE¼, NW¼ NW¼, S½ N½, S½

Sections 28 through 30:          All

Section 33:                              SW¼

Section 34:                              E½

Section 35:                              All

 

Township 7 South, Range 91 West, 6th P.M.

Section   1:                     Lots 1-4, S½ S½ (All)

Section   2:                     Lot 1, SE¼ SE¼

Section   5:                     Lot 4, S½ SW¼

Section   6:                     Lots 1, 2, 4, 5, SE¼ SW¼, SW¼ SE¼

Sections 11 and 12:       All

 

Township 7 South, Range 92 West, 6th P.M.

Section 2:                       That certain 70.233 acres in the W½ remaining uncommitted to the Hunter Mesa Unit

Section 3:                       That certain 96.93 acres in the N½ remaining uncommitted to the Hunter Mesa Unit

 

                        10.  On January 10, 2005, the Commission entered Order No. 191-8, which established various drilling and spacing units for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group and allowed the equivalent of one well per 10 acres, with the permitted well to be located downhole anywhere in the drilling and spacing unit, no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Williams Fork Formation wells, the well shall be located downhole no closer than 200 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.

 

            11.   On March 10, 2005, BBC, by its attorney, filed with the Commission a verified application for an order to increase the number of wells which can be optionally drilling into and produced from the Iles Formation in the below-listed 640-acre drilling and spacing units, or portions thereof, the equivalent of one well per 10 acres, with the permitted well to be located downhole anywhere in the drilling and spacing unit, no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well should be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.

                        Township 6 South, Range 92 West, 6th P.M.

Section 22:                              All

Section 23:                              NE¼ NE¼, NW¼ NW¼, S½ N½

                        Section 24:                              E½

                        Sections 25 through 27:          All

 

                        12.  In addition, the application also requested that the order increase the number of wells which can be optionally drilling into and produced from the Iles Formation in the below-listed 40-acre drilling and spacing units, the equivalent of one well per 10 acres, with the permitted well to be located downhole anywhere in the drilling and spacing unit, no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well should be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.

 

                        Township 6 South, Range 92 West, 6th P.M.

                        Section 36:                     All

 

            13.  The application requested that the order establish 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Iles Formation, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well should be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  In addition, the order should allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

Township 6 South, Range 91 West, 6th P.M.

Sections 34 through 36: All

 

Township 6 South, Range 92 West, 6th P.M.

Sections 20 and 21:                All

Section 35:                              All

 

Township 7 South, Range 91 West, 6th P.M.

Sections 11 and 12:                All

 

                        14.  The application also requested that the order establish 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Iles Formation, for the below-listed lands, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well should be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  In addition, the order should allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

                                        

Township 6 South Range 91 West, 6th P.M.

Section 20:                     N½

Section 23:                     S½

Section 33:                     E½

 

Township 6 South, Range 92 West, 6th P.M.

Section 23:                     S½

Section 24:                     W½

Section 28:                     N½

 

Township 7 South, Range 91 West, 6th P.M.

Section 1:                       All

 

            15.  In addition, the application also requested that the order establish 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Iles Formation, for the below-listed lands, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well should be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  The order should allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

 

Township 6 South, Range 92 West, 6th P.M.

Section 28:                     SW¼, SE¼

Section 29:                     NE¼

Section 33:                     SW¼

Section 34:                     NE¼

 

            16.  Further, the application also requested that the order establish 80-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Iles Formation, the below-listed lands, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well should be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  In addition, the order should allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

 

Township 6 South Range 92 West, 6th P.M.

Section 34:                     N½ SE¼, S½ SE¼

 

            17.  The application also requested that as to the below-listed lands [unspaced], the order should allow all future Iles Formation wells to be located downhole anywhere upon such lands but no closer than 100 feet from the boundaries of any lease line unless such lease line abuts or corners 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 in which event the wells should be drilled downhole no closer than 400 feet from the lease line which so abuts or corners the lands in respect of which 10 acre density downhole drilling for Iles Formation wells has not been ordered by the Commission.  In addition, the order should allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

 

Township 6 South, Range 91 West, 6th P.M.

Section 19:                     SW¼ NW¼, SE¼ NE¼

Section 21:                     NW¼ NE¼, NE¼ NW¼

Section 22:                     N½ NW¼, SE¼ NW¼, NE¼ SW¼

Section 23:                     S½ NW¼

Section 24:                     SE¼ NE¼, SW¼, S½ SE¼

Section 25:                     N½ S½, SE¼ SW¼, SW¼ SE¼

Section 27:                     NE¼, E½ NW¼, SW¼ NW¼

Section 28:                     W½ NE¼, SE¼ NE¼, E½ SE¼

Section 31:                     SW¼ SW¼

Section 33:                     SE¼ NW¼, SW¼

 

Township 6 South, Range 92 West, 6th P.M.

Section 13:                     S½ SW¼

Section 14:                     SE¼ SE¼

Section 16:                     SW¼ SE¼

Section 23:                    NE¼ NE¼, NW¼ NW¼, S½ N½

Section 19:                     All

Section 29:                     NW¼, S½

Section 30:                     All

 

Township 7 South, Range 91 West, 6th P.M.

Section   2:                     Lot 1, SE¼ SE¼

Section   5:                     Lot 4, S½ SW¼

Section   6:                     Lots 1, 2, 4, 5, SE¼ SW¼, SW¼ SE¼

 

Township 7 South, Range 92 West, 6th P.M.

                                 Section 2:                       That certain 70.233 acres in the W½ remaining uncommitted to the Hunter Mesa Unit

Section 3:                       That certain 96.93 acres in the N½ remaining uncommitted to the Hunter Mesa Unit

 

                        18.  Subsequent to the matter being noticed for hearing, it was discovered that several errors had been made in the Hearing Notice, although the Hearing Application was correct.  Sections 22, 25, 26, 27 and 36 of Township 6 South, Range 92 West, 6th P.M. were erroneously omitted from the hearing notice, Sections 20, 21 and 35 of Township 6 South, Range 92 West, 6th P.M. were erroneously noticed as having previously been spaced on 640-acre drilling and spacing units, and several of the setback footages were incorrectly described as 200 feet instead of 400 feet.  At the time of the administrative hearing, the Hearing Officer recommended that the testimony and exhibits presented at the administrative hearing address these sections, and that a new Hearing Notice be sent to the affected parties and published to cover only these lands.  Provided there are no protests to this new Notice, the Hearing Officer recommended that the Commission allow these lands to be included in any order the Commission enters at the conclusion of the protest date.  The footage setback described in the Hearing Notice was more stringent than the setback requested and thus no additional notice on this issue should be required.  Finally, because the Hearing Application mailed to all the parties was correct, it was not anticipated that there will be any protests to the new Notice on the eight (8) sections.  On April 29, 2005, an amended Notice of Hearing was mailed to the parties affected by the omitted and in error lands.  No protests were received to the amended Notice and the order should be amended to include the eight (8) sections described above.

 

                        19.  Testimony and exhibits presented at the administrative hearing showed the three (3) regressive marine sands, the Corcoran, Cozzette and Rollins members, which comprise the Iles Formation.  Additional testimony and exhibits showed that the Rollins average gross sand is one hundred fifty-four (154) feet, with the average net sand greater than eight percent (8%) density porosity of thirty-one (31) feet.  Further testimony showed that the Cozzette average gross sand is seventy-one (71) feet, with the average net sand greater than eight percent (8%) density porosity of twenty-eight (28) feet.   Testimony showed that the Corcoran average gross sand is one hundred six (106) feet, with the average net sand greater than eight percent (8%) density porosity of thirty-two (32) feet.

 

20.  Testimony and exhibits presented at the administrative hearing showed that two hundred seventy-three (273) wells have penetrated the Rollins, with thirty-nine (39) completions, and twelve (12) wells have penetrated the Cozzette-Corcoran, with five (5) completions.  Additional testimony showed that due to porosity distribution, the Iles Formation is not productive in a continuous manner.

                        21.  Testimony and exhibits presented at the administrative hearing showed wells completed in the Rollins and nearby wells where the porosity zone is missing at distances as close as six hundred sixteen (616) feet.  Additional testimony showed wells completed in the Cozzette-Corcoran, which although can be correlated over a distance as great as ten thousand (10,000) feet, do not contain uniform porosity, resulting in high variability of gas in sands even over short distances.

 

                        22.  Testimony and exhibits presented at the administrative hearing showed the initial potential tests for the Rollins Formation for twenty-eight (28) wells, with an average of one hundred fifty-nine (159) MCFGPD and an average of fifteen (15) BWPD.

 

                        23.  Testimony and exhibits presented at the administrative hearing showed the Rollins Formation estimated average type curve which appears to be similar to the Williams Fork Formation with respect to porosity distribution, permeability and regional stress environment.

 

                        24.  Testimony and exhibits presented at the administrative hearing showed that a stand-alone Rollins Formation completion costs approximately one million dollars ($1,000,000) while a dual completion to the Williams Fork and Rollins Formations cost an approximate one hundred fifty thousand dollars ($150,000), making it uneconomic to drill stand-alone Rollins Formation wells.  Additional testimony indicated that a dual completion Williams Fork Formation and Rollins Formation well is economic, with payout occurring in less than two (2) years.

                       

                        25.  The above-referenced testimony and exhibits show that the proposed density will allow more efficient drainage, will prevent waste, will not violate correlative rights and will assure a greater ultimate recovery of gas and associated hydrocarbons from the Iles Formation that may not be drilled without utilizing the same density and well locations as Williams Fork Formation wells.

                       

                        26.  BBC intends to drill and complete Iles Formation wells only in association with the drilling and completing of wells in the Williams Fork Formation, and commits that Mesaverde Formation wells will be drilled within a given quarter quarter section will be drilled from the surface either vertically or directionally from one pad located on that quarter quarter section.

 

                        27.  Bill Barrett Corporation agrees to be bound by oral order of the Commission.

 

                        28.  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 approve an order to establish spacing rules and to increase the number of wells which can be optionally drilled into and produced from the Iles Formation of the Mesaverde Group which constitute existing drilling units (or portions thereof) to the equivalent of one Williams Fork Formation well per 10 acres for certain lands in Townships 6 and 7 South, Ranges 91 and 92 West, 6th P.M.

 

 

 

ORDER

 

                        NOW, THEREFORE, IT IS ORDERED, that 640-acre drilling and spacing units are hereby established for the production of gas and associated hydrocarbons from the Iles Formation, for the below-listed lands, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well shall be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  In addition, the order shall allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

 

Township 6 South, Range 91 West, 6th P.M.

Sections 34 through 36: All

 

Township 6 South, Range 92 West, 6th P.M.

Sections 20 and 21:                All

Section 35:                              All

 

Township 7 South, Range 91 West, 6th P.M.

Sections 11 and 12:                All

 

IT IS FURTHER ORDERED, that 320-acre drilling and spacing units are hereby established for the production of gas and associated hydrocarbons from the Iles Formation, for the below-listed lands, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well shall be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  In addition, the order shall allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

 

Township 6 South Range 91 West, 6th P.M.

Section 20:                     N½

Section 23:                     S½

Section 33:                     E½

 

Township 6 South, Range 92 West, 6th P.M.

Section 23:                     S½

Section 24:                     W½

Section 28:                     N½

 

Township 7 South, Range 91 West, 6th P.M.

Section 1:                       All

 

IT IS FURTHER ORDERED, that 160-acre drilling and spacing units are hereby established for the production of gas and associated hydrocarbons from the Iles Formation, for the below-listed lands, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well shall be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  The order shall allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

 

Township 6 South, Range 92 West, 6th P.M.

Section 28:                     SW¼, SE¼

Section 29:                     NE¼

Section 33:                     SW¼

Section 34:                     NE¼

 

IT IS FURTHER ORDERED, that 80-acre drilling and spacing units are hereby established for the production of gas and associated hydrocarbons from the Iles Formation, the below-listed lands, with the permitted well to be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well shall be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  In addition, the order shall allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

 

Township 6 South Range 92 West, 6th P.M.

Section 34:                     N½ SE¼, S½ SE¼

 

IT IS FURTHER ORDERED, that the number of wells which can be optionally drilling into and produced from the Iles Formation in the below-listed 640-acre drilling and spacing units, or portions thereof, is hereby amended to allow the equivalent of one well per 10 acres, with the permitted well to be located downhole anywhere in the drilling and spacing unit, no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well shall be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.

                        Township 6 South, Range 92 West, 6th P.M.

Section 22:                              All

                        Section 24:                              E½

                        Sections 25 through 27:          All

                       

IT IS FURTHER ORDERED, that the number of wells which can be optionally drilling into and produced from the Iles Formation in the below-listed 40-acre drilling and spacing units, is hereby amended to allow the equivalent of one well per 10 acres, with the permitted well to be located downhole anywhere in the drilling and spacing unit, no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission.  Where these 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 Iles Formation wells, the well shall be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.

 

                        Township 6 South, Range 92 West, 6th P.M.

                        Section 36:                     All

 

IT IS FURTHER ORDERED, that the permitted downhole location for each new Iles Formation well drilled upon the application lands shall be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director.  For lands that the Commission has not at the time of the drilling permit application granted the right to drill 10 acre density, the well shall be located downhole no closer than 400 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director.

 

                        IT IS FURTHER ORDERED, that the permitted downhole location for each new Iles Formation well drilled upon application lands described below which are unspaced shall be located anywhere upon the Application Lands but no closer than 100 feet from the boundaries of any lease line unless such lease line abuts or corners lands in respect of which the Commission has not at the time of a drilling application granted the right to drill 10 acre density wells in which event the wells shall be drilled downhole no closer than 400 feet from the lease line which so abuts or corners the lands in respect of which 10 acre density downhole drilling for Iles Formation wells has not been ordered by the Commission.  In addition, the order shall allow the number of wells which can be optionally drilled into and produced from the Iles Formation to the equivalent of one well per 10 acres.

 

Township 6 South, Range 91 West, 6th P. M.

Section 19:                     SW¼ NW¼, SE¼ NE¼

Section 21:                     NW¼ NE¼, NE¼ NW¼

Section 22:                     N½ NW¼, SE¼ NW¼, NE¼ SW¼

Section 23:                     S½ NW¼

Section 24:                     SE¼ NE¼, SW¼, S½ SE¼

Section 25:                     N½ S½, SE¼ SW¼, SW¼ SE¼

Section 27:                     NE¼, E½ NW¼, SW¼ NW¼

Section 28:                     W½ NE¼, SE¼ NE¼, E½ SE¼

Section 31:                     SW¼ SW¼

Section 33:                     SE¼ NW¼, SW¼

 

Township 6 South, Range 92 West, 6th P.M.

Section 13:                     S½ SW¼

Section 14:                     SE¼ SE¼

Section 16:                     SW¼ SE¼

Section 19:                     All

Section 23:                    NE¼ NE¼, NW¼ NW¼, S½ N½

Section 29:                     NW¼, S½

Section 30:                     All

 

Township 7 South, Range 91 West, 6th P.M.

Section   2:                     Lot 1, SE¼ SE¼

Section   5:                     Lot 4, S½ SW¼

Section   6:                     Lots 1, 2, 4, 5, SE¼ SW¼, SW¼ SE¼

 

Township 7 South, Range 92 West, 6th P.M.

                                 Section 2:                       That certain 70.233 acres in the W½ remaining uncommitted to the Hunter Mesa Unit

Section 3:                       That certain 96.93 acres in the N½ remaining uncommitted to the Hunter Mesa Unit

 

                        IT IS FURTHER ORDERED, that Iles Formation wells shall be drilled and completed only in association with the drilling and completing of wells in the Williams Fork Formation, and that Mesaverde Formation wells shall be drilled within a given quarter quarter section from the surface either vertically or directionally from one pad located on that quarter quarter section.

 

                        IT IS FURTHER ORDERED, that after a new Hearing Notice is sent regarding Sections 20, 21, 22, 25, 26, 27, 35 and 36 of Township 6 South, Range 92 West, 6th P.M. to the affected parties and published, and the protest date has tolled, if no protests are received, the Order shall be amended to include these eight (8) sections, without the need for an additional hearing.

 

                        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  16th  day of May 2005, as of April 25, 2005.

 

                        CORRECTED this     29th     day of November 2007, as of May 25, 2005.

 

                        CORRECTED this                  day of November 2008, as of May 25, 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

November 5, 2008