BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE WILLIAMS FORK AND ILES FORMATIONS, MAMM CREEK FIELD, GARFIELD COUNTY, COLORADO

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CAUSE NO. 191

 

DOCKET NO. 150100064

 

ORDER NO. 191-102

REPORT OF THE COMMISSION

 

            The Commission heard this matter on March 2, 2015 at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to establish two approximate 160-acre drilling and spacing unit for Section 11, Township 6 South, Range 92 West, 6th P.M., and approve the equivalent of up to one well per 10 acres within the unit, for the production of oil, gas, and associated hydrocarbons from the Williams Fork and Iles Formations.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Ursa Operating Company LLC (Operator No. 10447) (“Ursa” or “Applicant”) 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.         Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that, on unspaced lands, wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and located not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply. Section 11, Township 6 South, Range 92 West, 6th P.M., is subject to Rule 318.a. for the Williams Fork and Iles Formations.

 

5.         On September 15, 2014, the Commission entered Order No. 191-101, which  vacated those portions of Order Nos. 191-90 and 191-100 which established drilling and spacing units for the NE¼ of said Section 11 and the S½ of Section 11, for production of gas and associated hydrocarbons from the Williams Fork and Iles Formations, and established the E½ of Section 11, Township 6  South, Range 92 West, 6th P.M. as an approximate 320-acre drilling and spacing unit for the Williams Fork and Iles Formations, and approved the equivalent of one (1) well per 10 acres well density therein.

 

 

6.         On November 17, 2014, Ursa, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to vacate Order No. 191-101 and to establish two approximate 160-acre drilling and spacing units for the below-described lands (“Application Lands”) and to approve up to the equivalent of one well per 10 acres within the unit, for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations, with the bottomhole location to be located anywhere upon the Application Lands but no closer than 100 feet from the unit boundaries, however, in cases where the 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 and Iles Formations wells, the permitted well should be located downhole no closer than 200 feet from the proposed unit boundaries, without exception being granted by the Director, with wells to be drilled from the surface either vertically or directionally from no more than one (1) pad located on a given quarter-quarter section (or lots or parcels approximately equivalent thereto), unless exception is granted by the Commission pursuant to an application made for such exception:

 

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

Section 11:      NE¼, SE¼

 

7.         On February 9, 2015, Ursa, by its attorneys, 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.

 

            8.         Land testimony and exhibits submitted in support of the Application by Jarred D. McGhee, Landman for Ursa, showed that Ursa holds oil and gas leasehold interests and has a right to drill in the Application Lands.  

 

9.         Geologic testimony submitted in support of the Application by Duke Cooley, Senior Geologist for Ursa, showed that the Williams Fork and Iles Formations are present throughout the Application Lands and have similar geologic characteristics as shown by geologic exhibits accepted by the Commission in the proceedings for Order Numbers 191-25 (Iles Formation) and 523-2 (Williams Fork Formation).  At the Applicant’s request, the Commission takes administrative notice of those geologic exhibits and Orders. The geologic testimony further showed that the requested spacing and well density is appropriate for the Application Lands.

 

10.       Engineering testimony submitted in support of the Application by Andrew Haney, VP of Development – Rockies, Petroleum Engineer for Ursa, showed that the engineering characteristics of Williams Fork and Iles Formations wells are shown by engineering exhibits accepted by the Commission in the proceedings for Order Numbers 191-25 (Iles Formation) and 523-2 (Williams Fork Formation). At the Applicant’s request the Commission takes administrative notice of those engineering exhibits and Orders. The engineering testimony further showed that the requested spacing and well density is appropriate for the Application Lands, and will prevent waste, protect correlative rights, and assure the ultimate recovery of gas and associated hydrocarbons from the reservoir.

 

11.       The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.

 

12.       Ursa agreed to be bound by oral order of the Commission.

 

12.       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, the Commission should enter an order to vacate Order 191-101 and establish two approximate 160-acre drilling and spacing units for Section 11, Township 6 South, Range 92 West, 6th P.M., and approve up to the equivalent of one well per 10 acres within the unit, for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations, with the bottomhole location to be located anywhere upon the Application Lands but no closer than 100 feet from the unit boundaries, however, in cases where the 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 and Iles Formations wells, the permitted well should be located downhole no closer than 200 feet from the proposed unit boundaries, without exception being granted by the Director, with wells to be drilled from the surface either vertically or directionally from no more than one (1) pad located on a given quarter-quarter section (or lots or parcels approximately equivalent thereto), unless exception is granted by the Commission pursuant to an application made for such exception.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         Order No. 191-101 is hereby vacated.

 

2.         Two approximate 160-acre drilling and spacing units for the below-described lands, are hereby established, and the equivalent of one well per 10 acres within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations:

 

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

Section 11:      NE¼, SE¼

 

2.         The bottomhole location may be located anywhere upon the unit but no closer than 100 feet from the unit boundaries, however, in cases where the 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 and Iles Formations wells, the permitted well shall be located downhole no closer than 200 feet from the proposed unit boundaries, without exception being granted by the Director.

 

3.         The wells 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 Commission pursuant to an application made for such exception.

 

IT IS FURTHER ORDERED:

 

1.         The provisions contained in the above order shall become effective immediately.

 

2.         The Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

 

3.         Under the State Administrative Procedure Act, the Commission considers this Order to be final agency action for purposes of judicial review within 35 days after the date this Order is mailed by the Commission.

 

4.         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 March, 2015, as of March 2, 2015.       

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By__________________________________

Jill Dorancy, Acting Secretary