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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 MAMM CREEK FIELD, GARFIELD COUNTY, COLORADO |
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CAUSE NO. 191
ORDER NO. 191-27 |
This cause came on for hearing before the Commission at 10:00 a.m. on June 5, 2006, in the Council Chamber Room of the Ambulance Building, 304 West 3rd Street, Wray, Colorado, to establish a 160-acre drilling and spacing unit consisting of the SW¼ and two (2) 40-acre drilling and spacing units consisting of the NW¼ SE¼ and the SE¼ SE¼, all in Section 16, Township 6 South, Range 92 West, 6th P.M. for the production of gas from the Williams Fork Formation of the Mesaverde Group, and to allow the equivalent of one well per 10 acres to be drilled on said units, with the permitted well to be located no closer than 100 feet from the boundaries of the unit.
The Commission finds as follows:
1. Antero Resources Corporation (“Antero Resources”), 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. 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 this rule:
Township 6 South, Range 92 West, 6th P.M.
Section 14: W½ SE¼, NE¼ SE¼, SW¼,
Section 15: S½
Section 16: E½ SE¼, NW¼ SE¼, SW¼,
Section 17: All
5. On January 10, 2005, the Commission issued Order No. 191-8, which among other things, allowed wells to be drilled in the SW¼ SE¼ of Section 16, Township 6 South, Range 92 West, 6th P.M., the equivalent of one well per 10-acres for the production of gas from the Williams Fork Formation, with the well 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 200 feet from the lease line which so abuts or corners the lands in respect of which 10 acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission. In addition, the order allowed the number of wells which can be optionally drilled into and produced from the Williams Fork Formation the equivalent of one well per 10 acres.
6. On April 17, 2006, Antero Resources Corporation, by its attorney, filed with the Commission a verified application for an order to establish a 160-acre drilling and spacing unit consisting of the SW¼ and two (2) 40-acre drilling and spacing units consisting of the NW¼ SE¼ and the SE¼ SE¼, all in Section 16, Township 6 South, Range 92 West, 6th P.M. for the production of gas from the Williams Fork Formation of the Mesaverde Group, and to allow the equivalent of one well per 10 acres to be drilled on said units. For all future Williams Fork Formation wells to be drilled on these lands, the well should be located downhole no closer than 100 feet from the boundaries of the unit unless such unit abuts or corners lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill Williams Fork Formation 10-acre density wells, in which event the wells should be drilled downhole no closer than 200 feet from the unit which so abuts or corners the lands in respect of which 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission. In addition, wells drilled on the application lands 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 Colorado Oil and Gas Conservation Commission.
7. On May 25, 2006, Antero, 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. In addition, testimony and exhibits were presented to the Hearing Officers during the April 13, 2006 administrative hearing on nearby and adjacent lands to these application lands.
8. Testimony and exhibits presented at the administrative hearing showed that a portion of the application land is located in the town of Silt and that Antero has reached a surface use agreement with the surface developer of this land.
9. Testimony and exhibits presented at the administrative hearing showed depositional discontinuities in the sands of the Williams Fork Formation, and that the average sand width for the Williams Fork Formation is approximately four hundred (400) feet.
10. Testimony and exhibits presented at the administrative hearing showed that increased well density has increased gas production and would increase the ultimate gas recovery from the Williams Fork Formation in the Mamm Creek Field 10-acre development area located nearby in Section 32, Township 6 South, Range 92 West, 6th P.M.
11. Testimony and exhibits presented at the administrative hearing showed that increasing well density from twenty (20) to ten (10) acres has increased estimated ultimate recovery by 9.09 BCF within the development area located nearby in Section 32, Township 6 South, Range 92 West, 6th P.M.
12. Testimony and exhibits presented at the administrative hearing showed that the proposed wells within the application area would have an undiscounted payout in 4.14 years assuming production characteristics similar to the wells analyzed in Section 32, Township 6 South, Range 92 West, 6th P.M.
13. The above-referenced testimony and exhibits show that the proposed spacing and density will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.
14. Antero Resources Corporation agreed to be bound by oral order of the Commission.
15. 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 establish a 160-acre drilling and spacing unit consisting of the SW¼ and two (2) 40-acre drilling and spacing units consisting of the NW¼ SE¼ and the SE¼ SE¼, all in Section 16, Township 6 South, Range 92 West, 6th P.M. for the production of gas from the Williams Fork Formation of the Mesaverde Group, and to allow the equivalent of one well per 10 acres to be drilled on said units.
ORDER
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.
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