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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. 191-44 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 9:00 a.m. on January 8, 2007, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to pool all nonconsenting interests in an approximate 186.3-acre drilling and spacing unit lying in the N½ of Section 12, Township 6 South, Range 93 West, 6th P.M., for the development and operation of the Williams Fork and Iles Formations.
FINDINGS
The Commission finds as follows:
1. Antero Resources Corporation ("Antero"), 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 October 23, 2006, the Commission issued Order No. 191-37, which among other things, established an approximate 186.3-acre drilling and spacing unit consisting of certain lands in the N½ of Section 12, Township 6 South, Range 93 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork and the Iles Formations of the Mesaverde Group.
5. On November 20, 2006, Antero, by its attorney, filed with the Commission a verified application for an order to pool all nonconsenting interests in the approximate 186.3-acre drilling and spacing unit described below, for the development and operation of the Williams Fork and Iles Formations:
Township 6 South, Range 93 West, 6th P.M.
All that part of Section 12, Township 6 South, Range 93 West, 6th P.M. lying in the N½ of said Section 12 more particularly described as follows:
Beginning at the Northwestern corner of Section 12; thence South 00°41'24'' West a distance of 2266.6 feet; thence North 66°30' East a distance of 300.70 feet; thence North 69°53' East a distance of 453.30 feet; thence North 75°31' East a distance of 551.10 feet; thence North 78°41' East a distance of 764.30 feet; thence North 78°10' East a distance of 379.80 feet; thence North 82°34' East a distance of 278.10 feet; thence North 78°01' East a distance of 1011.30 feet; thence North 77°24' East a distance of 1677.20 feet to a point on the East line of Section 12; thence North 00°52'12'' East a distance of 938.20 feet; thence North 89°11' West a distance of 5245.20 feet to the point of beginning.
Antero plans to drill the Hoffmeister A-1 Well, with the bottomhole location in the NW¼ NE¼ of Section 12, Township 6 South, Range 93 West, 6th P.M. Offers to lease or to participate have been made to the mineral owners or the leasehold owners but as of the date the application was filed, not all of these attempts have been successful.
6. On December 22, 2006, a protest was filed on behalf of Dolphin Energy Corporation, Exxel Energy Corp. and Apollo Energy, LLC alleging that Antero had misstated the interests owned between them in the drilling and spacing unit. Once their relative interests were clarified, the protest was withdrawn, confirmed by written correspondence on December 28, 2006.
7. On December 27, 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. Sworn written testimony and five (5) exhibits were submitted in support of the application.
8. Testimony and exhibits submitted in support of the application showed that Antero proposes to drill the Hoffmeister A-1 Well with a bottomhole location in the NW¼ NE¼ of Section 12, Township 6 South, Range 93 West, 6th P.M., and that Antero has over 59% of the unit leased but that there are approximately 31% of unleased nonconsenting interests located within the unit that are the subject of the pooling request.
9. Testimony and exhibits submitted in support of the application showed that offers to lease or to participate were sent to the nonconsenting owners. Additional testimony submitted showed that the offers and the Authorizations for Expenditures were fair and reasonable, and similar to those prevailing in the area. Further testimony submitted showed the offers were sent via certified mail and all were received at least thirty (30) days prior to the January 8, 2007 hearing date, as evidenced by return receipt cards.
10. The testimony and exhibits submitted indicated that Antero has complied with the requirements of Rule 530.a. and §34-60-116(7)(d), C.R.S.
11. Antero Resources Corporation agreed to be bound by oral order of the Commission.
12. Based on the facts stated in the verified application, having received no unresolved protests and based on the Hearing Officer review of the application under Rule 511.b., the Commission should enter an order pooling all nonconsenting interests in the approximate 183-acre drilling and spacing unit lying in the N½ of Section 12, Township 6 South, Range 93 West, 6th P.M., for the development and operation of the Williams Fork and Iles Formations.
ORDER
NOW, THEREFORE IT IS ORDERED, that, 1. Pursuant to the provisions of §34-60-116, C.R.S. as amended, of the Oil and Gas Conservation Act of the State of Colorado, all the nonconsenting interests in the approximately 186.3-acre drilling and spacing unit described below are hereby pooled for the development and operation of the Williams Fork and Iles Formations:
Township 6 South, Range 93 West, 6th P.M.
All that part of Section 12, Township 6 South, Range 93 West, 6th P.M. lying in the N½ of said Section 12 more particularly described as follows:
Beginning at the Northwestern corner of Section 12; thence South 00°41'24'' West a distance of 2266.6 feet; thence North 66°30' East a distance of 300.70 feet; thence North 69°53' East a distance of 453.30 feet; thence North 75°31' East a distance of 551.10 feet; thence North 78°41' East a distance of 764.30 feet; thence North 78°10' East a distance of 379.80 feet; thence North 82°34' East a distance of 278.10 feet; thence North 78°01' East a distance of 1011.30 feet; thence North 77°24' East a distance of 1677.20 feet to a point on the East line of Section 12; thence North 00°52'12'' East a distance of 938.20 feet; thence North 89°11' West a distance of 5245.20 feet to the point of beginning.
2. The production obtained from the drilling unit shall be allocated to each owner in the unit on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within each drilling unit; each owner of an interest in each drilling unit shall be entitled to receive his/her share of the production of the well located on each drilling unit applicable to his interest in each drilling unit.
3. Said owners are hereby deemed to have elected not to participate and shall therefore be deemed to be nonconsenting as to the well(s) and be subject to the penalties as provided for by §34-60-116 (7), C.R.S.
4. Any nonconsenting unleased mineral owner within the spacing unit shall be treated as the owner of the landowner's royalty to the extent of 12.5% of his/her record title interest, whatever that interest may be, until such time as the consenting owner recovers, only out of the non-consenting owner's proportionate 87.5% share of production, the costs specified in §34-60-116 (7)(b), C.R.S. as amended. After recovery of such costs, the nonconsenting mineral owner shall then own his/her proportionate 8/8ths share of the well, surface facilities and production, and then be liable for his/her proportionate share of further costs incurred in connection with the well as if he/she had originally agreed to the drilling.
5. The operator of any well drilled on the above-described unit shall furnish all nonconsenting owners with a monthly statement of all costs incurred, together with the quantity of oil and gas produced, and the amount of proceeds realized from the sale of production during the preceding month.
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 January, 2007, as of January 8, 2007.
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
January 18, 2007