BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

IN THE MATTER OF PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE MAMM CREEK FIELD AREA, GARFIELD COUNTY, COLORADO

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CAUSE NO. 191

 

ORDER NO. 191-49

 


REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission at 9:00 a.m. on July 23, 2007, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to form a ten (10) acre drilling and spacing unit consisting of the S S S NW NE and the N N N SW NE of Section 36, Township 6 South, Range 92 West, 6th P.M., to apply specifically to Williams Fork Formation production from the Scott 2-36 Well.

 

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 pursuant to the Oil and Gas Conservation Act.

 

4. On February 22, 1994, the Commission issued Order No. 191-4, which among other things, established 640-acre drilling and spacing units, for certain lands including Section 36, Township 6 South, Range 92 West, 6th P.M., for the production of gas and associated hydrocarbons from the from the Mesaverde Formation.

 

5. On October 21, 1997, the Commission issued Order No. 191-5, which among other things, vacated the 640-acre drilling and spacing unit established in Order No. 191-4 for Section 36, Township 6 South, Range 92 West, 6th P.M. and established sixteen (16) 40-acre drilling and spacing units for said lands, for the production of gas and associated hydrocarbons from the Mesaverde Group.

 

6. On January 10, 2005, the Commission issued Order No. 191-8, which among other things, allowed the optional drilling of one (1) well per ten (10) acres for the NW NE and SW NE of Section 36 in Township 6 South, Range 92 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation.

 

7. On August 10, 2006, BBC self-reported that the Scott 2-36 Well, drilled and completed as a vertical well in November 2001 by a predecessor operator, had a downhole location in the Williams Fork Formation partially within the adjoining 40-acre drilling and spacing unit. The Scott 2-36 Well has a surface location in the NW SE of Section 36, Township 6 South, Range 92 West, 6th P.M. The mislocated downhole location was not discovered by BBC until 2006. After self-reporting the downhole mislocation, BBC engineers undertook to determine the production from the Williams Fork Formation that was attributable to the 40-acre drilling and spacing unit upon which the well was drilled and the production that was attributable to the 40-acre adjoining drilling and spacing unit. These allocations were then proposed to the interested parties in both drilling units but to date BBC has not received 100% approval of such allocations.

8. On April 11, 2007, BBC, by its attorney, filed with the Commission a verified application to form a ten (10) acre drilling and spacing unit to apply specifically to Williams Fork Formation production from the Scott 2-36 Well (which has been shut-in since September 2005). This 10-acre drilling and spacing unit would consist of the S S S NW NE and the N N N SW NE of Section 36 of Township 6 South, Range 92 West, 6th P.M. The application requests that future production from the well be allocated to each of the above 5 acre tracts based upon the determinations made by BBCs engineers.

 

9. On May 29, 2007, BBC 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.

 

10. Testimony and exhibits submitted in support of the application indicated that BBC owns a substantial leasehold interest in the application lands, and that BBC was unable to obtain approval of its allocation formula from all interested parties making it necessary to establish a separate approximate ten (10) acre drilling and spacing unit for production from the Williams Fork Formation for the Scott 2-36 Well.

 

11. Testimony and an exhibits submitted in support of the application indicated that production from the Scott 2-36 Well is being allocated 44.697% to the S S S NW NE of Section 36 and 55.303% to the N N N NW NE of Section 36.

 

12. The above-referenced testimony and exhibit show that the proposed spacing and allocation of production will allow further development of the Williams Fork Formation to occur, will not promote waste, will not violate correlative rights and will assure the greatest ultimate recovery of gas and associated hydrocarbons substances from the reservoir.

 

13. Bill Barrett Corporation 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 establish an approximate ten (10) acre drilling and spacing unit consisting of the S S S NW NE and the N N N SW NE of Section 36, Township 6 South, Range 92 West, 6th P.M., to apply specifically to Williams Fork Formation production from the Scott 2-36 Well.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that a ten (10) acre drilling and spacing unit consisting of the S S S NW NE and the N N N SW NE of Section 36, Township 6 South, Range 92 West, 6th P.M. is hereby established, to apply specifically to production from the Williams Fork Formation for the Scott 2-36 Well, with a surface location in the NW SE of said Section 36.

              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 August, 2007, as of July 23, 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

August 15, 2007