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, GARFIELD COUNTY, COLORADO

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CAUSE NO.  191

 

ORDER NO. 191-50

 

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, in The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order establishing an approximate 160-acre drilling and spacing unit consisting of the SW¼ of Section 14, Township 6 South, Range 92 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles Formation, and to allow the equivalent of one well per ten acres to be drilled and produced on said unit.

 

FINDINGS

 

The Commission finds as follows:

 

1.  Antero Resources Piceance Corporation (“Antero”), 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 April 24, 2006, the Commission issued Order No. 191-24, which among other things, established a 160-acre drilling and spacing unit in the SW¼ of Section 14, Township 6 South, Range 92 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation and allowed the equivalent of one well per 10 acres.  

 

5.  On May 23, 2007, Antero, by its attorney, filed with the Commission a verified application for an order to establish an approximate 160-acre drilling and spacing unit consisting of the SW¼ of Section 14, Township 6 South, Range 92 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles Formation, and to allow the equivalent of one well per ten acres to be drilled and produced on said unit.

 

That all future Iles Formation wells drilled on the application lands should be located downhole anywhere upon such drilling and spacing unit but no closer than 100 feet from the boundary of the drilling and spacing unit without exception being granted by the Director of the Commission.

 

In cases where the application 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 boundaries of the drilling and spacing unit which so abuts or corners the lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  All Iles Formation wells drilled upon the application lands will be drilled only in connection with the drilling of Williams Fork Formation wells and 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 Director of the Oil and Gas Conservation Commission.

 

6.  On July 12, 2007, 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.

 

7.  Testimony and exhibits submitted in support of the application showed that a drilling and spacing unit is necessary due to the numerous leases and unleased mineral ownership within the application lands and that establishing the unit would allow downhole well locations to be more efficiently placed thus assuring the greatest ultimate recovery of gas and associated hydrocarbon substances.  Additional testimony and evidence supporting the referenced prior order of the Commission shows that the proposed ten acre well density will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas and will not violate correlative rights.

 

8.  No protests to the application have been filed with the Commission or the applicant. 

 

9.  Antero Resources Piceance Corporation agreed to be bound by oral order of the Commission. 

 

10.  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 160-acre drilling and spacing unit consisting of the SW¼ of Section 14, Township 6 South, Range 92 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles Formation, and allow the equivalent of one well per ten acres to be drilled and produced on said unit.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that an approximate 160-acre drilling and spacing unit is hereby established consisting of the SW¼ of Section 14, Township 6 South, Range 92 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles Formation.

 

IT IS FURTHER ORDERED, that the equivalent of one well per ten acres is hereby allowed to be drilled and produced on said unit.

 

IT IS FURTHER ORDERED, that all future Iles Formation wells drilled on the application lands shall be located downhole anywhere upon such drilling and spacing unit but no closer than 100 feet from the boundary of the drilling and spacing unit without exception being granted by the Director of the Commission.  In cases where the application 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 boundaries of the drilling and spacing unit which so abuts or corners the lands without exception being granted by the Director of the Oil and Gas Conservation Commission.  All Iles Formation wells drilled upon the application lands shall be drilled only in connection with the drilling of Williams Fork Formation wells and shall 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 Director of the Oil and Gas Conservation Commission.

 

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