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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 MAM CREEK FIELD, GARFIELD COUNTY, COLORADO |
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CAUSE NO. 191
ORDER NO. 191-7 |
This cause came on for hearing before the Commission at 10:00 a.m. on April 21, 2003, in the Council Chambers, Arvada City Hall, 8101 Ralston Road, Arvada, Colorado for an order to remove Section 35, Township 6 South, Range 92 West, 6th P.M. from the provisions of Order Nos. 191-3 and 191-4 and to place the lands under the Rules and Regulations of the Commission, including Rule 318 for well locations.
FINDINGS
The Commission finds as follows:
1. Calpine Natural Gas Company (“Calpine”), 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.
4. On July 19, 1982, the Commission issued Order No. 191-3 which established 640-acre drilling and spacing units for the production of gas from the Mesaverde Formation, including the Cozzette and Corcoran members, with the permitted well to be located no closer than 990 feet from the unit boundary underlying certain lands in the Mam Creek Field. The spaced area was extended by Order No. 191-4 issued February 22, 1994 and the below-listed lands are subject to the orders:
Township 6 South, Range 92 West, 6th P.M.
Sections 22 thru 27: All
Sections 35 and 36: All
5. On December 2, 2002, the Commission issued Order No. 191-6 which removed Section 23, Township 6 South, Range 92 West, 6th P.M. from the provisions of Order Nos. 191-3 and 191-4 and confirmed oil and gas operations on those lands would be subject to the Rules and Regulations of the Colorado Oil and Gas Conservation Commission, including Rule 318. for well locations.
6. On March 3, 2003, Calpine filed with the Commission a verified Application for an order to vacate Order Nos. 191-3 and 191-4 insofar as they apply to Section 35, Township 6 South, Range 92 West, 6th P.M., placing the lands under the provisions of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission, and allow the location of wells to produce gas and associated hydrocarbons from the Mesaverde Formation, including but not limited to the Cozzette and Corcoran Formations, subject to Commission Rule 318. No wells have been drilled in the subject lands. Calpine also requests that the Director be allowed to grant exceptions to the well location requirement in accordance with Rule 318.
7. Testimony and exhibits presented at the administrative hearing showed that Section 35 is leased by Calpine and EnCana and that no wells have been drilled in Section 35.
8. Testimony and exhibits presented at the administrative hearing showed the entired Mesaverde Formation with pay sections typical of the wells in the area. Additional testimony showed that the sands in the Williams Fork portion of the Mesaverde Formation are 10 to 30 feet thick, fluvial and point bar in origin, discontinuous and difficult to correlate.
9. Testimony and exhibits presented at the administrative hearing showed that there is a low recovery rate for all the wells, that calculations show that 40-acre recovery factors would be viable, and that even 20-acre development may result in favorable recovery. Additional testimony showed that the nearby Gibson Gulch Federal Unit is developed on 20-acre well density. Further testimony indicated that the current spacing and well density is not adequate to efficiently and economically drain Section 35 and the drilling of additional wells with two different price scenarios would be economical.
10. The approval of the application would allow additional reserves to be recovered, prevent waste and protect correlative rights.
11. At the time of the administrative hearing, Calpine Natural Gas Company agreed to be bound by an oral order of the Commission.
12. Based on the facts stated in the verified application, having received no protests and having been heard by the Hearing Officer who recommended approval, the Commission should approve an order to remove Section 35, Township 6 South, Range 92 West, 6th P.M. from the provisions of Order Nos. 191-3 and 191-4 and place the lands under the Rules and Regulations of the Commission, including Rule 318 for well locations.
NOW, THEREFORE IT IS ORDERED, that Section 35, Township 6 South, Range 92 West, 6th P.M. is hereby removed from the provisions of Order Nos. 191-3 and 191-4 and that the lands shall be placed under the provisions of the Rules and Regulations of the Commission.
IT IS FURTHER ORDERED, that the below-listed lands shall remain subject to Order Nos. 191-3 and 191-4:
Township 6 South, Range 92 West, 6th P.M.
Section 22: All
Sections 24 thru 27: All
Section 36: All
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.
ENTERED this day of April, 2003, as of April 21, 2003.
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
April 30, 2003