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. 191-71
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REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 9:00 a.m. on February 22, 2010, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to establish an approximate 120-acre drilling and spacing unit consisting of certain lands in Sections 13, 14 and 23 of Township 6 South, Range 92 West, 6th P.M., with continued approval of the equivalent of one well per 10 acres well density for the unit, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.
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. Rule 318.a. of the Rules and Regulations of the Commission requires that wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and located not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply. The SW¼ SW¼ of Section 13 and the SE¼ SE¼ of Section 14, Township 6 South, Range 92 West, 6th P.M. are subject to this Rule for the Williams Fork and Iles Formations.
5. On August 18, 1982, the Commission issued Order No. 191-3, which among other things, established 640-acre drilling and spacing units for certain lands, including Section 23, Township 6 South, Range 92 West, 6th P.M., for the production of gas from the Mesaverde Formation.
6. On December 2, 2002, the Commission issued Order No. 191-6, which effectively rescinded the 640-acre drilling and spacing unit established for Section 23, Township 6 South, Range 92 West, 6th P.M. under Order Nos. 191-3 and 191-4, for the production of gas from the Mesaverde Formation, and placed said Section 23 under the provisions of Rule 318.a.
7. On January 10, 2005 (corrected June 8, 2005 and November 5, 2008), the Commission issued Order No. 191-8, which among other things, approved the equivalent of one well per 10 acres for certain lands, including the NE¼ NE¼ of Section 23, Township 6 South, Range 92 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation.
8. On April 25, 2006 (corrected November 29, 2007 and November 5, 2008), the Commission issued Order No. 191-10, which among other things, approved the equivalent of one well per 10 acres for certain lands, including the SW¼ SW¼ of Section 13, SE¼ SE¼ of Section 14, and the NE¼ NE¼ of Section 23, Township 6 South, Range 92 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles Formation.
9. On December 22, 2009, BBC, by its attorney, filed with the Commission a verified application to establish an approximate 120-acre drilling and spacing unit consisting of the below-listed lands, with continued approval of the equivalent of one well per 10 acres well density for the unit, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations:
Section 13: SW¼ SW¼
Section 14: SE¼ SE¼
Section 23: NE¼ NE¼
All future Williams Fork and Iles Formation wells to be drilled upon said drilling and spacing unit should be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the boundaries of the unit without exception being granted by the Director of the Commission. It is provided however that in cases where the 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 Williams Fork and Iles Formation wells, the well should be located downhole no closer than 200 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Commission.
Except as previously authorized by order of the Commission, wells to be drilled under this order should be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) and that Iles Formation wells should be drilled and completed only in association with the drilling and completing of wells in the Williams Fork Formation, unless exception is granted by the Commission pursuant to application made for such exception.
10. On February 8, 2010, 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 as is provided for by Rule 511. Sworn written testimony and exhibits were submitted in support of the application.
11. Testimony and exhibits submitted in support of the application showed that BBC is the majority leaseholder owner of the application lands. Additional testimony showed that the application lands and those lands adjacent to and surrounding the application lands have been approved for 10-acre density drilling for the Williams Fork and Iles Formations. Further testimony showed that while all the application lands are covered by one lease, there are different royalty owners for each quarter quarter section which would require separate metering and production facilities unless this application for establishment of a drilling and spacing unit for the application lands is granted. Testimony showed that the granting of this application will minimize the surface production equipment necessary to produce the twelve potential wells to be drilled on the application lands, and will promote economic and efficient development of the Williams Fork and Iles Formations, prevent waste, and protect correlative rights.
12. The above-referenced testimony and exhibits showed that granting the application for well 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.
13. BBC 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., the Commission should enter an order to establish an approximate 120-acre drilling and spacing unit consisting of certain lands in Sections 13, 14 and 23 of Township 6 South, Range 92 West, 6th P.M., with continued approval of the equivalent of one well per 10 acres well density for the unit, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.
NOW, THEREFORE IT IS ORDERED, that, an approximate 120-acre drilling and spacing unit is hereby established, for the below-listed lands, with continued approval of the equivalent of one well per 10 acres well density for the unit, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations:
Section 13: SW¼ SW¼
Section 14: SE¼ SE¼
Section 23: NE¼ NE¼
IT IS FURTHER ORDERED, that, as to the above described drilling and spacing unit, Williams Fork and Iles Formation wells shall be located downhole anywhere upon the spacing unit provided no such wells shall be located downhole any closer than 100 feet from the boundary of the unit unless such boundary abuts or corners lands in respect of which the Commission has not at the time of the drilling permit application granted the right to drill 10-acre density Williams Fork and Iles Formation wells in which event Williams Fork and Iles Formation wells to be drilled upon the given drilling and spacing unit shall be drilled downhole no closer than 200 feet from that portion of the unit boundary which so abuts or corners the lands in respect of which 10-acre density downhole drilling for Williams Fork and Iles Formation wells has not been ordered by the Commission without exception being granted by the Director of the Commission.
IT IS FURTHER ORDERED, except as previously authorized by order of the Commission, wells to be drilled under this order should be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) and that Iles Formation wells shall be drilled and completed only in association with the drilling and completion of wells in the Williams Fork Formation, unless exception is granted by the Commission pursuant to application made for such exception.
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 March, 2010, as of February 22, 2010.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Carol Harmon, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
March 9, 2010