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

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 9:00 a.m. on March 25, 2010, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, to consider whether to vacate, modify, or affirm Order No. 191-58, issued December 9, 2008. 

FINDINGS

The Commission finds as follows:

1.  Antero Resources Piceance Corporation (“Antero”), as the applicant that resulted in issuance of Order No. 191-58, is an interested party in the subject matter of the above‑referenced hearing.  James R. Carnahan and Colleen Carnahan (“Carnahans”), as protestants to Antero’s application that resulted in issuance of Order No. 191-58, are interested parties 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.  The Commission set a hearing on January 11, 2010 (ultimately continued to the March 25, 2010 hearing) to reconsider Order No. 191-58, issued December 9, 2008.  The Commission was to consider whether to vacate, modify, or affirm Order No. 191-58.  

5.  The history of this matter is relevant.  On October 10, 2008, Antero, by its attorney, filed with the Commission a verified application for an order to vacate the approximate 186.3-acre drilling and spacing unit established in Order No. 191-37 and establish two drilling and spacing units, one consisting of approximately 154.36 acres and one consisting of approximately 36.845 acres, and continue to allow the equivalent of one well per 10 acres, for certain lands in the N½ of Section 12, Township 6 South, Range 93 West, 6^th P.M., for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.  On November 24, 2008, the Carnahans, who owned unleased minerals in the area proposed for the 36.845-acre drilling and spacing unit, by their attorney, filed a protest to the application.  The Carnahans alleged in their protest that dividing the 186.3-acre drilling and spacing unit into two separate and distinct drilling and spacing units would constitute waste and would violate their correlative rights, and they requested that the Commission deny the application. 

6.  On November 25, 2008, the Hearing Officers convened a prehearing conference, wherein, following argument by Antero and the Carnahans on Antero’s request to dismiss the protest as without merit, the Hearing Officers found that the granting of the application would not promote waste and would not violate the Carnahans’ correlative rights and, consequently, the protest was dismissed.  On December 9, 2008, after allowing Antero and the Carnahans to make brief statements pursuant to Rule 520.b. of the Commission’s Rules of Practice and Procedure (2 CCR 404-1, “Rules” or, individually, “Rule”) the Commission approved the application as part of its consent agenda, and entered Order No. 191-58, which vacated the approximate 186.3-acre drilling and spacing unit and established an approximate 154.377-acre drilling and spacing unit and an approximate 36.845-acre drilling and spacing unit, and continued to approve the equivalent of one well per 10 acres well density, for certain lands in the N½ of Section 12, Township 6 South, Range 93 West, 6^th P.M., for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations. 

7.  Subsequently, the Carnahans filed a Complaint in District Court, in and for the City and County of Denver (Case No. 09 CV 614), seeking judicial review of Order No. 191-58 pursuant to § 24‑4‑106, C.R.S.  The Carnahans alleged that Antero’s application was subject to a valid protest and, therefore, the Commission should have held a hearing pursuant to Rule 528. 

8.  Under the specific facts and circumstances of this case and in order to resolve the pending litigation and avoid litigation costs, the Commission determined to set a hearing to reconsider Order No. 191-58, including Antero’s application and the Carnahans’ protest, in accordance with Rule 528.  The parties to Case No. 09 CV 614 filed a stipulated motion to dismiss Carnahans’ claims with prejudice.  

9.  On March 8, 2010 (prior to the Commission hearing), Antero, by its attorney, filed a Motion to Vacate Order No. 191-58, to expeditiously resolve the matter in a manner that conserves the resources of the parties and the Commission.  Granting the motion (which was unopposed by Carnahans) would have the effect of reinstating Order No. 191-37, unamended.

ORDER

NOW, THEREFORE IT IS ORDERED, that the Motion to Vacate Order No. 191-58 filed by Antero Resources Piceance Corporation is hereby granted.

IT IS FURTHER ORDERED, that Order No. 191-37 is hereby reinstated, unamended.

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 April, 2010, as of March 25, 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

April 24, 2010