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

 

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. 191-86

 

REPORT OF COMMISSION

 

This cause came on for hearing before the Commission on April 4, 2011, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to establish an approximate 120-acre drilling and spacing unit for certain lands located in Sections 32 and 33, Township 6 South, Range 91 West, 6th P.M., 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” or "Applicant"), 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 Oil and Gas Conservation 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 SE¼ SE¼ of Section 32, Township 6 South, Range 91 West, 6th P.M., is subject to this Rule for the Williams Fork and Iles Formations. 

 

5.    On January 10, 2005 (corrected June 8, 2005 and November 5, 2008), the Commission entered Order No. 191-8, which among other things, approved of the equivalent of one well per 10-acre density for the W½ SW¼ of Section 33, Township 6 South, Range 91 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation.

 

6.  On April 25, 2005 (corrected November 29, 2007 and November 5, 2008), the Commission entered Order No. 191-10, which among other things, approved of the equivalent of one well per 10-acre density for the W½ SW¼ of Section 33, Township 6 South, Range 91 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles Formation.

 

7.  On January 31, 2011, BBC, by its attorney, filed with the Commission a verified application (the “Application”) for an order to establish an approximate 120-acre drilling and spacing unit for the below-listed lands (the “Application Lands”), and authorize the equivalent of one well per 10-acre well density for said unit, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations:

 

Township 6 South, Range 91 West, 6th P.M.

Section 32:    SE¼ SE¼ (“Tract 1”)

Section 33:    W½ SW¼ (“Tract 2”)

 

BBC requested that all future Williams Fork and Iles Formation wells to be drilled under this Application should be located downhole anywhere upon the Application Lands but no closer than 100 feet from the unit boundaries 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 Formation and Iles Formation wells, the well should be located downhole no closer than 200 feet from the unit boundaries so abutting or cornering such lands without exception being granted by the Director of the Commission.BBC further requested that, 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.

 

8.    On March 22, 2011, 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. Sworn written testimony and exhibits were submitted in support of the Application.

 

9.    Testimony and exhibits submitted in support of the Application by Cindy Sandell, Landman for BBC, showed that BBC is the owner of 100% of the operating rights in the Williams Fork and Iles Formations underlying the Application Lands.  Additional testimony showed that multiple wells have been drilled, tested and completed in the Williams Fork and Iles Formations on lands in the immediate vicinity of the Application Lands.  Further testimony showed that establishing a drilling and spacing unit and approving 10-acre well density on the Application Lands, in a manner consistent with development approved for adjacent lands, will promote economic and efficient development of the Williams Fork and Iles Formations, assure a greater ultimate recovery of gas, prevent waste, and not violate correlative rights.

 

10.  In support of the Application, BBC requests that the Commission take administrative notice of the testimony and exhibits submitted in those hearing files listed below, for certain lands adjacent to the Application Lands that have been approved for 10-acre density drilling of the Williams Fork and Iles Formations:  

 

            Order 191-8, issued 1/10/2005

            Order 191-9, issued 2/14/2005

            Order 191-10, issued 4/25/2005

            Order 191-32, issued 8/16/2006

            Order 191-65, issued 6/11/2011

 

11.  The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.

 

12.  BBC agreed to be bound by oral order of the Commission. 

 

13.  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 establishing an approximate 120-acre drilling and spacing unit for certain lands located in Sections 32 and 33, Township 6 South, Range 91 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.

 

ORDER

 

                        NOW, THEREFORE IT IS ORDERED, that an approximate 120-acre drilling and spacing unit is hereby established for the below-listed lands, and the equivalent of one well per 10-acre well density is approved, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations:

 

Township 6 South, Range 91 West, 6th P.M.

Section 32:    SE¼ SE¼ (“Tract 1”)

Section 33:    W½ SW¼ (“Tract 2”)

                                   

                         IT IS FURTHER ORDERED, that all future Williams Fork Formation and Iles Formation wells to be drilled under this Application shall be located downhole anywhere upon the Application Lands but no closer than 100 feet from the unit boundaries 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 Formation and Iles Formation wells, the well shall be located downhole no closer than 200 feet from the unit boundaries so abutting or cornering such lands without exception being granted by the Director of the Commission.

 

IT IS FURTHER ORDERED, that except as previously authorized by order of the Commission, wells to be drilled under this order shall 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 completing 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 immediately.

           

                        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 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  15th  day of April, 2011, as of April 4, 2011.

 

           

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________         

                                                                                    Robert A. Willis, Acting Secretary

 

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

April 15, 2011