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

 

IN THE MATTER OF THE APPLICATION OF ENCANA OIL & GAS (USA), INC. FOR AN ORDER TO ESTABLISH WELL LOCATION RULES FOR SECTIONS 17 AND 20, TOWNSHIP 7 SOUTH, RANGE 92 WEST, 6TH P.M., FOR THE WILLIAMS FORK AND ILES FORMATIONS OF THE MESAVERDE GROUP, MAMM CREEK FIELD, GARFIELD COUNTY, COLORADO

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CAUSE NO. 191

 

DOCKET NO. 1307-EX-02

 

ORDER NO. 191-97

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on July 29, 2013, at offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to establish setback rules applicable to the drilling and producing of wells from a federal exploratory unit located in Sections 17 and 20, Township 7 South, Range 92 West, 6th P.M. for the Williams Fork and Iles Formations of the Mesaverde Group.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Encana Oil & Gas (USA), Inc. (“Encana” 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.d.(3) of the Rules and Regulations of the Oil and Gas Conservation Commission provides that in a unit operation, approved by federal or state authorities, Rule 318 shall not apply except that no well in excess of two thousand five hundred (2,500) feet in depth shall be located less than 600 feet from the exterior or interior boundary of the unit area and no well less than 2,500 feet in depth below the surface shall be located less than 200 feet from the exterior or interior (if there be one) boundary of the unit area unless otherwise authorized by the order of the Commission after proper notice to owners outside the unit area.  Sections 17 and 20, Township 7 South, Range 92 West, 6th P.M. are subject to Rule 318.d.(3) for the Williams Fork and Iles Formations of the Mesaverde Group.

 

5.         Encana is the operator of the Hunter Mesa Unit approved on November 30, 1993 by the Bureau of Land Management (“BLM”).

 

6.         On May 30, 2013, Encana, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an order to establish setback rules applicable to the drilling and producing of wells from the Hunter Mesa Unit in the Williams Fork and Iles Formations of the Mesaverde Group for the below-described lands (“Application Lands”), with all wells drilled under this Application to be located downhole no closer than 100 feet from the boundaries of the exterior or interior (if applicable) of the uncommitted tract boundary, unless such boundary abuts or corners lands of which the Commission has not at the time of drilling permit application granted the right to drill 10-acre density Williams Fork and/or Iles Formation wells, in which event the wells shall be located downhole no closer than 200 feet from the exterior or interior (as applicable) unit boundary, without exception being granted by the Director:

 

                        Township 7 South, Range 92 West, 6th P.M.

                        Section 17:      All

                        Section 20:      All

 

7.         On July 16, 2013, Encana, by its attorneys, 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.

 

8.         Land testimony and exhibits submitted in support of the Application by Jessica Sellyei, Land Negotiator for Encana, showed that the surface is partially owned in fee and by the United States and Encana holds a 100% leasehold interest in the Application Lands.

 

9.         Geologic testimony and exhibits submitted in support of the Application by Christopher F. Cassle, Geologist for Encana, showed the Williams Fork and Iles Formations are present throughout the Application Lands.

 

10.       Engineering testimony and exhibits submitted in support of the Application by Lafell T. Loveland, Reservoir Engineer for Encana, showed that reduced setbacks, from 600 feet to 100 feet, along the exterior boundaries of Sections 17 and 20, Township 7 South, Range 92 West, 6th P.M. will allow production from an estimated 65 potential well locations and 68.6 billion cubic feet in undeveloped natural gas resources.

 

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 hydrocarbons, and will not violate correlative rights.

 

12.       Encana 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 to establish setback rules whereby a well shall be located downhole no closer than 100 feet from the boundaries of the exterior or interior (if applicable) unit boundary unless such boundary abuts or corners lands of which the Commission has not at the time of drilling permit application granted the right to drill 10-acre density Williams Fork and/or Iles Formation wells in which event the wells shall be located downhole no closer than 200 feet from the exterior or interior (as applicable) unit boundary for the Williams Fork and Iles Formations.

 

 

 

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         All wells drilled to the Williams Fork and/or Iles Formation within the below-described lands shall be located downhole no closer than 100 feet from the boundaries of the exterior or interior (if applicable) unit boundary unless such boundary abuts or corners lands of which the Commission has not at the time of drilling permit application granted the right to drill 10-acre density Williams Fork and/or Iles Formation wells, in which event the wells shall be located downhole no closer than 200 feet from the exterior or interior (as applicable) unit boundary, without exception being granted by the Director:

 

                        Township 7 South, Range 92 West, 6th P.M.

                        Section 17:      All

                        Section 20:      All

 

IT IS FURTHER ORDERED:

 

1.         The provisions contained in the above order shall become effective immediately.

 

2.         The Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

 

3.         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.

 

4.         An application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

 

ENTERED this   27   day of August, 2013, as of July 29, 2013.

           

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary