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
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