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

 

IN THE MATTER OF THE APPLICATION OF URSA OPERATING COMPANY LLC, FOR AN ORDER TO APPROVE UP TO TWO HORIZONTAL WELLS IN AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT ESTABLISHED FOR SECTIONS 11 AND 14, TOWNSHIP 6 SOUTH, RANGE 92 WEST, 6TH P.M. FOR THE WILLIAMS FORK FORMATION OF THE MESAVERDE GROUP, MAMM CREEK AND GRAND VALLEY FIELDS, GARFIELD COUNTY, COLORADO

)

)

)

)

)

)

)

)

)

)

CAUSE NOS. 191 & 510

 

DOCKET NO. 1309-AW-55

 

ORDER NOS. 191-98 & 510-65

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on September 16, 2013, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to approve one additional horizontal well, for a total of up to two horizontal wells within an approximate 640-acre drilling and spacing unit established for Sections 11 and 14, Township 6 South, Range 92 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Ursa Operating Company LLC (“Ursa” 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.         On May 29, 2012, the Commission entered Order Nos. 191-94 and 510-61 which established an approximate 640-acre exploratory drilling and spacing unit for the production of oil, gas and associated hydrocarbons from the Williams Fork Formation and also pooled all interests in unit, to accommodate the Valley Farms F-1H Well (API No. 05-045-18286), for the development and operation of the Williams Fork Formation. The drilling and spacing unit established by these Orders overlays the existing drilling and spacing units (or portions thereof) established for existing vertical wells.  Sections 11 and 14, Township 6 South, Range 92 West, 6th P.M. are subject to these Orders for the Williams Fork Formation.

 

            5.         On July 18, 2013,Ursa, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”), for an order to approve one additional horizontal well, for a total of up to two horizontal wells within an approximate 640-acre drilling and spacing unit established for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Williams Fork Formation, with the treated interval of the wellbore to be located no closer 600 feet from the unit boundary, and no closer than 300 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director:

 

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

Section 11:      W˝

Section 14:      W˝

 

Applicant stated production from the additional horizontal well will be based on the proportion that each mineral interest in the unit bears to the total acreage in the unit.

 

6.         On September 3, 2013, Ursa, 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.

 

7.         Land testimony and exhibits submitted in support of the Application by Jarred McGee, Landman for Ursa, showed Ursa is an owner with the right to drill wells within the Application Lands.

 

8.         Geologic testimony and exhibits submitted in support of the Application by Duke Cooley, Senior Geologist for Ursa, showed the Williams Fork Formation is present throughout the Application Lands, where there is a continuous gas column approximately 1600 feet thick between the top of the Rollins sandstone and the top of gas.

 

9.         Engineering testimony and exhibits submitted in support of the Application by Andrew Haney, Vice President of Development – Rockies for Ursa, estimated an additional horizontal well would result in an EUR of 6.6 BCFE of gas, or approximately 1.0 BCFE per 1000 feet of lateral wellbore, resulting in an approximate 26% rate of return, showing the economics of the project are sound.

 

10.       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.

 

11.       Ursa agreed to be bound by oral order of the Commission. 

 

12.       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 approve one additional horizontal well, for a total of up to two horizontal wells within an approximate 640-acre drilling and spacing unit established for Sections 11 and 14, Township 6 South, Range 92 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group.

 

ORDER

 

IT IS HEREBY ORDERED:

 

            1.         One additional horizontal well, for a total of up to two horizontal wells within an approximate 640-acre drilling and spacing unit established for the below-described lands, is hereby approved, for the production of oil, gas and associated hydrocarbons from the Williams Fork Formation, with the treated interval of the horizontal wellbore to be located no closer 600 feet from the unit boundary, and no closer than 300 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director:

 

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

Section 11:      W˝

Section 14:      W˝

 

 

2.         Production from the additional horizontal well will be based on the proportion that each mineral interest in the unit bears to the total acreage in the unit.

 

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  11th  day of October, 2013, as of September 16, 2013.

           

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary