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BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION OF FIELD RULES TO GOVERN OPERATIONS IN THE BUCKSKIN FIELD, ADAMS COUNTY, COLORADO |
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CAUSE NO. 195
ORDER NO. 195-2 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on May 17, 1966, at 10 a.m., in Room 132, State Services Building, Denver, Colorado, after publication of Notice of Hearing and proper service or waiver of service thereof, and Notice of Continuation of the hearing originally set for April 19, 1966, all as required by law and the rules and regulations of the Commission, on the application of Charles R. Wilcox for an order requiring the pooling of all interests in the 320-acre unit described as the E½ of Section 16, Township 2 South, Range 60 West, Adams County, Colorado.
FINDINGS
The Commission finds as follows:
1. That due notice of the time, place and purpose of the hearing has been given in all respects as required by law.
2. That 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.
3. That on April 19, 1966, the Commission issued its Order No. 195-1 which, among other things, established 320-acre drilling units for the production of gas and associated hydrocarbons from the "J" sand formation, and designated the E½ of Section 16, Township 2 South, Range 60 West, Adams County, Colorado, as one of such drilling units.
4. That Applicant is an "interested person" within the meaning of 100-6-4(6) of the Oil and Gas Conservation Act of the State of Colorado.
5. That reasonable effort has been made to obtain the voluntary pooling of all interests in said drilling unit for the operation thereof, but that it has not been possible to secure the agreement of all owners of interests in said drilling unit for the voluntary pooling thereof.
6. That in order to insure proper and efficient operation of said drilling unit, an order should be made pooling all interests in the 320-acre drilling unit defined herein.
7. That an order of the Commission pooling all interests m said drilling unit is necessary, just and reasonable in order to afford each owner of interest in said drilling unit the opportunity to recover and receive his just and equitable share of the gas and associated hydrocarbons produced from the "J" sand formation underlying said drilling unit.
8. That production obtained from said drilling unit should be allocated to each tract therein on the basis of the proportion that the number of acres in such tract bears to the total number of acres within said drilling unit, with each owner of interest in said tracts to be entitled to receive his share of the production of the well to be located on said drilling unit, applicable to his interest in said drilling unit.
9. That additional time should be allowed for the working interest owners of said drilling unit to negotiate costs of drilling, completing, and operating the No. 1 State-Plains well located in the NE¼NE¼ Section 16, Township 2 South, Range 60 West, 6th P.M., Adams County, Colorado; and that an operating agreement regarding such costs should be considered by the Commission at its next regular hearing.
ORDER
NOW, THEREFORE, IT IS ORDERED that, pursuant to the provisions of 100-6-4(6) of the Oil and Gas Conservation Act of the State of Colorado, all interests in the drilling unit defined as the E½ of Section 16, Township 2 South, Range 60 West, 6th P.M., in the Buckskin Field, Adams County, Colorado, are hereby pooled for the development and operation of said drilling unit.
IT IS FURTHER ORDERED, that the production obtained from said drilling unit shall be allocated to each tract therein on the basis of the proportion that the number of acres in such tract bears to the total number of acres within said drilling unit, with each owner of interest in said tracts to be entitled to receive his share of the production of the well to be located on said drilling unit, applicable to his interest in said drilling unit.
IT IS FURTHER ORDERED, that provision for the payment of reasonable actual costs for the permitted well on said drilling unit, including a reasonable charge for supervision and storage, shall be considered at a hearing to be held June 14, 1966, at 10 a.m., in Room 132, State Services Building, Denver, Colorado.
IT IS FURTHER ORDERED, that the above orders shall become effective June 1, 1966.
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.
ORDERED this 17th day of May 1966.
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OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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By |
William R. Smith, Secretary |
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BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION OF FIELD RULES TO GOVERN OPERATIONS IN THE BUCKSKIN FIELD, ADAMS COUNTY, COLORADO |
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CAUSE NO. 195
ADDENDUM TO ORDER NO. 195-2 |
REPORT OF THE COMMISSION
On May 17, 1966, the Commission issued its Order No. 195-2 which, among other things, ordered that a hearing be held June 14, 1966, at 10 a.m., in Room 132, State Services Building, Denver, Colorado, to consider provisions for the payment of reasonable actual costs for the permitted well on the drilling unit pooled in said order, which hearing was subsequently continued to July 19, 1966.
At this hearing the parties in interest submitted figures for the proper cost of the well, which figures were based on different theories and therefore were not in agreement. After requesting that briefs be submitted on both positions, the matter was taken under advisement. Subsequently, briefs were submitted as requested, and after considering evidence in the case, and the briefs, the Commission finds as follows:
FINDINGS
1. That the proper cost of the No. 1 State-Plains well, located 660 feet from the north line and 330 feet from the east line of Section 16, Township 2 South, Range 60 West, 6th P.M., Adams County, Colorado, including capital expenditures to June 1, 1966, with appropriate credits for bottom hole money received, return of load oil, and salvage of equipment previously charged to the well, is determined as follows:
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COSTS: |
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Intangible Drilling Cost |
$37,654.12 |
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Initial Equipment Cost |
17,679.33 |
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Storage and Separator Equipment Cost |
2,925.00 |
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Additional Expenses after acquisition by Tenneco and Continental |
3,641.70 |
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TOTAL COST |
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$ |
61,900.15 |
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CREDITS: |
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Bottom Hole Contribution |
$4,000.00 |
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Return of Load Oil |
753.86 |
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Salvage of Equipment included above |
400.00 |
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TOTAL CREDITS |
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$ |
5,153.86 |
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PROPER COST |
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$ |
56,746.29 |
2. That a charge of $125 per month is a reasonable charge for supervision and storage of production from said No. 1 State-Plains well.
3. That testimony presented at the hearing and agreed to by all parties indicates that reservoir depletion to date has been 41.4 per cent of the total reservoir reserves,
4. That the proper charge to Wilcox, et al, for drilling and equipping of said No. 1 State-Plains well should be the actual cost, as set forth in Finding 1 hereof, adjusted by the depletion rate of 41.4 per cent, such adjusted charge being $33,253.33 times their appropriate share of the drilling unit.
ORDER
NOW, THEREFORE, IT IS ORDERED that, the proper cost chargeable to the Wilcox, et al. interests for the No. 1 State-Plains well, located 660 feet from the north line and 330 feet from the east line of Section 16, Township 2 South, Range 60 West, 6th P.M., Adams County, Colorado, is one-half (½) of $33,253.33, or $16,626.67.
IT IS FURTHER ORDERED, that the reasonable charge for supervision and storage of production from the No. 1 State-Plains well is One Hundred Twenty-five Dollars ($125) per month.
IT IS FURTHER ORDERED, that the above orders shall be effective as of June 1, 1966.
ORDERED this 16th day of August 1966.
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OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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By |
William R. Smith, Secretary |