BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF THE POW-WOW UNIT IN LOGAN COUNTY, COLORADO

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CAUSE NO. 220

 

ORDER NO. 220-2

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission on November 20, 1989 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Central Operating Company for an order approving a certain Unit Operating Agreement and Unit Agreement for the Pow-Wow Unit Area, providing for involuntary unit operations for the reservoir consisting of the "J" Sand formation underlying certain lands in the Pow-Wow Field, Logan County, Colorado.

 

FINDINGS

 

The Commission finds as follows:

 

1.      Central Operating Company, 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.

 

4.      The Acting Director as Hearing Officer heard the application and found it meets the requirements established, that a revised agreement has been submitted to those eligible to participate in the unit and that the required approval has not been obtained, and recommends the application be approved.

 

5.      The "J" Sand formation of Cretaceous age was encountered between the depths of 5290 and 5380 feet below the surface of the proposed unit boundary. Said "J" Sand, as so encountered, is a common source of supply and has been defined and determined by drilling, to be productive underlying the following lands in Logan County, Colorado to-wit:

 

Township 12 North, Range 53 West, 6th P.M.

Section 22:

S1/2

Section 23:

S1/2, Lot 1, E1/2 Lot 2

Section 26:

NW1/4

Section 27:

N1/2

 

containing a total of 1183.43 acres, more or less.

 

6.      The terms and conditions provided by the Unit Agreement and Unit Operating Agreement meet the requirements of the statute in accordance with 34-60-118 C.R.S., as amended, and are just and reasonable to all interests contained within said unit area.  The plan for unit operations as presented by the Applicant, providing for a secondary recovery program by the injection of fluids into the "J" Sand reservoir underlying the Pow-Wow ("J" Sand) Unit Area, as described herein is necessary to increase the ultimate recovery of oil and gas and the value of the estimated additional recovery of oil and gas exceeds the estimated additional cost incident to conducting such operations.

 

7.      Testimony presented at the Administrative Hearing indicated that said Unit Agreement and Unit Operating Agreement have not been approved in writing by more than 80% of the working interest owners and has been approved by more than 80% of the owners of the production and proceeds attributable to royalty, overriding royalty and production payments.

 

8.      All rules established by Order No. 220-1 for drilling and spacing units and permitted well locations should be rescinded for the Pow-Wow ("J" Sand) Unit Area herein described.

 

9.      The approval of the unit plan of operations should not become effective unless, or until the Applicant demonstrates, by affidavit submitted to the Director of the Commission, that persons owning the required percentages of interest in the unit area approve said agreement.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED, that:

 

1.      The Unit Agreement and Unit Operating Agreement covering lands in the Pow-Wow ("J" Sand) Unit Area, which agreements are attached to, and made a part of the original order of this Commission on file in the office of the Commission, are approved as being in the public interest for Conservation.

 

2.      The "J" Sand reservoir, common source of supply, underlies the following lands in Logan County, Colorado, to-wit:

 

Township 12 North, Range 53 West, 6th P.M.

Section 22:

S1/2

Section 23:

S1/2, Lot 1, E1/2 Lot 2

Section 26:

NW1/4

Section 27:

N1/2

 

containing a total of 1183.43 acres, more or less.

 

3.      The provisions contained in said Unit Agreement and Unit Operating Agreement as they pertain to 34-60-118 of the Oil and Gas Conservation Act are just and reasonable, and are incorporated herein as the Commission's plan of involuntary unit operations for such lands.

 

4.      The secondary recovery project by the injection of fluids into the "J" Sand reservoir of the Pow-Wow ("J" Sand) Unit Area, as presented by the Applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject into said reservoir through injection wells in such quantities as shall be reasonably determined by the operator to best achieve the maximum recovery of oil without waste.

 

5.      In the event that it becomes necessary in the future to convert additional producing wells to input wells; to plug and abandon certain wells in the Unit Area, or to drill additional producing or input wells as dictated by development in the course of the operations, the Unit Operator is authorized to make such changes in the operation of the project as may be required to facilitate the efficient development thereof.

 

6.      All injection wells shall be approved by the Director in accordance with the rules and regulations of the Commission.

 

IT IS FURTHER ORDERED, that within six (6) months from the date of this order, and upon affidavit submitted to the Director of the Commission by the unit operator, and stating that the approval of the required percentage of interest for the plan of unit operations has been obtained, the plan for unit operations shall become effective. In the event such approval has not been obtained within this period of time, or an extended period of time as provided in the statute, the approval of the Commission for the plan of unit operations shall become ineffective and this order shall be revoked.

 

IT IS FURTHER ORDERED, that the provisions established by Order No. 220-1 for drilling and spacing units and permitted well locations are rescinded for the Pow-Wow ("J" Sand) Unit Area herein described.

 

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith as all parties have agreed to accept the verbal order of the Commission.

 

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.

 

ENTERED this 24th day of November, 1989, as of November 20, 1989.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By 

Dennis R. Bicknell, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado  80203