BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE ESTABLISHMENT OF THE SOONER CRETACEOUS ‘D’ [sic] SAND UNIT DEVELOPMENT AND OPERATION IN THE SOONER FIELD, COLORADO

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CAUSE NO. 230

 

ORDER NO. 230-11

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission on August 15, 1988 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 application of Diversified Operating Company for an order approving a certain Unit Agreement and Unit Operating Agreement for the Sooner Cretaceous D' Sand Unit Area including secondary recovery by injection of water into said D' Sand providing for involuntary unit operations of the reservoir underlying certain lands in the Sooner Unit Area, Weld County, Colorado.

 

FINDINGS

 

The Commission finds as follows:

 

1.      Diversified 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.      A protest to the Unit Operating Agreement was filed on behalf of the Fiscus Mineral owners by their attorney.

 

5.      On August 12, 1988, the Director as Hearing Officer, conducted an administrative hearing with the protestant's counsel being expected to attend as well as the applicant to gain an understanding of the protest and receive testimony on the Unit Agreement and Unit Operating Agreement.  Counsel for the protestants did not attend the administrative hearing.

 

6.      The Hearing Officer determined that the terms and conditions provided by the Unit Agreement and Unit operating Agreement meet the requirements of the statute 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 the conduct of operations to recover oil and gas is necessary to increase the ultimate recovery and the value of the estimated additional cost incident to conducting such operations, and recommended to the Commission that the Unit Agreement and Unit Operating Agreement be approved.

 

7.      At the Commission hearing on August 15, 1988, Counsel for the protestants, Fiscus, was not present.  The Fiscus's were given an opportunity to make a protest against the attribution given to several dry and abandoned wells.  Geologic testimony indicated the ‘D' [sic] Sand reservoir underlies the tracts containing the abandoned wells.  Further testimony indicated that the total attribution to all abandoned wells in the proposed unit was less than one (1) percent of the total, and that these wells should be included in the unit). [sic]

 

8.      The plan for unit operations has not been approved by those persons required to pay at least eighty percent of the costs of the unit operations, nor by the owners of eighty percent of the production or proceeds.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED, that:

 

1.      The Unit Agreement and Unit Operating Agreement governing lands in the Sooner Cretaceous ‘D' [sic] Sand and Splay 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 and subject to Number 7 herein above.

 

2.      The Cretaceous ‘D' [sic] Sand and Splay Reservoir, common source of supply, underlies the following described lands in Weld County, Colorado, to-wit:

 

Township 8 North, Range 58 West, 6th P.M.

 

Section 16:

SW/SE, S1/2 SW1/4

 

Section 17:

SE1/4

 

Section 20:

E1/2 NE1/4

 

Section 21:

All

 

Section 28:

NE1/4, E1/2 NW1/4, E1/2 SW1/4, W1/2 SE1/4,                  NE1/4 SW1/4

 

containing 1440 acres, more or less.

 

3.      The provisions contained in said Unit Agreement and Unit Operating Agreement as they pertain to C.R.S. 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 water into the ‘D' Sand reservoir of the Sooner (‘D' Sand) Unit Area, as presented by applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject water 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 with our 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 well [sic] as indicated by developments in the course of the operations of the waterflood, 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 well [sic] shall be approved by the Director in accordance with the rules and regulations of the Commission prior to any injection occurring.

 

7.      No order of the Commission providing for unit operations shall become effective unless the plan for unit operations prescribed by the Commission has been approved in writing by those persons who, under the Commission's order, will be required to pay at least eighty percent of the costs of the unit operation, and also by the owners of at least eighty percent of the production of proceeds thereof that will be credited to interests which are free of cost, such as royalties, overriding royalties, and production payments, and the Commission has made a finding, either in the order providing for unit operations or in a supplemental order, that the plan for unit operations has been so approved.  If the plan for unit operations has not been so approved at the time the order providing for unit operations is made, the Commission shall upon application and notice hold such supplemental hearings as may be required to determine if and when the plan for unit operations has been approved.  If the persons owning the required percentage of interest in the unit area do not approve the plan for unit operations within a period of six months from the date on which the order providing for unit operations is made, such order shall be ineffective and shall be revoked by the Commission unless for good cause shown the Commission extends said time.

 

IT IS FURTHER ORDERED, that the spacing provision as established by Order No. 230-9 as they pertain to the lands in the Sooner Field described herein above, shall be rescinded subject to Number 7 herein above.

 

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

 

IT IS FURTHER ORDERED, that the Commission expressly reserves its rights, after notice and hearing, to alter, amend or repeal ant and/or all of the above orders.

 

ENTERED this 25th day August 1988, as of August 15, 1988.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By 

Dennis R. Bicknell, Secretary