BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE WATTENBERG GAS SPACED AREA, ADAMS AND WELD COUNTIES, COLORADO

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CAUSE NO. 232

 

ORDER NO. 232-18

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission on November 20, 1978 at 9 a.m., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Wilbert E. Thoutt and Melvin E. Thoutt, for an order pooling all interests in the N½ Section 11, Township 4 North, Range 64 West, 6th P.M., for the development of the "J" Sand underlying said unit.  Briefs concerning this matter were submitted by the attorneys for the interested parties on December 11, 1978.

 

FINDINGS

 

The Commission finds as follows:

 

1.      Wilbert E. Thoutt and Melvin E. Thoutt, as applicants herein, are interested parties 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.      On February 16, 1971 the Commission issued its Order No. 232-1, which among other things, established 320-acre drilling and spacing units for the production of gas from the "J" Sand underlying the Wattenberg Area.  The units consist of the E½ and W½ or the N½ and S½ of a section according to the governmental survey thereof, and each operator shall designate the drilling unit upon which the permitted well is to be located.  Subsequent orders added lands to the spaced area.

 

5.      On May 20, 1974, the Commission approved an application for permit to drill a well for the production of gas from the "J" Sand at a location in accordance with the spacing, pattern for the Wattenberg Gas Spaced Area in the NE¼ Section 11, Township 4 North, Range 64 West, 6th P.M.  The N½ of said section was described as being the drilling unit.

 

6.      Applicants own a one-half undivided mineral interest in the NW¼ of said Section 11 and Amoco Production Company holds leases of all the oil and gas rights in said Section 11 except for applicant's undivided one-half interest in the NW¼.

 

7.      A Declaration of Unitization was executed by Amoco Production Company on October 18, 1974 pooling and combining leases and lands to form a unit consisting of the E½ of said Section 11.  Said Declaration was recorded for public notice on October 21, 1974 in the records of Weld County, Colorado.  Royalties have been allocated on the basis of said E½ being the designated unit.

 

8.      The designation of the N½ of said Section 11 on the applicant for permit to drill was a clerical error.  Testimony at the hearing and subsequent actions by Amoco Production Company clearly show that its intention was to designate the E½ of said Section 11 as the designated unit.

 

9.      Since the Declaration of Unitization was recorded on lands not owned by the applicants, the recording did not constitute notice to the applicants.  The permitted well in the NE¼ of said Section 11 was completed September 30, 1974 and shut-in royalties were paid by Amoco Production Company until production commenced on June 29, 1978.  However, it was not until the filing of the application herein on June 21, 1978 that applicants made any protest before the Commission regarding this matter.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED that the clerical error having been made by Amoco Production Company, but not adopted or acted upon in any way by the Commission, said clerical error may be, and has in fact been clarified and corrected by Amoco that the designated drilling unit is the E½ of Section 11, Township 4 North, Range 64 West, 6th P.M.  Accordingly, the application fails to state a claim upon which relief may be granted and is therefore dismissed.

 

However, even if the application stated a remediable claim, the passage of over four (4) years [sic] time between the drilling of the well and the request for relief makes the applicants guilty of laches and would bar their claim for relief.

 

ORDERED this 9th day of January, 1979.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By 

Frank J. Piro, Secretary