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 AND THE CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO

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CAUSE NOS. 232 and 407

 

ORDER NOS. 232-184 and 407-244

 

REPORT OF THE COMMISSION

 

This cause same in for hearing before the Commission at 8:30 a.m. on January 7, 1988, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of North American Resources company (“NARCO”) for an order to allow the Elmquist No. 11-23 Well to be drilled at an exception location 660 feet FNL and 660 feet FWL in the NW¼ NW¼ of Section 23, Township 2 North, Range 68 West, 6th P.M., as the third well for production from the “J” Sand Formation for the 320-arce drilling and spacing unit consisting of the W½ of said Section 23. In the future, the Applicant may wish to recomplete the well to the Codell and Niobrara Formation and commingle production form the “J” Sand Formation with the Codell and Niobrara Formations for the 80-arce drilling and spacing unit consisting of the W½NW¼ of said Section 23.

 

FINDINGS

 

The Commission finds as follows:

 

1.      North American Resources Company (“NARCO”), as applicant herein, is a 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.      In Cause No. 232, the Commission established 320-acre drilling and spacing units with said units to consist of the N½ and S½ or the E½ and W½ of a governmental section for production for the “J” Sand Formation and with the authorized well to be located in the NE¼ and the SW¼ of each section no closer than 990 feet from the boundaries of the quarter section. By Order No. 232-20, the Commission authorized the drilling of a second well for each 320-acre drilling and spacing unit with the additional well to be located no closer than 990 feet from the boundaries of the quarter section upon which it is located including Section 23, Township 2 North, Range 68 West, 6th P.M.

 

5. In Order No. 407-1, the Commission established 80-acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation. Wells shall be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction. In Order Nos. 407-10 and 407-13, the Commission amended Order No. 407-1 to include production from the Niobrara Formation in certain lands and to allow the downhole commingling of production form the Codell and Niobrara Formations including Section 23, Township 2 North, Range 68 West, 6th P.M.

 

6. Order Nos. 407-66 and 232-47 issued April 16,1991, among other things, allowed the recompletion, downhole commingling an approval of allocation methods for production from the “J” Sand, Codell, and Niobrara Formations.

 

7.  Testimony and evidence was presented that average gas recovery in the nine (9) section areas surrounding the proposed additional well averages twenty- two percent (22%) of the original gas in place with four (4) wells per 160-acre drilling and spacing unit.

 

8.   That in order to prevent waste and protect the correlative rights additional wells are necessary to recover remaining “J” Sand Formation reserves.

 

9.   NARCO testified that the request to recomplete the proposed well to the Codell and Niobrara Formations would not be requested for approximately twelve (12) months from the date production form the “J” Sand Formation is obtained.

 

10.   At the time of the administrative hearing, the Applicant agreed to be bound by oral order of the Commission

 

11.   Based on the facts stated in the application, having received no protests and having been heard by the Hearing Officer who recommends approval of the application, an order of the Commission should be entered amending Order Nos. 407-185 and 232-140, allowing the Elmquist No. 11-23 Well to be drilled at an exception location 660 feet FNL and 660 feet FWL in the NW¼NW¼ of Section 23, Township 2 North, Range 68 West, 6th P.M., as the third well for production form the “J” Sand Formation for the 320-acres drilling and spacing unit consisting of the W½ of said Section 23. In the Future, the Applicant may wish to recomplete the well to the Codell and Niobrara Formations and commingle production form the “J” Sand Formation with the Codell and Niobrara Formations for the 80-acre drilling and spacing unit consisting of the W½NW¼ of said Section 23.

 

ORDER

 

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-185 and 232-140 are hereby amended to allow the drilling of the Elmquist No. 11-23 Well at an exception location 660 feet FNL and 660 feet FWL in the NW¼ NW¼ of Section 23, Township 2 North, Range 68 West, 6th P.M., as the third well for production from the “J” Sand Formation for the 320-acre drilling and spacing unit consisting of the W½ of said Section 23.

 

IT IS FURTHER ORDERED, that the Applicant shall request Commission approval not before approximately twelve (12) months from the date production is obtained is obtained from the “J” Sand Formation to recompolete the well to the Codell and Niobrara Formations and Commingle production form these formations for the 80-acre drilling and spacing unit consisting of the W½ NW¼ of Section 23 with production from the “J” Sand Formation.

 

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 right, after notice and hearing, to alter, amend or repeal an and/or all of the above orders.

 

 

ENTERED this 29th day of January, 1998, as of January 7, 1998.

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By

Patricia C. Beaver, Secretary

 

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado  80203

January 29, 1998