IN THE MATTER OF THE PROMULGATION AND
CAUSE NOS. 232, 407
ESTABLISHMENT OF FIELD RULES TO GOVERN
250 and 499
OPERATIONS IN THE WATTENBERG GAS SPACED
AREA, THE CODELL- NIOBRARA SPACED AREA, THE
ORDER NOS. 232-211, 407-270
SPINDLE FIELD, AND THE WATTENBERG FIELD,
250-42 and 499-57
WELD COUNTY, COLORADO
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m. on March 31,
1998, 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 HS Resources, Inc., for an order to allow the Sugihara No. 43-21
Well located 2,120 feet FSL and 520 feet FEL in the NE¼ SE¼ of Section 21,
Township 2 North, Range 66 West, 6th P.M., currently producing from the Sussex
Formation, to be recompleted to the Dakota Formation and to the "J" Sand
Formation as a third well for production of gas and associated hydrocarbons for
the 320-acre drilling and spacing unit consisting of the S½ of said Section 21.
In the future, the Applicant may also recomplete this well to the Codell and
Niobrara Formations for an 80-acre drilling and spacing unit and commingle all
production.
FINDINGS
The Commission finds as follows:
1. HS Resources, Inc. 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. In Order No. 250-11, the Commission established 80-acre drilling and spacing
units for production of oil from the Sussex and Shannon Formations, with the
permitted well to be located in the center of the NE¼ and SW¼ of each quarter
section, with a tolerance of 200 feet in any direction. Order No. 250-12 allowed
additional wells to be drilled and approved downhole commingling.
5. In Order No. 499-1, the Commission established 320-acre drilling and spacing
units for the production of oil, gas and associated hydrocarbons from the Dakota
Formation in certain lands, with the 320-acre drilling and spacing units to be
identical to those previously established for the "J" Sand Formation under Cause
No. 232, with the permitted wells to be located in the NW¼ and the SE¼ of the
section and no closer than 990 feet from the boundaries of the quarter section,
including Section 21, Township 2 North, Range 66 West 6th P.M. In Order Nos.
499-15, 232-89, 407-125, 493-22 and 496-3, the Commission allowed the
commingling of production from the Dakota, "J" Sand, Codell, Niobrara, Sussex
and Shannon Formations.
6. In Cause No. 232, the Commission established 320-acre drilling and spacing
units for the production of gas from the "J" Sand Formation in the Wattenberg
Field with one well allowed for each unit to be located in the NE¼ and SW¼ and
no closer than 990 feet to the boundaries of the quarter section. On August 21,
1979, the Commission issued Order No. 232-20 which allowed a second well to be
drilled on each 320-acre unit, including Section 21, Township 2 North, Range 66
West 6th P.M.
7. 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 from the Codell and Niobrara Formations,
including Section 21, Township 2 North, Range 66 West 6th P.M.
8. In Order Nos. 407-66 and 232-47, the Commission, among other things, allowed
recompletion to shallower zones, the downhole commingling of production from the
"J" Sand Formation with production from the Codell and Niobrara Formations, and
approval of an allocation method for commingled production.
9. The Sugihara No. 43-21 Well was drilled for production from the Sussex
Formation at a legal location for the Codell and Niobrara Formations.
10. Evidence submitted by the Applicant and reviewed by the Hearing Officer
indicates that the original gas in place in the “J” Sand Formation in the S½ of
Section 21, Township 2 North, Range 66 West is 5.8 BCF, and that the estimated
ultimate recovery from the two existing “J” Sand Formation wells will be 1.8 BCF
which equates to a 31% recovery factor for the drilling and spacing unit.
11. That in order to prevent waste and protect the correlative rights, an
additional well is necessary to recover remaining "J" Sand Formation reserves.
12. The applicant agrees to request Commission approval not before six (6)
months from the date production is obtained from the “J” Sand Formation to
recomplete the well to the Dakota Formation at an exception location and to the
Codell or Niobrara Formations and commingle production from these formations
with production from the “J” Sand Formation. A bottom-hole pressure of the “J”
Sand Formation will not be obtained for this well
13. The Applicant agreed to be bound by oral order of the Commission.
14. 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.
232-89, 407-125, and 499-15 to allow the Sugihara No. 43-21 Well located 2,120
feet FSL and 520 feet FEL in the NE¼ SE¼ of Section 21, Township 2 North, Range
66 West, 6th P.M., currently producing from the Sussex Formation, to be
recompleted to the Dakota Formation and to the "J" Sand Formation as a third
well for production of gas and associated hydrocarbons for the 320-acre drilling
and spacing unit consisting of the S½ of said Section 21. In the future, the
Applicant may also recomplete this well to the Codell and Niobrara Formations
for an 80-acre drilling and spacing unit and commingle all production.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Order Nos. 232-89, 407-125 and 499-15 are
hereby amended to allow the Sugihara No. 43-21 Well located 2,120 feet FSL and
520 feet FEL in the NE¼ SE¼ of Section 21, Township 2 North, Range 66 West, 6th
P.M., currently producing from the Sussex Formation, to be recompleted to the
Dakota Formation and to the "J" Sand Formation as a third well for production of
gas and associated hydrocarbons for the 320-acre drilling and spacing unit
consisting of the S½ of said Section 21. In the future, the Applicant may also
recomplete this well to the Codell and Niobrara Formations for an 80-acre
drilling and spacing unit and commingle all production.
IT IS FURTHER ORDERED, that the Applicant shall request Commission approval not
before approximately six (6) months from the date production is obtained from
the "J" Sand Formation to recomplete the well to the Dakota Formation at an
exception location and to the Codell or Niobrara Formations and commingle
production from these formations 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 any and/or all of the above
orders.
ENTERED this 9th day of April, 1998, as of March 31, 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 April 9, 1998
(232-211)