IN THE MATTER OF THE PROMULGATION AND )
ESTABLISHMENT OF FIELD RULES TO GOVERN ) CAUSE NOS. 232 and 499
OPERATING IN THE WATTENBERG GAS )
SPACED AREA AND THE WATTENBERG FIELD, ) ORDER NOS. 232-235
WELD COUNTY, COLORADO
) 499-73
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on July 15, 2002 at 10 a.m.
in Suite 801, 1120 Lincoln Street, Denver, Colorado for an order to amend Order
No. 232-3 and Order No. 499-15 to allow the 320-acre drilling and spacing unit
consisting of the N½ of Section 9, Township 4 North, Range 63 West, 6th P.M. to
be segregated into 160-acre drilling and spacing units consisting of the NE¼ and
the NW¼ of Section 9, for the production of oil, gas and associated hydrocarbons
from the “J” Sand and Dakota Formations.
FINDINGS
The Commission finds as follows:
1. United States Exploration, Inc. (“USX”), 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. On November 17, 1970, the Commission issued Order No. 232-3 which established
320-acre drilling and spacing units for the production of gas and associated
hydrocarbons from the “J” Sand Formation in the Wattenberg Gas Spaced Area with
one well allowed for each unit to be located in the NE¼ and SW¼ of each
governmental section and to be located no closer than 990 feet to the boundaries
of the quarter section upon which it is located. On August 21, 1979, the
Commission issued Order No. 232-23 which allowed a second well to be drilled on
each 320-acre unit including the N½ of Section 9, Township 4 North, Range 63
West, 6th P.M., which has been designated as a unit. On November 6, 1992, the
Commission issued Order No. 499-15 which established 320-acre drilling and
spacing units for the production of gas and associated hydrocarbons from the
Dakota Formation for certain lands and allowed a second well to be drilled on
each 320-acre unit including the N½ of Section 9, Township 4 North, Range 63
West, 6th P.M., which has been designated as a unit.
5. On March 11, 2002, United States Exploration, Inc. (“USX”), by its attorney,
filed with the Commission a verified application for an order to amend Order No.
232-3 and Order No. 499-15 to allow the 320-acre drilling and spacing unit
consisting of the N½ of Section 9, Township 4 North, Range 63 West, 6th P.M. to
be segregated into 160-acre drilling and spacing units consisting of the NE¼ and
the NW¼ of Section 9, for the production of oil, gas and associated hydrocarbons
from the “J” Sand and Dakota Formations underlying said lands. No wells have
been drilled and completed in the N½ of Section 9, Township 4 North, Range 63
West, 6th P.M. for production from the “J” Sand or Dakota Formations.
6. Testimony and exhibits presented at the administrative hearing showed the
proposed well in Section 9 is expected to be similar to the previously drilled
“J” Sand wells near the application lands which have drainage areas ranging from
20 acres to 57 acres. Further testimony indicated that there are no Dakota wells
near the application lands but a test in the Dakota Formation on a nearby well
indicates drainage between 40 acres and 60 acres from the Dakota Formation.
7. Testimony and exhibits presented at the administrative hearing showed offers
to purchase the mineral interests or to farmout the mineral interests from the
owners in the NW¼ of Section 9 were made by USX in writing, followed up by
telephone conversations. No response has been made to the offers. Further
testimony showed that USX initially intended to drill its well in the NW¼ of
Section 9 but has now moved the well into the NE¼ of Section 9 where USX has the
opportunity to earn the lease from mineral owner RME Land Corporation. No
protests to the application have been filed with the Commission or the
applicant.
8. At the time of the administrative hearing, United States Exploration, Inc.
agrees to be bound by an oral order of the Commission.
9. Based on the facts stated in the verified application, having received no
protests and having been heard by the Hearing Officer who recommended approval,
the Commission should approve an order to amend Order No. 232-3 and Order No.
499-15 to allow the 320-acre drilling and spacing unit consisting of the N½ of
Section 9, Township 4 North, Range 63 West, 6th P.M. to be segregated into
160-acre drilling and spacing units consisting of the NE¼ and the NW¼ of Section
9, for the production of oil, gas and associated hydrocarbons from the “J” Sand
and Dakota Formations.
ORDER
NOW, THEREFORE IT IS ORDERED, that Order No. 232-3 and Order No. 499-15 are
hereby amended to allow the 320-acre drilling and spacing unit consisting of the
N½ of Section 9, Township 4 North, Range 63 West, 6th P.M. to be segregated into
160-acre drilling and spacing units consisting of the NE¼ and the NW¼ of Section
9, for the production of oil, gas and associated hydrocarbons from the “J” Sand
and Dakota Formations.
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 19th day of July, 2002, as of July 15, 2002.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
Signed By Patricia C. Beaver, Secretary, Dated at Suite 801, 1120 Lincoln
Street, Denver, Colorado 80203, July 17, 2002
(#232-235) (#499-73)