BEFORE THE OIL AND GAS CONSERVATION
COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NOS. 232 & 407
ORDER NOS. 232-268 & 407-392
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REPORT OF COMMISSION
FINDINGS
The Commission finds as follows:
1. EnCana Oil and Gas (USA), Inc., (“EnCana” or “Applicant”), 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 pursuant to the Oil and Gas Conservation Act.
4. On October 19, 1981, the Commission issued Order No. 232-23, which among other things, amended Order No. 232-20 to establish additional 320-acre drilling and spacing units and allow a second well to be drilled for certain lands, including Section 25, Township 5 North, Range 64 West, 6th P.M., for the production of gas and associated hydrocarbons from the “J” Sand Formation.
5. On November 21, 1983, the Commission issued Order No. 407-1, which amongother things, established 80-acre drilling and spacing units for certain lands including Section 25, Township 5 North, Range 64 West, 6th P.M., for production of gas and associated hydrocarbons from the Codell Formation.
6. On April 7, 1992, amended August 20, 1993, the Commission issued Order No. 407-87, which among other things, established 80-acre drilling and spacing units for certain lands, including Section 25, Township 5 North, Range 64 West, 6th P.M., for production of gas and associated hydrocarbons from the Niobrara Formation.
7. On April 27, 1998, the Commission adopted Rule 318A., which among other things, allowed certain drilling locations to be utilized to drill or twin a well, deepen a well or recomplete a well and to commingle any or all of the Cretaceous Age Formations from the base of the Dakota Formation to the surface. Section 25, Township 5 North, Range 64 West, 6th P.M. is subject to this Rule.
8. On December 23, 2010, EnCana, by its attorneys, filed with the Commission a verified application (the “Application”) for an order to establish an approximate 160-acre drilling and spacing unit for the NE¼ of Section 25, Township 5 North, Range 64 West, 6th P.M, (the “Application Lands”) for the production of oil, gas and associated hydrocarbons from the Codell, Niobrara, and “J” Sand Formations.
9. On March 22, 2011, EnCana, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits as is provided for by Rule 511. Sworn written testimony and exhibits were submitted in support of the Application.
10. Testimony and exhibits submitted in support of the Application by Jack Croom, Land Negotiator for EnCana, showed that EnCana is the majority leasehold owner of the Application Lands.
11. Testimony and exhibits submitted in support of the Application by Paul McKay, Petroleum Geologist for EnCana, showed that the “J” Sand Formation is a large marine sand bar which is predicted to be underlying the Application Lands. Additional testimony indicates that the total thickness of the “J” Sand Formation is expected to range between 120 to 140 feet.
12. Testimony and exhibits submitted in support of the Application by Kyle Beam, Reservoir Engineer for EnCana, showed that the “J” Sand Formation underlying the Application Lands is economic to drill and that commingling that production with the Codell and Niobrara Formations makes the project attractive.
13. The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.
14. EnCana agreed to be bound by oral order of the Commission.
15. Based on the facts stated in the verified Application, having received no protests, and based on the Hearing Officer review of the Application under Rule 511., the Commission should enter an order establishing an approximate 160-acre drilling and spacing unit for the NE¼ of Section 25, Township 5 North, Range 64 West, 6th P.M, for the production of oil, gas and associated hydrocarbons from the Codell, Niobrara, and “J” Sand Formations.
ORDER
NOW, THEREFORE IT IS ORDERED, that an approximate 160-acre drilling and spacing unit is hereby established for the below-listed lands, for the production to oil, gas and associated hydrocarbons from the Codell, Niobrara, and “J” Sand Formations:
Township 5 North, Range 64 West, 6th P.M.
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Section 25: |
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IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective immediately.
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.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this Order to be final agency action for purposes of judicial review within 30 days after the date this Order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.
ENTERED this 15th day of April, 2011, as of April 4, 2011.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert A. Willis, Acting Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
April 15, 2011