|IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF THE COLOMEADOW FARMS UNIT AND FIELD RULES IN THE HOMBRE FIELD, ADAMS AND ARAPAHOE COUNTIES,||Cause No. 238 Order No. 238-6|
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on June 16, 1989, at 8:30 A.M., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado after giving Notice of Hearing as required by law on the verified application of Quinoco Petroleum, Inc. for an order approving a certain Unit Operating Agreement for the Colomeadow Farms Unit Area, providing for involuntary unit operations of the reservoir consisting of the "J" Sand formation underlying certain lands in the Colomeadow Farms Unit Area contained in the Hombre Field, Adams and Arapahoe Counties, Colorado.
The Commission finds as follows:
1. Quinoco Petroleum, 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. The Director as Hearing Officer heard the application and found it meets the requirements established, that a revised agreement has been submitted to those eligible to participate in the unit and that the required approval has not been obtained, and recommends the application be approved.
5. The"J" Sand formation of Cretaceous age was encountered between the depths of 6894 feet and 6950 feet in well Colomeadow Farms No. 5 located in the NW/4 SW/4 Section 32, Township 3 South, Range 61 West, 6th P.M., Adams County, Colorado. Said "J" Sand, as so encountered, is a common source of supply and has been defined and determined by drilling, to be productive underlying the following described lands in Adams County, Colorado to-wit: Township 3 South, Range 61 West, 6th P.M. Section 31: Lot 3, Lot 4, E/2 W/2, SE/4 Containing 385.68 acres, more or less Section 32: W/2 Containing 320 acres, more or less for a total of 705.68 acres, more or less.
6. The terms and conditions provided by the Unit Agreement and Unit Operating Agreement meet the requirements of the statute in accordance with 34-60-118 C.R.S., as amended, and are just and reasonable to all interests contained within said unit area. The plan for unit operations as presented by the Applicant, providing for a secondary recovery program by the injection of fluids into the "J" Sand reservoir underlying the Colomeadow Farms ("J" Sand) Unit Area, as described herein is necessary to increase the ultimate recovery of oil and gas and the value of the estimated additional recovery of oil and gas exceeds the estimated additional cost incident to conducting such operations.
7. Testimony presented at the Administrative hearing indicated that said Unit Agreement and Unit Operating Agreement have not been approved in writing by more than 80% of the working interest owners and owners of the production and proceeds attributable to royalty, overriding royalty and production payments.
8. All rules established by Order No. 238-1 for drilling and spacing units and permitted well locations should be rescinded for the Colomeadow Farms ("J" Sand) Unit Area herein described.
9. The approval of the unit plan of operations should not become effective unless, or until the Applicant demonstrates, by affidavit submitted to the Director of the Commission, that persons owning the required percentages of interest in the unit area approve said agreement.
NOW, THEREFORE, IT IS ORDERED, that:
1. The Unit Agreement and Unit Operating Agreement covering lands in the Colomeadow Farms ("J" Sand) Unit Area, which agreements are attached to, and made a part of the original order of this Commission on file in the office of the Commission, are approved as being in the public interest for Conservation.
2. The "J" Sand reservoir, common source of supply, underlies the following lands in Adams County, Colorado, to-wit: Township 3 South, Range 61 West, 6th P.M. Section 31: Lot 3, Lot 4, E/2 W/2, SE/4 Containing 385.68 acres, more or less Section 32: W/2 Containing 320 acres, more or less for a total of 705.68 acres, more or less.
3. The provisions contained in said Unit Agreement and Unit Operating Agreement as they pertain to 34-60-118 of the Oil and Gas Conservation Act are just and reasonable, and are incorporated herein as the Commission's plan of involuntary unit operations for such lands.
4. The secondary recovery project by the injection of fluids into the "J" Sand reservoir of the Colomeadow Farms ("J" Sand) Unit Area, as presented by the Applicant, is hereby approved as being necessary to increase the ultimate recovery from said reservoir, and the operator is authorized to inject into said reservoir through injection wells in such quantities as shall be reasonably determined by the operator to best achieve the maximum recovery of oil without waste.
5. In the event that it becomes necessary in the future to convert additional producing wells to input wells; to plug and abandon certain wells in the Unit Area, or to drill additional producing or input wells as dictated by development in the course of the operations, the Unit Operator is authorized to make such changes in the operation of the project as may be required to facilitate the efficient development thereof.
6. All injection wells shall be approved by the Director in accordance with the rules and regulations of the Commission.
IT IS FURTHER ORDERED, that within six (6) months from the date of this order, and upon affidavit submitted to the Director of the Commission by the unit operator, and stating that the approval of the required percentage of interest for the plan of unit operations has been obtained, the plan for unit operations shall become effective. In the event such approval has not been obtained within this period of time, or an extended period of time as provided in the statute, the approval of the Commission for the plan of unit operations shall become ineffective and this order shall be revoked. IT IS FURTHER ORDERED, that the provisions established by Order No. 238-1 for drilling and spacing unit sand permitted well locations are rescinded for the Colomeadow Farms("J" Sand)Unit Are herein described.
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IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith as all parties have agreed to accept the verbal order of the Commission.
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 June 1989 as of June 16, 1989.
THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By Dennis R. Bicknell, Secretary