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 LEFT HAND FIELD, KIOWA COUNTY, COLORADO

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CAUSE NO. 252

 

ORDER NO. 252-9

 

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission at 9:00 a.m. on March 25, 2010, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to modify the well location rules, particularly setbacks, pertaining to the previously established ten approximate 80-acre drilling and spacing units under Order No. 252-6 for certain lands in Sections 27, 28 and 34, Township 18 South, Range 47 West 6th P.M.

 

FINDINGS

 

The Commission finds as follows:

 

1.  Bayhorse Petroleum, LLC (Bayhorse), 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 September 25, 2009, the Commission issued Order No. 252-6, which among other things, established the below-listed ten approximate 80-acre drilling and spacing units, for the production of oil and associated hydrocarbons from the Marmaton Formation:

 

Township 18 South, Range 47 West, 6th P.M.

Section 27:      N SW, S SW             

Section 28:      N NW, S NW

                        W NE, E NE

                        N SE, S SE

Section 34:      N NW

                        S NW

 

That as to all future Marmaton Formation wells to be drilled within each drilling and spacing unit, the permitted well should be located downhole anywhere in the drilling and spacing unit but no closer than 600 feet from the boundaries of the unit without exception being granted by the Director of the Commission.  It is further provided that, in cases where the application lands abut or corner lands in which the Commission has not at the time of drilling permit application granted the right to drill 80-acre density Marmaton Formation wells, the permitted well should be located downhole no closer than 1120 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Commission.

 

That, except as previously authorized by order of the Commission, wells to be drilled under this application will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Director of the Commission.

 

5.  On February 3, 2010, Bayhorse, by its attorney, filed with the Commission a verified application for an order to modify the well location rules pertaining to the previously established ten approximately 80-acre drilling and spacing units under Order No. 252-6.

 

Bayhorse requests that the well location rules set forth under Order No. 252-6 be modified in that, as to all future Marmaton Formation wells to be drilled upon the drilling and spacing units, the permitted well should be located downhole anywhere in the drilling and spacing unit but no closer than 600 feet from the boundaries of the unit without exception being granted by the Director of the Commission. 

 

That, except as previously authorized by order of the Commission, wells to be drilled under this application will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Director of the Commission.

 

6.  On February 26, 2010, Bayhorse, by and through its attorney, filed with the Commission a written request to approve the application based on the merits of the verified application. 

 

7.  The above-referenced request showed that the granting of the application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of oil/gas, and will not violate correlative rights. The application will correct errors in the original application that were adopted in Order No. 252-6. The request also allows development on the lands to move forward in a more orderly manner because the setbacks contained in Order No. 252-6 require Bayhorse to get exception locations approved for most of the wells it plans to drill.

 

8.  Bayhorse agreed to be bound by oral order of this Commission.

 

9.  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 to modify the well location rules, particularly setbacks, pertaining to the previously established ten approximate 80-acre drilling and spacing units under Order No. 252-6 for certain lands in Sections 27, 28 and 34, Township 18 South, Range 47 West 6th P.M.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that an order is hereby granted to modify the well location rules pertaining to the previously established ten approximately 80-acre drilling and spacing units under Order No. 252-6.

 

IT IS FURTHER ORDERED, that the well location rules set forth under Order No. 252-6 be modified in that, as to all future Marmaton Formation wells to be drilled upon the drilling and spacing units, the permitted well should be located downhole anywhere in the drilling and spacing unit but no closer than 600 feet from the boundaries of the unit without exception being granted by the Director of the Commission. 

 

IT IS FURTHER ORDERED, that except as previously authorized by order of the Commission, wells to be drilled under this application will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Director 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.

 

                        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 thirty (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__________ day of April, 2010, as of March 25, 2010.

           

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Carol Harmon, Secretary

 

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

April 24, 2010