IN THE MATTER OF THE PROMULGATION AND
CAUSE NO. 287
ESTABLISHMENT OF FIELD RULES TO GOVERN
OPERATIONS IN THE FOUNDATION CREEK FIELD,
ORDER NO. 287-5
RIO BLANCO AND GARFIELD COUNTIES, COLORADO
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m. on April 23,
2001, in Suite 801, the Chancery Building, 1120 Lincoln Street, Denver,
Colorado, after giving Notice of hearing as required by law, on the application
of Coastal Oil and Gas Corporation for an order allowing an additional well to
be completed and produced for gas and associated hydrocarbons from the Mancos
“B” Formation for each of the designated drilling and spacing units in the
Foundation Creek Field.
FINDINGS
The Commission finds as follows:
1. Coastal Oil and Gas Corporation (“Coastal”), 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 October 18, 1976, the Commission entered Order No. 287-3 which established
160-acre drilling and spacing units for the production of gas and associated
hydrocarbons from the Mancos “B” Formation on certain lands in Township 4 South,
Range 102 West, 6th P.M., with the permitted well to be located no closer than
600 feet from the boundary of the quarter section. In addition, certain wells
were designated as the permitted wells for the drilling and spacing units on
which they were located. On September 21, 1977, the Commission entered Order No.
287-4 which amended Order No. 287-3 to include additional lands in Townships 4
and 5 South, Range 102 West, 6th P.M. under the provisions of the Foundation
Creek Field. Certain wells were also designated as the permitted wells for the
drilling and spacing units on which they are located.
5. On March 7, 2001, Coastal filed with the Commission a verified application
for an order allowing an additional well to be completed and produced for gas
and associated hydrocarbons from the Mancos “B” Formation for each of the
designated drilling and spacing units listed below. Coastal requests that wach
of the wells designated in Order Nos. 287-3 and 287-4 as permitted wells for
certain units remain so designated. In addition, Coastal requests that any
additional well drilled for production from the Mancos “B” Formation be located
no closer than 600 feet from the boundary of the drilling and spacing unit and
not less than 900 feet from the other well in the unit. Further, the Director
should be given the authority to grant exception locations for topographic
reasons without notice or hearing.
Township 4 South, Range 102 West, 6th P.M.
Section 25: All
Section 26: E½
Section 35: All
Section 36: E½
Township 5 South, Range 102 West, 6th P.M.
Section 2: All
6. Testimony and exhibits presented at the administrative hearing showed the
mineral and surface ownership in the application area is approximately 50%
federal and 50% fee, with Coastal owning 100% of the working interest.
7. Testimony and exhibits presented at the administrative hearing showed the
sand in the Mancos “B” Formation is continuous in the application area, however,
due to variations in porosity and permeability the wells with the most net sand
pay are not necessarily the best producers.
8. Testimony and exhibits presented at the administrative hearing showed the
average well has produced 260 MMCF of gas with an average estimated ultimate
recovery of 350 MMCF. The average drainage area of a well is 50 acres with an
average current production of 30 MCFD. Due to new technology, additional wells
are expected to produce more gas and drain a larger area.
9. Testimony and exhibits presented at the administrative hearing showed
drilling of an additional well per 160-acre drilling and spacing unit in the
application lands will not adversely affect correlative rights, will be economic
and will prevent waste.
10. No protests to the application were filed, however, Mr. David Robertson of
Twin Buttes Ranch expressed concerns to COGCC staff about erosion caused by
additional drilling locations on unstable soil. At the administrative hearing,
Coastal responded to this concern by testifying that all drilling locations were
chosen after consultation with the landowner.
11. At the time of the administrative hearing, Coastal agreed to be bound by
oral order of the Commission.
12. Based on the facts stated in the verified application, having received no
protests and having been heard by the Hearing Officer who recommends approval,
the Commission should enter an order allowing an additional well to be completed
and produced for gas and associated hydrocarbons from the Mancos “B” Formation
for each of the designated drilling and spacing units in the Foundation Creek
Field.
ORDER
NOW, THEREFORE IT IS ORDERED, that an additional well is hereby granted to be
drilled and completed and produced for gas and associated hydrocarbons from the
Mancos “B” Formation for each of the designated drilling and spacing units
listed below.
Township 4 South, Range 102 West, 6th P.M.
Section 25: All
Section 26: E½
Section 35: All
Section 36: E½
Township 5 South, Range 102 West, 6th P.M.
Section 2: All
IT IS FURTHER ORDERED, that each of the wells designated in Order Nos. 287-3 and
287-4 as permitted wells for certain units shall remain so designated.
IT IS FURTHER ORDERED, that any additional well drilled for production from the
Mancos “B” Formation shall be located no closer than 600 feet from the boundary
of the drilling and spacing unit and not less than 900 feet from any other well
in the unit.
IT IS FURTHER ORDERED, that the Director shall be given the authority to grant
exception locations for topographic reasons without notice or hearing.
IT IS FURTHER ORDERED, that areas of unstable slopes and soils shall be avoided
whenever possible when constructing drilling locations.
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 2nd day of May 2001, as of April 23, 2001.
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 May 2, 2001
(287-5)