BEFORE THE
OF THE STATE OF
IN THE MATTER OF PROMULGATION AND ) CAUSE NO. 296
ESTABLISHMENT
OF FIELD RULES TO )
GOVERN OPERATIONS IN THE SLICK ROCK ) ORDER
NO. 296-2
FIELD,
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission
at 9:00 a.m. on July 23, 2007, in Suite 801, The Chancery Building, 1120
Lincoln Street, Denver, Colorado, for an order to vacate Order No. 296-1, which
established a 640-acre drilling and spacing unit for Section 8, Township 43
North, Range 17 West, 6th P.M., for the production of gas and
associated hydrocarbons from the Lower Ismay Formation, and place the lands
under the provisions of Rule 318. of the Rules and Regulations of the
Commission.
FINDINGS
The
Commission finds as follows:
1. EnCana Oil & Gas (USA) Inc.
("EnCana"), 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
5. On
6. On May 23,
2007, EnCana, by its attorney, filed with the Commission a written request to
approve the application based on the merits of the verified application and the
supporting exhibits.
7. Testimony
submitted in support of the application showed that EnCana is the majority
leasehold owner in the application lands, and that EnCana has drilled the first
horizontal well in the area in an attempt to test a new concept for the
area. Additional testimony indicated
that if production is found, EnCana will form a Communitization Agreement with
the approval of the Bureau of Land Management.
8. Testimony
and exhibits submitted in support of the application showed that there is presently no
producing well in the application lands, with the only well ever drilled in the
application lands, the Slick Rock Federal #1 Well plugged and abandoned in
1982.
9. Testimony
and exhibits submitted in support of the application showed that based on core
analysis and open-hole logging porosity, one well cannot efficiently recover
reserves in a 640-acre area. Additional
testimony and
exhibits showed that vacation of Order No. 296-1 will not result in waste or
the drilling of unnecessary wells and will not affect correlative rights of any
parties as there has been no production in the application lands for over 24
years.
10. The
above-referenced testimony and exhibits show that the proposed vacation of the
order will allow more efficient reservoir drainage, will prevent waste, will
assure a greater ultimate recovery of gas, and will not violate correlative
rights.
11. EnCana Oil
& Gas (USA) Inc. 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
based on the Hearing Officer review of the application under Rule 511.b., the Commission should
enter an order to vacate Order No. 296-1 and place the lands under the
provisions of Rule 318. of the Rules and Regulations of the Commission.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Order No. 296-1 which established a 640-acre drilling and spacing unit for Section 8, Township 43 North, Range 17 West, 6th P.M., is hereby vacated and the lands are now hereby subject to the provisions of Rule 318. of the Rules and Regulations of the Commission.
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.
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.
OIL
AND GAS CONSERVATION COMMISSION
OF THE STATE OF
By____________________________________
Patricia C. Beaver, Secretary
Dated at
August
15, 2007