BEFORE THE OIL AND GAS CONSERVATION COMMISSION 

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION                                )   CAUSE NO. 315

AND ESTABLISHMENT OF FIELD RULES                                   )

TO GOVERN OPERATIONS IN THE VERNON                            )   ORDER NO. 315-12

FIELD, YUMA COUNTY, COLORADO                                          )

                                                                                                  

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission at 8:00 a.m. on July 15, 2008, in Ballroom B of the Brown Palace Hotel, 321 Seventeenth Street, Denver, Colorado, for an order to allow an exception to the permitted location in Order No. 315-3, for the drilling of the proposed Chapman 22-12 Well with a surface location of 2451 feet FSL and 651 feet FWL, in the NW¼ SW¼ of Section 22, Township 1 South, Range 44 West, 6th P.M., for the production of gas and associated hydrocarbons from the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.     Rosetta Resources, Inc., (“Rosetta”), 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 August 22, 1978, corrected November 20, 1978, the Commission issued Order No. 315-3, which among other things, established 160-acre drilling and spacing units for certain lands including Section 22, Township 1 South, Range 44 West 6th P.M., for the production of gas and associated hydrocarbons from the Niobrara Formation, with the permitted well to be located no closer than 900 feet from the boundaries of the quarter section upon which it is located.

 

5.     On March 19, 2008, Rosetta, by its attorneys, filed with the Commission a verified application for an order to allow the Chapman 22-12 Well to be located at an exception location 2451 feet FSL and 651 feet FWL in the NW¼ SW¼ of Section 22, Township 1 South, Range 44 West, 6th P.M., for the production of gas and associated hydrocarbons from the Niobrara Formation.  The proposed well is located approximately 651 feet from the western boundary of the unit line and approximately 197 feet from the northern boundary of the unit line.  Concurrently, Rosetta has filed an application seeking an order to allow a total of four wells to be drilled in the 160-acre drilling and spacing units in Sections 22 through 24, Township 1 South, Range 44 West, 6th P.M., having subsequently withdrawn Section 24 from consideration in its application.

                               

6.     On April 23, 2008, LeRoy E. Deterding filed a protest letter to the application, and on April 24, 2008, William T. Deterding filed a protest letter to the application.  The protestants objected to the proposed location of the well believing that it would drain gas from their property located in Section 21 to the west.  On April 30, 2008, a prehearing conference was held wherein the protestants participated by telephone.  During the prehearing conference it was determined that the protestants did not, and would not, provide any technical information or data that a ruling in favor of Rosetta will not protect correlative rights of the parties.  Further, the technical representatives from Rosetta explained the typical drainage patterns in the Niobrara Formation in that area and that the proposed location would not cause drainage of hydrocarbons from the protestants’ land in Section 21, Township 1 South, Range 44 West, 6th P.M.  The Hearing Officer found that there was no technical merit to the protests.

 

7.     On May 1, 2008, Rosetta, by its attorney, filed with the Commission a written request to continue this matter to the June hearing, and the hearing in this matter was continued.

 

8.     On June 24, 2008, Rosetta, 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.  Sworn written testimony and exhibits were submitted in support of the application.

 

9.     Testimony and exhibits submitted in support of the application showed that Rosetta proposes to drill the Chapman 22-12 Well at the proposed exception location to optimize recovery of reserves from the Niobrara Formation based upon geologic considerations.

 

10.   Testimony and exhibits submitted in support of the application showed that in order to prevent waste and protect correlative rights of all owners in the area surrounding the proposed location, it is reasonable and equitable to permit an exception location to allow the drilling of a well at the described location.  Rosetta also asserts that Rule 318.c. of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission provides for exception locations when geologic, topographical or environmental conditions warrant a variance from field rules.

 

11.   Testimony and exhibits submitted in support of the application showed that waivers were requested from all contiguous and cornering owners in lands toward whom the well is proposed to be moved who are affected by the exception location.  Waivers have not been obtained.

 

12.   The testimony and exhibits submitted indicate that Rosetta has complied with the requirements of 318.c.

 

13.   The above-referenced testimony and exhibits show that the proposed well location exception will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.

 

14.  Rosetta Resources, Inc. agreed to be bound by oral order of the Commission.

 

15.   Based on the facts stated in the verified application, having received two protests which were not supported by technical evidence, and based on the Hearing Officer review of the application under Rule 511.b., the Commission should enter an order to allow an exception to the permitted location in Order No. 315-3, for the drilling of the proposed Chapman 22-12 Well with a surface location of 2451 feet FSL and 651 feet FWL, in the NW¼ SW¼ of Section 22, Township 1 South, Range 44 West, 6th P.M., for the production of gas and associated hydrocarbons from the Niobrara Formation.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that the Chapman 22-12 Well is hereby allowed to be located at an exception location 2451 feet FSL and 651 feet FWL in the NW¼ SW¼ of Section 22, Township 1 South, Range 44 West, 6th P.M., for the production of gas and associated hydrocarbons from the Niobrara Formation.

 

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.

 

                        ENTERED this__________day of July, 2008, as of July 15, 2008.

           

                                                                        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

July 21, 2008