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 FOR THE WILLIAMS FORK AND ILES FORMATIONS, UNNAMED FIELD, MESA COUNTY, COLORADO

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CAUSE NO. 369

 

DOCKET NO. 150500327

 

ORDER NO. 369-13

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on May 18, 2015 at the Aims Community College, 260 College Avenue, Fort Lupton, Colorado, upon application for an order to establish an approximate 81.70-acre drilling and spacing unit for Section 30, Township 9 South, Range 93 West, 6th P.M., and approve the equivalent of one well per ten acres density within the unit, for the production of oil, gas, and associated hydrocarbons from the Williams Fork and Iles Formations.  

 

FINDINGS

 

The Commission finds as follows:

 

1.          Piceance Energy, LLC (“Piceance” or “Applicant”) 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.         Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that, on unspaced lands, wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and located not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply. The Application Lands are subject to this Rule for the Williams Fork and Iles Formations.

 

5.         On March 19, 2015, Piceance, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to establish an approximate 81.70-acre drilling and spacing unit for the below-described lands (“Application Lands”) and approve the equivalent of one well per ten acres density within the unit, for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations, with each well to be located no closer than 100 feet from the unit boundary line, or 200 feet from the unit boundary line if the unit abuts or corners lands not subject to 10-acre density, without exception being granted by the Director:

 

Township 9 South, Range 93 West, 6th P.M.

Section 30:      Lot 4, SE¼SW¼

 

6.         On April 27, 2015, Piceance, by its attorneys, 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.

 

            7.         Land testimony and exhibits submitted in support of the Application by Barbara Hinman, Senior Landman for Laramie Energy II, of which Piceance is a subsidiary, showed that Piceance holds oil and gas leasehold interests and has a right to drill in the Application Lands.  

 

8.         Geologic testimony and exhibits submitted in support of the Application by Andrew McCarthy, Senior Geologist for Laramie Energy II, of which Piceance is a subsidiary, show that Williams Fork Formation consists of sand bodies that are highly discontinuous in nature, and wells drilled on ten acre density will therefore statistically be unlikely to encounter the same sand bodies. Establishing the proposed drilling and spacing units will allow for optimal bottom hole well placement necessary to develop the Williams Fork and Iles Formations underlying the Application Lands. 

 

9.         Engineering testimony and exhibits submitted in support of the Application by Robert Hea, Executive Vice President and Chief Operating Officer for Laramie Energy II, of which Piceance is a subsidiary, showed that a 81.70-acre drilling and spacing unit consisting of the Application Lands is not less than the maximum area which can be efficiently, economically and effectively drained by a well producing oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations, and development of the Williams Fork and Iles Formations from a 81.70-acre drilling and spacing unit composed of the Application Lands will serve to prevent waste and be an efficient manner of draining the reservoirs.

 

10.       The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.

 

11.       Piceance 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, the Commission should enter an order to establish an approximate 81.70-acre drilling and spacing unit for Section 30, Township 9 South, Range 93 West, 6th P.M., and approve the equivalent of one well per ten acres density within the unit, for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 81.70-acre drilling and spacing unit for the below-described lands, is hereby established, and the equivalent of one well per ten acres density within the unit, is hereby approved, for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations:

 

Township 9 South, Range 93 West, 6th P.M.

Section 30:      Lot 4, SE¼SW¼

 

2.         Each well shall be located no closer than 100 feet from the unit boundary line, or 200 feet from the unit boundary line if the unit abuts or corners lands not subject to 10-acre density, without exception being granted by the Director.

 

3.         The wells will be drilled from no more than one wellpad per quarter-quarter section.

 

IT IS FURTHER ORDERED:

 

1.         The provisions contained in the above order shall become effective immediately.

 

2.         The Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

 

3.         Under the State Administrative Procedure Act, the Commission considers this Order to be final agency action for purposes of judicial review within 35 days after the date this Order is mailed by the Commission.

 

4.         An application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

 

ENTERED this _____ day of June, 2015, as of May 18, 2015.       

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By__________________________________

Julie Murphy, Secretary