BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER THE PROMULGATION AND ESTABLISHMENT ) CAUSE NO. 440
OF FIELD RULES TO GOVERN OPERATIONS IN THE )
PARACHUTE FIELD, GARFIELD COUNTY, COLORADO ) ORDER NO. 440-27
This cause came on for hearing before the Commission at 9:00 a.m. on April 19, 2004, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado for an order to segregate the 320-acre drilling and spacing unit consisting of the N½ of Section 6, Township 7 South, Range 95 West, 6th P.M., and to establish two 160-acre drilling and spacing units, consisting of the NE¼ and the NW¼ of said Section 6.
The Commission finds as follows:
1. Williams Production RMT Company (“Williams”) 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 May 18, 1990, the Commission issued Order No. 440-12, which among other things, established a 320-acre drilling and spacing unit for production of gas and associated hydrocarbons from the Mesaverde Formation for the N½ of Section 6, Township 7 South, Range 95 West, 6th P.M., and provided that the GV 42-6 Well, located in the SW¼ NE¼ of said Section 6, would continue to be treated as a well pooled upon a 160-acre basis since the well had been spudded prior to the date of the order.
5. On February 27, 2004, Williams, by its attorney, filed with the Commission a verified application for an order to segregate the 320-acre drilling and spacing unit consisting of the N½ of Section 6, Township 7 South, Range 95 West, 6th P.M., and to establish two 160-acre drilling and spacing units, consisting of the NE¼ and the NW¼ of said Section 6 because a pooling agreement exists for the NE¼ and plans are underway to drill in the NW¼. No prejudice will result by changing from one 320-acre drilling and spacing unit to two 160-acre drilling and spacing units since the only wells located on the 320-acre unit are being produced on a pooled 160-acre basis.
6. Testimony and exhibits presented at the administrative hearing described the surface ownership in Section 6, Township 7 South, Range 95 West, 6th P.M. and the existing wells in the NE¼ of Section 6. Additional testimony indicated that two (2) additional wells have been drilled and eight (8) other wells have been permitted by Williams in the NE¼ of Section 6, Township 7 South, Range 95 West, 6th PM. In all cases these wells have been or are planned to be produced on a pooled 160-acre basis.
7. Testimony presented at the administrative hearing indicated that additional wells will be drilled in the NW¼ of Section 6 in the future and segregation of the 320-acre drilling and spacing unit consisting of the N½ of Section 6 into two 160-acre drilling and spacing units would allow orderly development of said Section 6 because there would not be a 320-acre drilling and spacing unit overlying a pooled 160-acre unit. Additional testimony indicated that a communitization agreement will be formed with the Bureau of Land Management (“BLM”) for the NW¼ of Section 6. Further testimony indicated that all interested parties have received notice of the application, including the BLM, and that no protests to the application have been received.
8. At the time of the administrative hearing, Williams Production RMT Company agreed to be bound by oral order of the Commission.
9. Based on the facts stated in the verified application, having received no protests and having been heard by the Hearing Officer who recommended approval, the Commission should enter an order to segregate the 320-acre drilling and spacing unit consisting of the N½ of Section 6, Township 7 South, Range 95 West, 6th P.M., and to establish two 160-acre drilling and spacing units, consisting of the NE¼ and the NW¼ of said Section 6 for production of gas and associated hydrocarbons from the Mesaverde Formation.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Order No. 440-12 is hereby amended to segregate the 320-acre drilling and spacing unit consisting of the N½ of Section 6, Township 7 South, Range 95 West, 6th P.M., into two 160-acre drilling and spacing units consisting of the NE¼ and the NW¼ of said Section 6 for production of gas and associated hydrocarbons from the Mesaverde 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 April, 2004, as of April 19, 2004.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By _______________________________________
Dated at Suite 801 Patricia C. Beaver, Secretary
1120 Lincoln Street
Denver, Colorado 80203
April 28, 2004