BEFORE THE OIL AND GAS CONSERVATION
COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE PARACHUTE FIELD, GARFIELD COUNTY, COLORADO |
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CAUSE NO. 440
ORDER NO. 440-58
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REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 9:00 a.m. on August 18, 2009, at the La Quinta Inn & Suites, 2833 Toupal Drive, Trinidad, Colorado, for an order to vacate the designated 320-acre drilling and spacing unit consisting of the W½ of Section 17, Township 7 South, Range 95 West, 6th P.M., for the production of gas and associated hydrocarbons from the Mesaverde Formation, and to establish two approximate 240-acre drilling and spacing units for the NW¼ and W½ NE¼ and the SW¼ and W½ SE¼ of said Section 17 and approve those units for 10-acre well density, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.
FINDINGS
The Commission finds as follows:
1. Antero Resources Piceance Corporation (“Antero”), 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 May 18, 1990, the Commission issued Order No. 440-12, which among other things, established 320-acre drilling and spacing units for certain lands, including Section 17, Township 7 South, Range 95 West, 6th P.M., for the production of gas and associated hydrocarbons from the Mesaverde Formation, with the designation as either E½ and W½ stand-up units or N½ and S½ lay-down units at the discretion of the operator of the first well permitted, with the permitted well to be located on the established unit no closer than 600 feet from the boundaries of the unit and no closer than 1200 feet from any well producing or producible from the same formation.
5. On August 28, 2007, the Commission issued Order No. 440-48, which among other things, vacated the designated 320-acre drilling and spacing unit consisting of the E½ of Section 17, Township 7 South, Range 95 West, 6th P.M., established four approximate 40-acre drilling and spacing units, and approved 20-acre well density for the E½ E½ of said Section 17, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.
6. On May 26, 2009, Antero, by its attorney, filed with the Commission a verified application to: (1) vacate the designated 320-acre drilling and spacing unit consisting of the W½ of Section 17, Township 7 South, Range 95 West, 6th P.M., for the production of gas and associated hydrocarbons from the Mesaverde Formation, and (2) establish two approximate 240-acre drilling and spacing units for the below-listed lands and approve those units for 10-acre well density, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations:
Township 7 South, Range 95 West, 6th P.M.
Section 17: NW¼ and W½ NE¼
Section 17: SW¼ and W½ SE¼
All future Williams Fork Formation and Iles Formation wells to be drilled upon the application lands should be located downhole anywhere within a given drilling unit but no closer than 100 feet from the boundary or boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission. It is provided, however, that in cases where a drilling and spacing unit of the application lands abuts or corners lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill 10-acre density Williams Fork Formation and Iles Formation wells, the well should be located downhole no closer than 200 feet from the boundary or boundaries of the unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.
That, except as previously authorized by order of the Commission, wells to be drilled under this application should be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Director of the Oil and Gas Conservation Commission pursuant to application made for such exception.
7. On August 3, 2009, EnCana Oil & Gas (USA) Inc. (“EnCana”), by its attorney, filed a Protest with the Commission. On August 5, 2009, the Hearing Officer presided over a prehearing conference convened in accordance with Rule 527. On August 6, 2009, EnCana, by its attorney, contacted the Commission and orally withdrew its Protest. On August 12, 2009, EnCana, by its attorney, filed its Withdrawal of Protest with the Commission.
8. On August 7, 2009, Antero, 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 as is provided for by Rule 511. Sworn written testimony and exhibits were submitted in support of the application.
9. Testimony and exhibits showed that Antero is the majority leasehold owner of the application lands. Additional testimony showed that the application lands are in the immediate vicinity of lands which have been approved for 10-acre well density drilling for the Williams Fork Formation under Order Nos. 440-52 and 440-55, and that it is requested that the Commission take administrative notice of the testimony and exhibits supporting the applications resulting in the entry of Order Nos. 440-52 and 440-55 in support of this application. Further testimony indicated that Antero recognizes the potential in developing the Iles Formation on dual completion with the Williams Fork Formation.
10. The above-referenced testimony and exhibits show that the proposed spacing and density will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.
11. Antero Resources Piceance Corporation agreed to be bound by oral order of the Commission.
12. Based on the facts stated in the verified application, having received one protest which was subsequently withdrawn, and based on the Hearing Officer review of the application under Rule 511., the Commission should enter an order to vacate the designated 320-acre drilling and spacing unit consisting of the W½ of Section 17, Township 7 South, Range 95 West, 6th P.M., for the production of gas and associated hydrocarbons from the Mesaverde Formation, and establish two approximate 240-acre drilling and spacing units for the NW¼ and W½ NE¼ and the SW¼ and W½ SE¼ of said Section 17 and approve those units for 10-acre well density, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.
ORDER
NOW, THEREFORE IT IS ORDERED, that the designated 320-acre drilling and spacing unit consisting of the W½ of Section 17, Township 7 South, Range 95 West, 6th P.M., for the production of gas and associated hydrocarbons from the Mesaverde Formation, is hereby vacated.
IT IS FURTHER ORDERED, that two approximate 240-acre drilling and spacing units are hereby established for the below-listed lands, and said units are hereby approved for the equivalent of one well per 10 acres density, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations:
Township 7 South, Range 95 West, 6th P.M.
Section 17: NW¼ and W½ NE¼
Section 17: SW¼ and W½ SE¼
All future Williams Fork Formation and Iles Formation wells to be drilled upon the application lands shall be located downhole anywhere within a given drilling unit but no closer than 100 feet from the boundary or boundaries of the unit without exception being granted by the Director of the Oil and Gas Conservation Commission. It is provided, however, that in cases where a drilling and spacing unit of the application lands abuts or corners lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill 10-acre density Williams Fork Formation and Iles Formation wells, the well shall be located downhole no closer than 200 feet from the boundary or boundaries of the unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.
That, except as previously authorized by order of the Commission, wells to be drilled under this application shall be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Director of the Oil and Gas Conservation Commission pursuant to application made for such exception.
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 August, 2009, as of August 18, 2009.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Robert A. Willis, Acting Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
August 25, 2009