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, PARACHUTE FIELD, GARFIELD COUNTY, COLORADO

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CAUSE NO. 440

 

DOCKET NO. 1404-SP-2047

 

ORDER NO. 440-72

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on April 28, 2014, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to establish an approximate 320-acre drilling and spacing unit for Section 7, Township 7 South, Range 95 West, 6th P.M., and approve 10-acre bottomhole density within the unit, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations of the Mesaverde Group.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Ursa Operating Company LLC (“Ursa” or “Applicant”), 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 April 19, 1990, the Commission issued Order No. 440-12 which, among other things, established 320-acre drilling and spacing units for certain lands, including Section 7, 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 E˝ and W˝ standup units or N˝ and S˝ laydown 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 unit boundaries and no closer than 1,200 feet from any well producing or producible from the same Mesaverde Formation.

 

5.         On June 1, 2010, the Commission entered Order No. 440-61 which, among other things, established an approximate 320-acre laydown drilling and spacing unit for the N˝ of Section 7, Township 7 South, Range 95 West, 6th P.M., and approved the equivalent of one well per 10 acres well density, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.

 

6.         On February 27, 2014, Ursa, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an order to establish an approximate 320-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve the equivalent of one well per 10-acre density within the unit, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations of the Mesaverde group, with such wells to be drilled either vertically or directionally from no more than one pad located on a given quarter-quarter section, absent an exception approved by the Commission.  Further, the wells may be located downhole anywhere upon the Application Lands, but no closer than 100 feet from the outside boundary of the Application Lands, unless such boundary abuts or corners lands for which the Commission has not at the time of the well permit application granted the right to drill 10-acre density wells, in which event the wells may be drilled no closer than 200 feet to such abutting or cornering lands:

 

                        Township 7 South, Range 95 West, 6th P.M.

                        Section 7:         S˝ 

 

7.         On April 15, 2014, Ursa, 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.

 

8.         Land testimony and exhibits submitted in support of the Application by Jarred McGhee, Landman for Ursa, showed that due to multiple parcels and multiple leases, establishing a drilling and spacing unit will allow Ursa to coordinate efficient development and limit surface disturbance on the Application Lands.  Testimony further showed that Ursa owns substantial leasehold interests in the Application Lands.

 

9.         The Commission finds that sufficient geological and engineering evidence has been presented previously to support 10-acre bottomhole density for wells drilled in the Williams Fork and Iles Formations of the Piceance Basin, including but not limited to, certain lands in the vicinity of the Application Lands as shown below. The Commission takes administrative notice of said evidence:

 

COGCC

Order #

Affected Lands

T-R-S

Unit Area/

Application

Lands

Spacing Unit Well Density

Adjacent Spaced Boundary Setback (ft.)

Adjacent Unspaced Boundary Setback (ft.)

Well-to-Well Setback

139-95

7S-95W-16

All

10 acre

100

200

None

139-95

7S-95W-19

All

10 acre

100

200

None

139-95

7S-95W-20

All

10 acre

100

200

None

139-95

7S-95W-21

All

10 acre

100

200

None

440-56

7S-95W-9

All

10 acre

100

200

None

440-56

7S-95W-10

All

10 acre

100

200

None

440-60

7S-95W-18

S

10 acre

100

200

None

440-46

7S-95W-6

S

10 acre (WF)

100

200

None

440-61

7S-95W-10

N

10 acre (WF)

100

200

None

 

10.       Order Nos. 139-95, 440-56, 440-46, and 440-61 contain land, geologic and engineering exhibits in support of the uncontested application.

 

 

11.       Order No. 440-60 contains land exhibits and written testimony in support of the uncontested application where staff took administrative notice of Order Nos. 440-52 and 440-55.

 

12.       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.

 

13.       Ursa agreed to be bound by oral order of the Commission. 

 

14.       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 320-acre drilling and spacing unit for Section 7, Township 7 South, Range 95 West, 6th P.M., and approve 10-acre bottomhole density within the unit, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations of the Mesaverde Group.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, an approximate 320-acre drilling and spacing unit for the below-described lands, is hereby established, and 10-acre bottomhole density within the unit is hereby approved, for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations, with such wells to be drilled either vertically or directionally from no more than one pad located on a given quarter-quarter section, without exception being granted by the Director:

 

                        Township 7 South, Range 95 West, 6th P.M.

                        Section 7:         S˝   

 

2.         All wells drilled to the Williams Fork and Iles Formations shall be located downhole no closer than 100 feet from the boundaries of the unit, unless such boundary abuts or corners lands for which the Commission has not at the time of the well permit application granted the right to drill 10-acre density wells, in which event the wells shall be located downhole no closer than 200 feet to such abutting or cornering lands, without exception being granted by the Director.

 

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   23rd  day of May, 2014, as of April 28, 2014.                     

 

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary