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 FORMATION, PARACHUTE FIELD, GARFIELD COUNTY, COLORADO

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CAUSE NO. 440 DOCKET NO. 170500195 TYPE: ADDITIONAL WELLS ORDER NO. 440-79

REPORT OF THE COMMISSION

The Commission heard this matter on May 1, 2017, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to approve the drilling of one well per 10 acres within portions of Sections 13, 23, 24, 25, and 26, Township 6 South, Range 95 West, 6^th P.M., for the production of the oil, gas, and associated hydrocarbons from the Williams Fork Formation. 

FINDINGS

The Commission finds as follows:

1.         TEP Rocky Mountain LLC (Operator No. 96850) (“TEP” 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.         Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that wells drilled in excess of 2,500 feet in depth shall 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, unless authorized by order of the Commission upon hearing.  Sections 13, 23, 24, 25, and 26, Township 6 South, Range 95 West, 6^th P.M., are subject to this Rule for the production of the oil, gas, and associated hydrocarbons from the Williams Fork Formation.

5.         On March 2, 2017, TEP, by its attorneys, filed a verified amended application (“Application”) pursuant to §34-60-116, C.R.S., for an order to approve the drilling of wells with a ten-acre bottom-hole density for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Williams Fork Formation, with the productive interval of any wellbore to be no closer than 100 feet from the outer boundaries of the Application Lands, provided that where the Application Lands abut or corner lands for which the Commission has not at the time of drilling permit application granted the right to drill one well per 10 acres to the Williams Fork and Iles Formations, the productive interval of any wellbore should be located closer than 200 feet from the boundaries of the Application Lands, without exception being granted by the Director:

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

Section 13:  E½, E½W½, and Lots 1-4

Section 23:  SE¼NE¼, NE¼SW¼, N½SE¼, and Lots 1-10

Section 24:  NE¼, NE¼NW¼, S½NW¼, N½S½, and Lots 1-5

Section 25:  NW¼NE¼, N½NW¼, SW¼NW¼, and NW¼SW¼

Section 26:  N½SE¼, SW¼SE¼, and Lots 1, 2, 7, 8

Applicant stated that any wells to be drilled pursuant to an Order approving this Application will be drilled either vertically or directionally from no more than one pad per 40 acres, unless the Director grants an exception.

6.         On April 10, 2017, TEP, 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 Katie Pollock, Landman for TEP, showed that TEP holds oil and gas leasehold interests and has a right to drill in the Application Lands.

8.         Geologic testimony submitted in support of the Application by Stephen Sunnenberg, Geologist for TEP, showed the Williams Fork Formation is present throughout the Application Lands, and is comprised of sandstones, shales, and coals. The sandstone reservoirs in the Williams Fork Formation are a series of laterally discontinuous, lenticular, fluvial sandstone deposits with a median width of 666 feet.  Ten-acre bottom-hole well locations are necessary in order to allow any given wellbore to penetrate the maximum number of sandstone reservoirs.

9.         Engineering testimony submitted in support of the Application by Sanaz Seddighard, Reservoir Engineering Manager for TEP, demonstrated that the requested one well per 10 acres for the Williams Fork Formation underlying the Application Lands, will promote efficient drainage, protect correlative rights, prevent waste, and maximize the ultimate recovery of gas.

10.       The Commission has previously approved the drilling of wells with ten-acre density for the production of oil, gas, and associated hydrocarbons from the Williams Fork formation in Order Nos. 139-64, 139-68, 510-9, 510-10, 510-12, 510-31, 440-35, 440-43 and 440-51.

11.       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.

12.       TEP agreed to be bound by oral order of the Commission. 

13.       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 approve the drilling of one well per 10 acres within portions of Sections 13, 23, 24, 25, and 26, Township 6 South, Range 95 West, 6^th P.M., for the production of the oil, gas, and associated hydrocarbons from the Williams Fork Formation. 

ORDER

IT IS HEREBY ORDERED:

1.         One well per 10 acres for the below-described lands is hereby approved for the production of oil, gas and associated hydrocarbons from the Williams Fork Formation, with the productive interval of any wellbore to be no closer than 100 feet from the outer boundaries of the below-described lands, provided that where the below-described lands abut or corner lands for which the Commission has not at the time of drilling permit application granted the right to drill one well per 10 acres to the Williams Fork Formation, the productive interval of any wellbore should be located closer than 200 feet from the outer boundaries of the below-described lands, unless the Director grants an exception:

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

Section 13:  E½, E½W½, and Lots 1-4

Section 23:  SE¼NE¼, NE¼SW¼, N½SE¼, and Lots 1-10

Section 24:  NE¼, NE¼NW¼, S½NW¼, N½S½, and Lots 1-5

Section 25:  NW¼NE¼, N½NW¼, SW¼NW¼, and NW¼SW¼

Section 26:  N½SE¼, SW¼SE¼, and Lots 1, 2, 7, 8

2.         All wells permitted under this Order shall be drilled either vertically or directionally from no more than one wellpad per quarter-quarter section, unless the Director grants an exception.

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 8th day of May, 2017, effective as of May 1, 2017.

OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

By: ____________________________________     

     Peter Gowen, Acting Secretary