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 OPERATION FOR THE WILLIAMS FORK AND ILES FORMATIONS, PARACHUTE FIELD, GARFIELD COUNTY,     COLORADO

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CAUSE NO. 440

 

DOCKET NO. 170600390

 

TYPE: SPACING

 

ORDER NO. 440-80

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on June 12, 2017, at Rio Blanco County Courthouse, 555 Main Street, Meeker, Colorado, upon application for an order to establish an approximate 560-acre drilling and spacing unit for certain portions in Sections 8 and 17, Township 7 South, Range 95 West, 6th P.M., and to approve one directional well 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.         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 August 18, 2009, the Commission entered Order No. 440-58, which vacated an existing 320-acre drilling and spacing unit for the W½ of Section 17, Township 7 South, Range 95 West, 6th P.M. and established two approximate 240-acre units consisting of the NW¼ and W½NE¼, and SW¼ and W½SE¼ of Section 17, Township 7 South, Range 95 West, 6th P.M., for the production of gas and associated hydrocarbons Williams Fork and Iles Formations, and authorized the equivalent of one well per ten acres, to be located anywhere in the unit but no closer than 100 feet from the boundaries of the unit, without exception being granted by the Director of the Commission.  The Order further stated that in cases where the lands abut or corner 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 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 Commission.

 

5.         On August 18, 2009, the Commission entered Order No. 440-57, which pooled all interests in the an approximate 240-acre drilling and spacing unit established by Order No. 440-58 for the NW¼ and W½NE¼ of Section 17, Township 7 South, Range 95 West, 6th P.M., and authorized cost recovery pursuant to §34-60-116(7), C.R.S., for the wells drilled within the unit.

 

6.         On February 22, 2010, the Commission entered Order No. 440-59, which established an approximate 320-acre unit for the S½ of Section 8, Township 7 South, Range 95 West, 6th P.M., for the production of gas and associated hydrocarbons Williams Fork and Iles Formations, and authorized the equivalent of one well per ten acres, to be located anywhere in the DSU but no closer than 100 feet from the boundaries of the DSU without exception being granted by the Director of the Commission.  The Order also stated that in cases where the lands abut or corner 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 and Iles Formation wells, the well shall be located downhole no closer than 200 feet from the boundary or boundaries of the DSU so abutting or cornering such lands without exception being granted by the Director of the Commission.

 

7.         On January 30, 2017, the Commission entered Order No. 440-77, which pooled all interests in the DSU established for by Order No. 440-59 for the S½ of Section 8, Township 7 South, Range 95 West, 6th P.M., and authorized cost recovery pursuant to C.R.S. 34-60-116(7) for the following wells: Monument Ridge B 24A-08-07-95 Well (API No. 05-045-22895), Monument Ridge B 23D-08-07-95 Well (API No. 05-045-22896), Monument Ridge B 33A-08-07-95 Well (API No. 05-045-22901), Monument Ridge B 33B-08-07-95 Well (API No. 05-045-22903), Monument Ridge B 33D-08-07-95 Well (API No. 05-045-22905), Monument Ridge B 33C-08-07-95 Well (API No. 05-045-22906), Monument Ridge B 24C-08-07-95 Well (API No. 05-045-22907), Monument Ridge B 24D-08-07-95 Well (API No. 05-045-22908), Monument Ridge B 34B-08-07-95 Well (API No. 05-045-22909), Monument Ridge B 24B-08-07-95 Well (API No. 05-045-22910), Monument Ridge B 34C-08-07-95 Well (API No. 05-045-22911), Monument Ridge B 34A-08-07-95 Well (API No. 05-045-22912), Monument Ridge B 43C-08-07-95 Well (API No. 05-045-22914), Monument Ridge B 43B-08-07-95 Well (API No. 05-045-22915), Monument Ridge B 44B-08-07-95 Well (API No. 05-045-22916), Monument Ridge B 44D-08-07-95 Well (API No. 05-045-22917), Monument Ridge B 34D-08-07-95 Well (API No. 05-045-22959), Monument Ridge B 43A-08-07-95 Well (API No. 05-045-22960), Monument Ridge B 44A-08-07-95 Well (API No. 05-045-22961), Monument Ridge B 23C-08-07-95 Well (API No. 05-045-22963), Monument Ridge B 44C-08-07-95 Well (API No. 05-045-22964), and Monument Ridge B 43D-08-07-95 Well (API No. 05-045-22965).

 

8.         Applicant drilled and completed the Monument Ridge B #21A-17-07-95 Well (API No. 05-045-22893) (“Well”) close to the border between the unit that covers the NW¼ and W½NE¼ of Section 17, Township 7 South, Range 95 West, 6th P.M. (“Southern DSU”) and the DSU that covers the S½ of Section 8, Township 7 South, Range 95 West, 6th P.M. (“Northern DSU”). The Subject Well was drilled directionally from northeast to southwest and contains 10 completion stages. The top two completion stages were inadvertently completed beyond the 100-foot setback established for the northern boundary of the Southern DSU. Stage 9 is located approximately 53 feet south of the boundary between the two units, and Stage 10 is located approximately 21 feet north of the boundary between the two units.

 

9.         On April 13, 2017, Ursa, by the attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to establish an approximate 560-acre drilling and spacing unit for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formation:

 

Township 7 South, Range 95 West, 6th P.M.
Section 8:        S½
Section 17:      NW¼, W½NE¼

10.       On April 13, 2017, Ursa, by its attorneys, filed a Concurrent Application to pool all interests in the approximate 560-acre drilling and spacing unit proposed for the Application Lands and subject the nonconsenting parties to cost recovery pursuant to §34-60-116(7), C.R.S., for the Well.

 

11.       On May 22, 2017, Applicant, 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.

 

12.       Land testimony and exhibits submitted in support of the Application by N. Arthur Bollen, Land Manager for Ursa, showed that Ursa owns a leasehold ownership interest in the Application Lands. Land testimony also showed that In March of 2017, Applicant drilled and completed the Monument Ridge B #21A-17-07-95 Well) close to the border between the unit that covers the NW¼ and W½NE¼ of Section 17, Township 7 South, Range 95 West, 6th P.M. (“Southern DSU”) and the unit that covers the S½ of Section 8, Township 7 South, Range 95 West, 6th P.M. (“Northern DSU”).

 

13.       Geology and engineering testimony showed that multiple wells have been drilled, tested and completed in the Williams Fork and Iles Formations on lands in the immediate vicinity of the application lands, and that spacing units and development rules for those adjacent lands were established in Order Nos. 139-95, 440-56, 440-60, 440-46, and 440-61, for the Williams Fork and Iles Formations.  Further testimony showed that establishing the proposed drilling and spacing unit for the Application Lands, and authorizing the Monument Ridge B #21A-17-07-95 Well within the unit, will promote economic and efficient development of the Williams Fork and Iles Formations, prevent waste, and protect correlative rights.

 

14.       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.

 

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

 

16.       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 560-acre drilling and spacing unit for certain portions in Sections 8 and 17, Township 7 South, Range 95 West, 6th P.M., and to approve one directional well 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.         Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, an approximate 560-acre drilling and spacing unit for the below-described lands, is hereby established, and one directional well is hereby approved, for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations:

 

Township 7 South, Range 95 West, 6th P.M.
Section 8:        S½
Section 17:      NW¼, W½NE¼

 2.        The Well drilled under this Order shall be drilled from the surface of the drilling unit, or on adjacent lands with consent of the landowner, from no more than one surface location, unless the Director grants an exception.

 

3.         The wellbore of the Well to be drilled under this Order may enter the Williams Fork and Iles Formations anywhere within the unit, or on adjacent lands, 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 30 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 June, 2017, as of June 12, 2017.

           

 

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

                                                                                                      By____________________________________       

                                                                        Peter Gowen, Acting Secretary