BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

            IN THE MATTER OF PROMULGATION AND                   )           CAUSE NO. 510

            ESTABLISHMENT OF FIELD RULES TO                        )

            GOVERN OPERATIONS IN THE GRAND VALLEY        )           ORDER NO. 510-38

            FIELD, GARFIELD COUNTY, COLORADO                     )          

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission at 8:00 a.m. on October 2, 2007, in the Public Hearing Room, Old Court House, 544 Rood Avenue, 2nd Floor, Grand Junction, Colorado, for an order to establish a 40-acre drilling and spacing unit consisting of the SW¼ SW¼ of Section 26, Township 7 South, Range 96 West, 6th P.M., and allow the equivalent of one well per 10 acres for production of gas and associated hydrocarbons from the Williams Fork Formation.

 

FINDINGS

 

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 pursuant to the Oil and Gas Conservation Act.

 

4.  On May 16, 1994, the Commission issued Order No. 510-1, which among other things, allowed wells to be located no closer than 400 feet from the boundaries of any lease line and no closer than 800 feet from any existing Williams Fork Formation wells for certain lands including Section 26, Township 7 South, Range 96 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group.

  

5.  On August 8, 2007, Williams, by its attorney, filed with the Commission a verified application for an order to establish a 40-acre drilling and spacing unit consisting of the SW¼ SW¼ of Section 26, Township 7 South, Range 96 West, 6th P.M., and allow the equivalent of one well per 10 acres for production of gas and associated hydrocarbons from the Williams Fork Formation.

 

6.  On September 18, 2007, Williams, 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.  Sworn written testimony and exhibits were submitted in support of the application.

 

7.  Testimony and exhibits submitted in support of the application showed that Williams operates approximately 67,580 acres of land with approved 10-acre well density for the Williams Fork Formation, in which 37,765 acres are fee lands and 29,815 acres are federal lands.  Additional testimony indicated that the application lands contain approximately 40 acres of fee lands.

 

8.  Testimony and exhibits submitted in support of the application showed that the Williams Fork Formation is a common source of supply underlying the application lands, that sands in wells located as close as 306 feet do not correlate, and that based on the geologic model, 10-acre density drilling is necessary to develop the Williams Fork Formation.

 

9.  Testimony and exhibits submitted in support of the application indicated that gas-in-place calculations showed that 10-acre density drilling is necessary to maximize production of the resource.  Additional testimony indicated that more depletion was observed when wells are on exact fracture orientation with older parent wells.  Further testimony indicated that even with some pressure reduction, 10-acre density wells will produce substantial incremental reserves.

 

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.  No protests to the application have been filed with the Commission or the applicant. 

 

12.  Williams Production RMT Company 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.b., the Commission should enter an order to establish a 40-acre drilling and spacing unit consisting of the SW¼ SW¼ of Section 26, Township 7 South, Range 96 West, 6th P.M., and allow the equivalent of one well per 10 acres for production of gas and associated hydrocarbons from the Williams Fork Formation.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that a 40-acre drilling and spacing unit consisting of the SW¼ SW¼ of Section 26, Township 7 South, Range 96 West, 6th P.M. is hereby established and the equivalent of one well per 10 acres is hereby allowed for production of gas and associated hydrocarbons from the Williams Fork Formation.

 

IT IS FURTHER ORDERED, that all future Williams Fork Formation wells shall be located downhole anywhere in the drilling and spacing unit but no closer than 100 feet from the 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 the application 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 Formation wells, the well shall be located downhole no closer than 200 feet from the boundary or boundaries of the drilling unit so abutting or cornering such lands without exception being granted by the Director of the Oil and Gas Conservation Commission.

 

IT IS FURTHER ORDERED, 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 the application lands unless exception is granted by the Colorado 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 herewith. 

 

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 October, 2007, as of October 2, 2007.

           

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________          

                                                                                    Patricia C. Beaver, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

October 16, 2007