BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION                   )           CAUSE NO. 510

AND ESTABLISHMENT OF FIELD RULES TO               )

GOVERN OPERATIONS IN THE TRAIL RIDGE              )           ORDER NO. 510-44

FIELD, GARFIELD COUNTY, COLORADO                    )           CORRECTED

           

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission at 8:00 a.m. on August 19, 2008, in Ballroom B of the Brown Palace Hotel, 321 Seventeenth Street, Denver, Colorado, for an order to allow the equivalent of one well per 10 acres for certain lands in Townships 5 and 6 South, Ranges 97 and 98 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles 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.    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 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.  Certain lands in Townships 5 and 6 South, Ranges 97 and 98 West, 6th P.M. are subject to this rule for the Iles Formation.

 

5.    On July 11, 2005 (corrected August 18, 2005), the Commission issued Order No. 510-15, which among other things, allowed the equivalent of one well per 10 acres, with the permitted well to be located no closer than 100 feet from the outside boundary of the application lands unless such boundary abuts or corners lands in respect of which the Commission has not at the time of the drilling permit application granted the right to drill 10-acre density wells, in which event the Williams Fork Formation wells to be drilled upon the application lands shall be drilled downhole no closer than 200 feet from that portion of the boundary which so abuts or corners the lands in respect of which 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission, for the below-listed lands:

Township 6 South, Range 97 West, 6th P.M.

Section 3:                               Lots 7 through 16, S½

Sections 4 and 5:                  All

Section 6:                               Lots 13 through 18, and 22 through 25, E½ SW¼ and SE¼

Section 8:                               E½, E½ NW¼, SW¼ NW¼ and SW¼

Sections 9 and 10:                All

Sections 15 through 17:       All

Section 18:                            E½ and SE¼ NW¼

Section 19:                            NE¼ and E½ NW¼

Section 20:                            All

Section 29:                            All

Section 32:                            All       

 

Township 7 South, Range 97 West, 6th P.M.

Section 5:                   Tracts Subtracts A and B of Tract 82, Subtracts A and B of Tract 83, that portion of Tracts 80 and 81 lying in Section 5

Sections 6 and 7:      All

 

6.    On December 5, 2006, (corrected February 28, 2006), the Commission issued Order No. 510-17, which among other things, allowed optional drilling of wells for the production of gas and associated hydrocarbons from the Williams Fork Formation, the equivalent of one (1) well per 10 acres, with the permitted wells to be located anywhere within the application lands but no closer than 100 feet from the boundary of any lease line without exception being granted by the Director, except that with respect to lease lines abutting or cornering lands for which the Commission has not at the time of the drilling permit application granted the right to drill 10-acre density wells, the well shall be located downhole no closer than 200 feet from the lease line so abutting or cornering such lands, and no more than four (4) Williams Fork Formation wells should be drilled downhole per governmental quarter quarter section, for the below-listed lands:

                             

Township 5 South, Range 97 West, 6th P.M.

Section 1:                               All

Section 2:                               E½

Section 3:                               All

Sections 4 and 5:                  N½

Sections 10 through 15:       All

Section 16:                            S½

Section 17:                            W½

Section 19:                            S½

Sections 20 through 22:       All

Sections 23 and 24:             E½

Sections 25 through 27:       All

Section 28:                            SW¼

Section 29:                            W½

Section 30:                            All

Section 31:                            N½

Sections 32 through 36:       All

 

7.    On June 19, 2008, Williams, by its attorney, filed with the Commission a verified application for an order to allow the equivalent of one well per 10 acres, for the below-listed lands, for production from the Iles Formation, with permitted wells to be located downhole anywhere upon the lands but no closer than 100 feet from the boundaries of a lease line or the outside boundaries of the application lands as described below providing however that where such 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 Williams Fork Formation wells, the Iles Formation well shall be located no closer than 200 feet from the outside boundary or boundaries of such application lands.  All Iles Formation wells drilled upon the application lands will be drilled only in connection with the drilling of Williams Fork Formation wells and will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section unless exception is granted by the Director of the Colorado Oil and Gas Conservation Commission:

 

Township 5 South, Range 97 West, 6th P.M.

Section 1:       Lots 5(37.54), 6(37.82), 7(38.10), 8(38.38), S½ N½, S½

(aka ALL) Containing 631.84 acres, more or less.

Section 2:       Lots 5(38.67), 6(38.96), S½ NE¼, SE¼ (aka E½) 

Containing 317.63 acres, more or less.

Section 3:       Lots 5(39.80), 6(39.99), 7(40.19), 8(40.38), S½ N½, S½

(aka ALL) Containing 640.36 acres, more or less.

Section 4:       Lots 5(40.49), 6(40.50), 7(40.52), 8(40.53), S½ N½ (aka N½)

Containing 322.04 acres, more or less.

Section 5:       Lots 5(40.63), 6(40.80), 7(40.98), 8(41.15), S½ N½ (aka N½)

Containing 323.56 acres, more or less.

Section 10:    ALL

Containing 640.00 acres, more or less.

Section 11:    ALL

Containing 640.00 acres, more or less.

Section 12:    ALL

Containing 640.00 acres, more or less.

Section 13:    ALL

Containing 640.00 acres, more or less.

Section 14:    ALL

Containing 640.00 acres, more or less.

Section 15:    ALL

Containing 640.00 acres, more or less.

Section 16:    S½

Containing 320.00 acres, more or less.

Section 17:    W½

Containing 320.00 acres, more or less.

Section 19:    Lots 7(37.79), 8(37.99), S½ S½ (aka S½)

Containing 315.78 acres, more or less.

Section 20:    ALL

Containing 640.00 acres, more less.

Section 21:    ALL

Containing 640.00 acres, more or less.

Section 22:    ALL

Containing 640.00 acres, more or less.

Section 23:    E½

Containing 320.00 acres, more or less.

Section 24:    E½

Containing 320.00 acres, more or less.

Section 25:    ALL

Containing 640.00 acres, more or less.

Section 26:    ALL

Containing 640.00 acres, more or less.

Section 27:    ALL

Containing 640.00 acres, more or less.

Section 28:    SW¼

Containing 160.00 acres, more or less.

Section 29:    W½

Containing 320.00 acres, more or less.

Section 30:    Lots 5(38.19), 6(38.40), 7(38.62), 8(38.83), E½ W½, E½

(aka ALL) Containing 634.04 acres, more or less.

Section 31:    Lots 5(39.07), 6(39.34), E½ NW¼, NE¼ (aka N½)

Containing 318.41 acres, more or less.

Section 32:    Lots 1(39.60), 2(39.59), 3(39.58), 4(39.57), Tract 54(8.22), Tract 58(7.82), N½ S½, N½ (aka ALL)

Containing 654.38 acres, more or less.

Section 33:    Lots 4(39.60), 5(39.60), 6(39.60), 7(39.60), Tract 51(3.86), Tract 52(4.32), Tract 54(6.99), N½ S½, N½ (aka ALL)

Containing 653.57 acres, more or less.

Section 34:    Lots 3(42.00), 4(41.79), Tract 52(2.43), S½ SW¼, N½ S½, N½ (aka ALL)

Containing 643.79 acres, more or less.

Section 35:    Lots 1(41.67), 2(41.55), 3(41.45), 4(41.33), N½ S½, N½ 

(aka ALL)

Containing 646.00 acres, more or less.

Section 36:    Lots 1(2.76), 2(2.59), 3(2.42), 4(2.33), Tract 37(634.74)

(aka ALL)

Containing 644.75 acres, more or less.

 

Township 5 South, Range 98 West, 6th P.M.  

Section 1:       Lots 5(41.85), 6(41.97), 7(42.07), 8(42.19), S½ N½, S½ (aka ALL)

Containing 648.08 acres, more or less.

Section 2:       Lots 5(42.34), 6(42.54), 7(42.74), 8(42.94), S½ N½, S½

(aka ALL)

Containing 650.56 acres, more or less.

Section 3:       Lots 5(43.14), 6(43.35), 7(43.55), 8(43.76), S½ NE¼, SE¼ NW¼, E½ SW¼ NW¼, NW¼ SW¼ NW¼, N½ SW¼ SW¼ NW¼, N½ S½ SW¼ SW¼ NW¼, E½ SW¼, E½ W½ SW¼, SE¼

Containing 611.30 acres, more or less.

Section 4:       Lots 5(43.94), 6(44.10), 9(19.63), SE¼ NE¼, NE¼ SW¼ NE¼, N½ SE¼ SW¼ NE¼, N½ S½ SE¼ SW¼ NE¼ 

Containing 165.17 acres, more or less.

Section 10:    Lots 4(16.64), 5(16.64), SE¼

Containing 193.28 acres, more or less.

Section 12:    ALL

Containing 640.00 acres, more or less.

Section 13:    N½ N½, Lots 5(19.39), 6(19.53), 7(19.65), 8(11.75), that portion of Tract 68(143.85) lying in the S½

Containing 374.17 acres, more or less.

Section 14:    Lots 5(11.28), 6(23.36), 7(8.01), those portions of Tract 68(16.15), Tract 70(59.00), Tract 71(59.00), Tract 72(59.00) lying in the S½

Containing 235.80 acres, more or less.

Section 15:    Lots 1(16.64), 2(16.64), 3(20.68), 4(20.67), 5(8.00), 6(8.04), 7(8.32), NE¼.

Containing 258.99 acres, more or less.

 

Township 6 South, Range 97 West, 6th P.M.

Section 5:       Lots 5(40.14), 6(40.03), 7(39.91), 8(39.80)

Containing 159.88 acres, more or less

Section 6:       Lots 8(39.52), 9(39.09), 10(39.01), and 11(27.00).

Containing 144.62 acres, more or less.

 

Township 6 South, Range 98 West, 6th P.M.

Section 1:       W½, aka those portions of Tract 37(5.00), Tract 54(40.39), Tract 56(19.93), Tract 51(121.15) lying in the section.

Containing 186.47 acres, more or less.

Section 2:       E½, aka those portions of Tracts 49(2.00), 54(76.00), 37(75.00), 56(19.01) lying in the section.

Containing 172.01 acres, more or less.

 

Containing 20,626.48 acres, more or less.

 

8.    On August 7, 2008, 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.

 

9.    Testimony and exhibits submitted in support of the application indicated that the application lands contain approximately 20,626.48 total acres, and that Williams is the leaseholder of the entirety of application lands.

 

10. Testimony and exhibits submitted in support of the application indicated that to date, two wells have been drilled to and completed within the Iles Formation by Williams, and that well log analysis from the 24-21-597 Well and 24-28-597 Well suggests that the Iles Formation is hydrocarbon-bearing, which further suggests that the Iles Formation is hydrocarbon-bearing underlying the application lands.  Additional testimony indicated that, with the exception of the Rollins member, which is considered to be a non-productive interval across much of the area, of the Iles Formation, sandstones within the Iles Formation have widely variable thicknesses.  Further testimony indicated that the sandstones within the Iles Formation lack significant lateral continuity with permeability ranging from 0.10 to 0.005 millidarcies.

                                      

11. Testimony and exhibits submitted in support of the application indicated that Williams intends to drill wells on the application lands to the Iles Formation, and that Williams will commingle production for the Iles Formation with that from the Williams Fork Formation.  Additional testimony indicated that stand alone Iles Formation wells are not economic, and that commingling the Williams Fork Formation and Iles Formation production is the most economical and efficient method to develop the resources.  Further testimony indicated that 10-acre density drilling is necessary to economically and efficiently develop the Iles Formation underlying the application and that the proposed increased well density will protect correlative rights.

 

12. The above-referenced testimony and exhibits show that the proposed increased well density will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.

 

13. Williams Production RMT Company 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.b., the Commission should enter an order to allow the equivalent of one well per 10 acres for certain lands in Townships 5 and 6 South, Ranges 97 and 98 West, 6th P.M., for the production of gas and associated hydrocarbons from the Iles Formation.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that the equivalent of one well per ten (10) acres is hereby approved to be drilled on the below-listed lands, for the production of gas and associated hydrocarbons from the Iles Formation.

 

Township 5 South, Range 97 West, 6th P.M.

Section 1:       Lots 5(37.54), 6(37.82), 7(38.10), 8(38.38), S½ N½, S½

(aka ALL) Containing 631.84 acres, more or less.

Section 2:       Lots 5(38.67), 6(38.96), S½ NE¼, SE¼ (aka E½) 

Containing 317.63 acres, more or less.

Section 3:       Lots 5(39.80), 6(39.99), 7(40.19), 8(40.38), S½ N½, S½

(aka ALL) Containing 640.36 acres, more or less.

Section 4:       Lots 5(40.49), 6(40.50), 7(40.52), 8(40.53), S½ N½ (aka N½)

Containing 322.04 acres, more or less.

Section 5:       Lots 5(40.63), 6(40.80), 7(40.98), 8(41.15), S½ N½ (aka N½)

Containing 323.56 acres, more or less.

Section 10:    ALL

Containing 640.00 acres, more or less.

Section 11:    ALL

Containing 640.00 acres, more or less.

Section 12:    ALL

Containing 640.00 acres, more or less.

Section 13:    ALL

Containing 640.00 acres, more or less.

Section 14:    ALL

Containing 640.00 acres, more or less.

Section 15:    ALL

Containing 640.00 acres, more or less.

Section 16:    S½

Containing 320.00 acres, more or less.

Section 17:    W½

Containing 320.00 acres, more or less.

Section 19:    Lots 7(37.79), 8(37.99), S½ S½ (aka S½)

Containing 315.78 acres, more or less.

Section 20:    ALL

Containing 640.00 acres, more less.

Section 21:    ALL

Containing 640.00 acres, more or less.

Section 22:    ALL

Containing 640.00 acres, more or less.

Section 23:    E½

Containing 320.00 acres, more or less.

Section 24:    E½

Containing 320.00 acres, more or less.

Section 25:    ALL

Containing 640.00 acres, more or less.

Section 26:    ALL

Containing 640.00 acres, more or less.

Section 27:    ALL

Containing 640.00 acres, more or less.

Section 28:    SW¼

Containing 160.00 acres, more or less.

Section 29:    W½

Containing 320.00 acres, more or less.

Section 30:    Lots 5(38.19), 6(38.40), 7(38.62), 8(38.83), E½ W½, E½

(aka ALL) Containing 634.04 acres, more or less.

Section 31:    Lots 5(39.07), 6(39.34), E½ NW¼, NE¼ (aka N½)

Containing 318.41 acres, more or less.

Section 32:    Lots 1(39.60), 2(39.59), 3(39.58), 4(39.57), Tract 54(8.22), Tract 58(7.82), N½ S½, N½ (aka ALL)

Containing 654.38 acres, more or less.

Section 33:    Lots 4(39.60), 5(39.60), 6(39.60), 7(39.60), Tract 51(3.86), Tract 52(4.32), Tract 54(6.99), N½ S½, N½ (aka ALL)

Containing 653.57 acres, more or less.

Section 34:    Lots 3(42.00), 4(41.79), Tract 52(2.43), S½ SW¼, N½ S½, N½ (aka ALL)

Containing 643.79 acres, more or less.

Section 35:    Lots 1(41.67), 2(41.55), 3(41.45), 4(41.33), N½ S½, N½ 

(aka ALL)

Containing 646.00 acres, more or less.

Section 36:    Lots 1(2.76), 2(2.59), 3(2.42), 4(2.33), Tract 37(634.74)

(aka ALL)

Containing 644.75 acres, more or less.

 

Township 5 South, Range 98 West, 6th P.M. 

Section 1:       Lots 5(41.85), 6(41.97), 7(42.07), 8(42.19), S½ N½, S½ (aka ALL)

Containing 648.08 acres, more or less.

Section 2:       Lots 5(42.34), 6(42.54), 7(42.74), 8(42.94), S½ N½, S½

(aka ALL)

Containing 650.56 acres, more or less.

Section 3:       Lots 5(43.14), 6(43.35), 7(43.55), 8(43.76), S½ NE¼, SE¼ NW¼, E½ SW¼ NW¼, NW¼ SW¼ NW¼, N½ SW¼ SW¼ NW¼, N½ S½ SW¼ SW¼ NW¼, E½ SW¼, E½ W½ SW¼, SE¼

Containing 611.30 acres, more or less.

Section 4:       Lots 5(43.94), 6(44.10), 9(19.63), SE¼ NE¼, NE¼ SW¼ NE¼, N½ SE¼ SW¼ NE¼, N½ S½ SE¼ SW¼ NE¼ 

Containing 165.17 acres, more or less.

Section 10:    Lots 4(16.64), 5(16.64), SE¼

Containing 193.28 acres, more or less.

Section 12:    ALL

Containing 640.00 acres, more or less.

Section 13:    N½ N½, Lots 5(19.39), 6(19.53), 7(19.65), 8(11.75), that portion of Tract 68(143.85) lying in the S½

Containing 374.17 acres, more or less.

Section 14:    Lots 5(11.28), 6(23.36), 7(8.01), those portions of Tract 68(16.15), Tract 70(59.00), Tract 71(59.00), Tract 72(59.00) lying in the S½

Containing 235.80 acres, more or less.

Section 15:    Lots 1(16.64), 2(16.64), 3(20.68), 4(20.67), 5(8.00), 6(8.04), 7(8.32), NE¼.

Containing 258.99 acres, more or less.

 

Township 6 South, Range 97 West, 6th P.M.

Section 5:       Lots 5(40.14), 6(40.03), 7(39.91), 8(39.80)

Containing 159.88 acres, more or less

Section 6:       Lots 8(39.52), 9(39.09), 10(39.01), and 11(27.00).

Containing 144.62 acres, more or less.

 

Township 6 South, Range 98 West, 6th P.M.

Section 1:       W½, aka those portions of Tract 37(5.00), Tract 54(40.39), Tract 56(19.93), Tract 51(121.15) lying in the section.

Containing 186.47 acres, more or less.

Section 2:       E½, aka those portions of Tracts 49(2.00), 54(76.00), 37(75.00), 56(19.01) lying in the section.

Containing 172.01 acres, more or less.

 

Containing 20,626.48 acres, more or less.

 

IT IS FURTHER ORDERED, that all future Iles Formation wells drilled on the application lands shall be located downhole anywhere upon the lands but no closer than 100 feet from the boundaries of a lease line or the outside boundaries of the application lands providing however that where such 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 Iles Formation wells, Iles Formation wells shall be located no closer than 200 feet from the outside boundary or boundaries of such application lands.

 

IT IS FURTHER ORDERED, that all Iles Formation wells drilled upon the application lands shall be drilled only in connection with the drilling of Williams Fork Formation wells and 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 Colorado Oil and Gas Conservation Commission:

 

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, 2008, as of August 19, 2008.

           

                                                                        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

August 27, 2008