BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND ) CAUSE NOS. 232 & 518
ESTABLISHMENT OF FIELD RULES TO GOVERN )
OPERATIONS IN THE THIRD CREEK FIELD, ) ORDER NOS. 232-231
DENVER COUNTY, COLORADO ) 518-1
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m. on September 17, 1999, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of the City and County of Denver by its attorney and through Oaks Resources Management, Inc., for an order authorizing a waterflood pilot project in Section 7, Township 2 South, Range 65 West, 6th P.M. and Section 12, Township 2 South, Range 66 West, 6th P.M.
FINDINGS
The Commission finds as follows:
1. The City and County of Denver by its representative Oaks Resources Management, Inc. 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.
4. Exhibits and testimony presented at the administrative hearing showed that all of the surface and minerals in and surrounding the waterflood pilot area in Section 7, Township 2 South, Range 65 West, 6th P.M. and Section 12, Township 2 South, Range 66 West, 6th P.M. are owned by the City and County of Denver, with the exception of a ten (10) acre tract consisting of the NE¼ NE¼ NW¼ of Section 18, Township 2 South, Range 65 West, 6th P.M. which is owned by North American Resources Company ("NARCO"). The NARCO tract is located 2,310 feet from the proposed injection well, the Champlin 117 A-2 Well ("the proposed injection well") located in the NE¼ SW¼ of Section 7, Township 2 South, Range 65 West, 6th P.M. Further testimony presented established that, although the NARCO tract is not within the waterflood pilot area, notice of the waterflood pilot application was served to NARCO on August 18, 1999.
5. Exhibits and testimony presented at the administrative hearing showed that the "J" Sand Formation in the proposed waterflood pilot area is an unusually well-developed reservoir with well-defined compartments of good reservoir quality. Additional testimony indicated that the proposed injection well has approximately 40 feet of thickness in the "J" Sand Formation at a depth of approximately 8,275 feet, and is located in an area of desirable reservoir quality for evaluating a waterflood pilot project.
6. Exhibits and testimony presented at the administrative hearing indicated that the original "J" Sand Formation wells in the Third Creek Field have recovered approximately 2.2 million barrels of oil, or 22% of the original oil in place, and that an incremental 1 million barrels, or an additional 10% of the original oil in place, could be recovered by a waterflood project in the field. The purpose of the waterflood pilot project is to confirm injectivity and other reservoir parameters and to evaluate the economics of expanding the flood area to include all of Sections 7 and 18, Township 2 South, Range 65 West, 6th P.M., in addition to the SE¼ of Section 12, Township 2 South, Range 66 West, 6th P.M.
7. Exhibits and testimony presented at the administrative hearing indicated that the well proposed for injection is constructed in a manner that adequately protects the Fox Hills fresh water aquifer.
8. Exhibits and testimony presented at the administrative hearing indicated that it is planned to inject water from a water well to be completed in the Arapahoe aquifer in the SE¼ SW¼ of Section 7, Township 2 South, Range 65 West, 6th P.M. Further testimony indicated that this water well is expected to be able to produce the 5,000 barrels per day of water needed for a full waterflood project if the pilot project is successful.
9. Exhibits and testimony presented at the administrative hearing indicated that the plan for the waterflood pilot project is to inject into the proposed injection well until response is observed in the surrounding monitor wells. This response will be measured by changes in the production in the monitor wells. At that time, the waterflood feasibility study will be updated and a decision will be made with regard to submitting an application for a full waterflood operation on an expanded area.
10. Exhibits and testimony presented at the administrative hearing indicated that the waterflood feasibility study showed good economics for the waterflood project with a high rate of return. In addition, the City and County of Denver will provide a status report of the waterflood pilot project one (1) year from the commencement of the waterflood operation. The waterflood operation is expected to commence by the end of October, 1999.
11. That the granting of the application is necessary to increase ultimate recovery and to prevent waste of hydrocarbons.
12. At the time of the administrative hearing the applicant agreed to be bound by oral order of the Commission.
13. Based on the facts stated in the application, having received no protests and having been heard by the Hearing Officer who recommends approval the Commission should enter an order authorizing a waterflood pilot project in Section 7, Township 2 South, Range 65 West, 6th P.M. and Section 12, Township 2 South, Range 66 West, 6th P.M.
ORDER
NOW, THEREFORE IT IS ORDERED that a waterflood pilot project in Section 7, Township 2 South, Range 65 West, 6th P.M. and Section 12, Township 2 South, Range 66 West, 6th P.M is hereby authorized.
IT IS FURTHER ORDERED that the City and County of Denver shall be required to provide to the Commission a status report of the waterflood pilot project one year from the commencement of the waterflood operation.
IT IS FURTHER ORDERED that the injection well proposed for the waterflood pilot project shall be approved by the Director in accordance with the rules and regulations of the 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.
ENTERED this day of September, as of September 17, 1999.
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
February 16, 2005