BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND ) CAUSE NO. 518
ESTABLISHMENT OF FIELD RULES TO GOVERN )
OPERATIONS IN THE THIRD CREEK FIELD, ) ORDER NO. 518-2
DENVER COUNTY, COLORADO )
This cause came on for hearing before the Commission at 9:00 a.m. on April 25, 2005, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to approve an enhanced recovery unit for certain lands in Township 2 North, Ranges 65 and 66 West, 6th P.M.
FINDINGS
The Commission finds as follows:
1. Executive Petroleum Services, LLC, 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.
4. On September 17, 1999, the Commission issued Order No. 518-1, which established a waterflood pilot project for the “J” Sand Formation in Section 7, Township 2 South, Range 65 West, 6th P.M. and Section 12, Township 2 South, Range 66 West, 6th P.M.
5. On March 7, 2005, Executive Petroleum Services, LLC by its representative, filed with the Commission a verified application for an order to approve an enhanced recovery unit for the below-listed lands. The surface and minerals are 100% owned by the City and County of Denver (“City”) for the unit area proposed, except for ten (10) acres in the NE¼ NE¼ NW¼ of Section 18, Township 2 South, Range 65 West, 6th P.M. where the surface is owned by EnCana Oil and Gas (USA) Inc. The operation for which authorization is requested is to inject water into the “J” Sand Formation for enhanced oil recovery within the proposed unit boundaries. All of the wells within the area of unitization are currently producing from the “J” Sand Formation. At this time it is proposed to convert three existing producing wells to injection and continue injection into the Champlin 117 Amoco #A-2 Well. Additionally, as part of this application, the City requested approval to add injection wells as needed in the future within the unit boundaries. The three (3) wells that would be converted to injection at this time would be the Champlin 117 Amoco #A-5 Well located in Section 7 and the Kallsen #3 and Kallsen #5 Wells both located in Section 18. It is estimated that the injection rate would be approximately 1500 BBL/day per well. A unit or cooperative agreement is not necessary for this application, as Denver International Airport owns all the surface and minerals in the unit and within ½ mile of the unit boundary. The only exception is the ten (10) acres described above in which EnCana Oil and Gas (USA), Inc. owns the surface only.
Township 2 South, Range 65 West, 6th P.M.
Sections 7 and 8: All
Sections 17 through 20: All
Township 2 South, Range 66 West, 6th P.M.
Sections 12 and 13: E½
Section 24: E½
6. Testimony and exhibits presented at the administrative hearing showed that the surface (except for 10 acres) and all of the mineral interests in the application area are owned by the City. Additional testimony showed that there are currently nineteen (19) wells producing from the “J” Sand Formation in the application area, and current production is approximately thirty-five (35) BOPD and seven hundred (700) MCFGPD.
7. Testimony and exhibits presented at the administrative hearing showed that a production response to the pilot waterflood was observed in January, 2002. The pilot waterflood, initialized in November 2000, consists of one injection well located in the NE¼ SW¼ of Section 7, Township 2 South, Range 65 West, 6th P.M.
8. Testimony and exhibits presented at the administrative hearing showed the "J" Sand Formation in the application area is approximately thirty (30) to seventy (70) feet thick with a porosity between ten percent (10%) and fifteen percent (15%) and a permeability between twenty (20) and two hundred thirteen (213) millidarcies.
9. Testimony and exhibits presented at the administrative hearing showed that the source water for the waterflood will be obtained from a water well owned by the City. Additional testimony showed that the well is permitted to produce two hundred fifty (250) gallons per minute. Further testimony indicated that studies show the waters from the formation and the water well to be compatible and that the three (3) wells will be converted to injection immediately.
10. A Unit Operating Agreement is not required because all surface property except ten (10) acres and all mineral interest is owned by the City. No other notices are required because the City also owns all surface property and mineral interests within one-half (½) mile from the unit boundary.
11. Testimony and exhibits presented at the administrative hearing showed that the reservoir pressure of the “J” Sand Formation is below the bubble point, and that the purpose of this water flood is to provide some amount of pressure maintenance. Additional testimony showed that the volumes of water injected are not expected to produce a “flood front”.
12. That the granting of the application is necessary to increase ultimate recovery and to prevent waste of hydrocarbons.
13. Executive Petroleum Services, LLC 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 having been heard by the Hearing Officer who recommends approval the Commission should enter an order to approve an enhanced recovery unit for the lands described above in Finding No. 5.
ORDER
NOW, THEREFORE IT IS ORDERED, that an enhanced recovery unit is hereby approved for the “J” Sand Formation for the below-described lands:
Township 2 South, Range 65 West, 6th P.M.
Sections 7 and 8: All
Sections 17 through 20: All
Township 2 South, Range 66 West, 6th P.M.
Sections 12 and 13: E½
Section 24: E½
IT IS FURTHER ORDERED, that any injection wells 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.
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 May, 2005, as of April 25, 2005.
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
May 16, 2005