BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
|
IN THE MATTER OF THE APPLICATION OF URSA OPERATING COMPANY, LLC FOR AN ORDER TO ESTABLISH AN APPROXIMATE 160-ACRE DRILLING AND SPACING UNIT FOR THE NW¼ OF SECTION 12, TOWNSHIP 6 SOUTH, RANGE 92 WEST, 6TH P.M., AND TO APPROVE TEN-ACRE BOTTOMHOLE WELL DENSITY FOR THE WILLIAMS FORK AND ILES FORMATIONS, PARACHUTE FIELD, GARFIELD COUNTY, COLORADO |
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CAUSE NO. 523
DOCKET NO. 1401-SP-2005
ORDER NO. 523-8 |
REPORT OF THE COMMISSION
The Commission heard this matter on January 27, 2014, at the Centennial Building, 1313 Sherman Street, Room 318, Denver, Colorado, upon application for an order to establish an approximate 160-acre drilling and spacing unit for Section 12, Township 6 South, Range 92 West, 6th P.M., and approve 10-acre bottomhole density 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. 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 shall 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, unless authorized by order of the Commission upon hearing. Section 12 Township 6 South, Range 92 West, 6th P.M. is subject to Rule 318.a. for the Williams Fork and Iles Formations.
5. On October 31, 2011, the Commission entered Order No. 191-90 which, among other things, vacated an approximate 320-acre drilling and spacing unit established by Order No. 191-7 for the W½ of Section 12, Township 6 South, Range 92 West, 6th P.M., and established an approximate 160-acre drilling and spacing unit for the SW¼ of Section 12, Township 6 South, Range 92 West, 6th P.M. and approved the equivalent of one well per 10-acre density within the unit. The NW¼ of Section 12 reverted back to unspaced lands subject to Rule 318.a.
6. On November 26, 2013, Ursa, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to establish an approximate 160-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve the equivalent of one well per 10-acre density within the unit, for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations, with such wells to be drilled either vertically or directionally from no more than one pad located on a given quarter-quarter section, absent an exception approved by the Commission. Further, the wells may be located downhole anywhere upon the Application Lands, but no closer than 100 feet from the outside boundary of the Application Lands, unless such boundary abuts or corners lands for which the Commission has not at the time of the well permit application granted the right to drill 10-acre density wells, in which event the wells may be drilled no closer than 200 feet to such abutting or cornering lands:
Township 6 South, Range 92 West, 6th P.M.
Section 12: NW¼
7. On January 13, 2014, Ursa, 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.
8. Land testimony and exhibits submitted in support of the Application by Jarred McGhee, Landman for Ursa, showed that due to multiple parcels and multiple leases, establishing a drilling and spacing unit will allow Ursa to coordinate efficient development and limit surface disturbance on the Application Lands. Testimony further showed that Ursa owns a partial leasehold ownership interest in the Application Lands.
9. The Commission finds that sufficient geological and engineering evidence has been presented previously to support 10-acre bottomhole density for wells drilled in the Williams Fork and Iles Formations of the Piceance Basin, including but not limited to, certain lands in the vicinity of the Application Lands as shown below. The Commission takes administrative notice of said evidence:
|
T-R-S |
Unit Area |
COGCC |
Adjacent Spaced Boundary Setback (ft.) |
Adjacent Unspaced
Boundary Setback |
Well to Well Setback |
Spacing Unit Well Density |
|
06S-92W-14 |
SW¼ |
191-50 |
100 |
200 |
None |
10 Acre |
|
06S-92W-11 |
S½ of 11 |
191-90 |
100 |
200 |
None |
10 Acre |
|
06S-92W-12 |
SW¼ |
191-90 |
100 |
200 |
None |
10 Acre |
|
06S-92W-13 |
N½ |
191-69 |
100 |
200 |
None |
10 Acre |
|
06S-92W-13 |
SE¼, N½ SW¼ |
191-55 |
100 |
200 |
None |
10 Acre |
|
06S-92W-14 |
N½ |
525-2 |
100 |
200 |
None |
10 Acre |
10. 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.
11. 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.
12. Ursa 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, the Commission should enter an order to establish an approximate 160-acre drilling and spacing unit for Section 12, Township 6 South, Range 92 West, 6th P.M., and approve 10-acre bottomhole density 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. An approximate 160-acre drilling and spacing unit for the below-described lands, is hereby established, and 10-acre bottomhole density within the unit, is hereby approved, for the production of oil, gas and associated hydrocarbons from the Williams Fork and Iles Formations, with such wells to be drilled either vertically or directionally from no more than one pad located on a given quarter-quarter section, without exception being granted by the Director:
Township 6 South, Range 92 West, 6th P.M.
Section 12: NW¼
2. All wells drilled to the Williams Fork and Iles Formations shall be located downhole no closer than 100 feet from the boundaries of the unit, unless such boundary abuts or corners lands for which the Commission has not at the time of the well permit application granted the right to drill 10-acre density wells, in which event the wells shall be located downhole no closer than 200 feet to such abutting or cornering lands, without exception being granted by the Director.
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 35 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 21st day of February, 2014, as of January 27, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary