BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE APPLICATION OF WPX ENERGY ROCKY MOUNTAIN, LLC, FOR AN ORDER TO APPROVE THE EQUIVALENT OF ONE WELL PER 10 ACRE WELL DENSITY FOR CERTAIN LANDS IN SECTIONS 13, 23 AND 24, TOWNSHIP 2 SOUTH, RANGE 98 WEST, 6TH P.M., FOR THE WILLIAMS FORK AND ILES FORMATIONS, SULPHUR CREEK FIELD, RIO BLANCO COUNTY, COLORADO |
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CAUSE NO. 527
DOCKET NO. 1401-AW-04
ORDER NO. 527-12
CORRECTED |
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 approve the equivalent of one well per 10 acres well density for certain portions of Sections 13, 23 and 24, Township 2 South, Range 98 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.
FINDINGS
The Commission finds as follows:
1. WPX Energy Rocky Mountain, LLC (“WPX” 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 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. Sections 13, 23 and 24, Township 2 South, Range 98 West, 6th P.M. are subject to Rule 318.a. for the Williams Fork and Iles Formations.
5. On November 27, 2013, WPX, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order approving the equivalent of one well per 10 acres well density for the below-described lands (“Application Lands”), for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations, with the bottomhole location of any permitted well located anywhere on the Application Lands but no closer than 100 feet from the lease or unit boundaries; however, in cases where the lands abut or corner lands for which the Commission has not at the time of permit application granted the right to drill 10-acre density Williams Fork Formation and Iles Formation wells, the permitted well should be located downhole no closer than 200 feet from the lease or unit boundaries, without exception being granted by the Director:
Township 2 South, Range 98 West, 6th P.M.
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Section 13: |
All (Lots 1-12, SW¼) |
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Section 23: |
NE¼ NE, S½ NE¼, and N½ S½ |
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Section 24: |
N½ |
Approximately 1204.22 acres
6. Applicant further states that the authorized wells will be drilled from the surface either vertically or directionally using existing location in adjacent lands or from no more than one pad per quarter quarter section (or lots or parcels approximately equivalent thereto).
7. On January 13, 2014, WPX, 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 Maxwell G. Faith, Senior Landman for WPX, showed that WPX owns substantial leasehold interests in the Williams Fork and Iles Formations underlying the Application Lands.
9. Geologic testimony and exhibits submitted in support of the Application by Renee M. Wild, Geoscientist for WPX, showed that the Williams Fork and Iles Formations is underlying the Application Lands and is Upper Cretaceous in age, with the Williams Fork Formation being comprised of sandstones deposited in meandering to braided stream depositional environments, shales and coals. The Williams Fork Formation is laterally discontinuous and naturally fractured with microdarcy permeability and 6 to 10% porosity which will not produce economic volumes of gas unless it is fracture stimulated. The Iles Formation contains sandstones which may have been deposited in a lower coastal plain environment with tidal influences with the predominant depositional environment being meandering streams. Like the Williams Fork Formation above it, the Iles Formation has microdarcy permeability and 6 to 10% porosity which will not produce economic volumes of gas unless it is fracture stimulated.
10. Engineering testimony and exhibits submitted in support of the Application by Samuel T. Burt, Senior Petroleum Engineer for WPX, showed that 10-acre wells will perform optimally for the Williams Fork and Iles Formations underlying the Application Lands and prevent waste while efficiently and economically draining the reserves. Further testimony also showed the Williams Fork and Iles Formations are a common source of supply.
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. WPX 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 approve the equivalent of one well per 10 acres well density for certain portions of Sections 13, 23 and 24, Township 2 South, Range 98 West, 6th P.M., for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations.
ORDER
IT IS HEREBY ORDERED:
1. That the
equivalent of one well per 10 acres well density for the below-described lands,
is hereby approved, for the production of gas and associated hydrocarbons from
the Williams Fork and Iles Formations, with the bottomhole location of any
permitted well located anywhere on the Application Lands but no closer than 100
feet from the lease or unit boundaries; however, in cases where
the lands abut or corner lands for which the Commission has not at the time of
permit application granted the right to drill 10-acre density Williams Fork
Formation and Iles Formation wells, the permitted well shall be located
downhole no closer than 200 feet from the lease or unit boundaries, without
exception being granted by the Director:
Township 2 South, Range 98 West, 6th P.M.
|
Section 13: |
All (Lots 1-12, SW¼) |
|
Section 23: |
NE¼ NE, S½ NE¼, and N½ S½ |
|
Section 24: |
N½ |
Approximately 1204.22 acres
2. All authorized wells will be drilled from the surface either vertically or directionally using existing location in adjacent lands or from no more than one pad per quarter quarter section (or lots or parcels approximately equivalent thereto).
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.
CORRECTED this 10th day of February, 2017, as of January 27, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Julie Murphy, Secretary