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

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE WILLIAMS FORK AND ILES FORMATIONS (INCLUDING THE SEGO SANDSTONE), SURPHUR CREEK FIELD, RIO BLANCO COUNTY, COLORADO

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CAUSE NO. 527 DOCKET NO. 1412-AW-29 ORDER NO. 527-17

REPORT OF THE COMMISSION

            The Commission heard this matter on December 15, 2014, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to approve the equivalent of one well per 10 acres well density for certain lands located in Township 1 South, Range 98 West, 6^th P.M., for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations (including the Sego Sandstone).

FINDINGS

The Commission finds as follows:

1.         WPX Energy Rocky Mountain, LLC (Operator No. 96850) (“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. provides that for wells drilled in excess of 2,500 feet in depth shall be located not less than 600 feet from any lease line and not closer than 1,200 feet from any other producible of drilling oil or gas well when drilling to the same source of supply. 

5.         On October 16, 2014 (Amended November 13, 2014), WPX, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to approve 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 (including the Sego Sandstone), with the productive interval of the wellbore to be located anywhere upon the Application Lands but no closer than 100 feet from the lease boundaries, however, in cases where the 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 density Williams Fork Formation and Iles Formation wells, the permitted well should be located downhole no closer than 200 feet from the lease boundaries, without exception being granted by the Director.

Township 1 South, Range 98 West, 6^th P.M.

Section 8:        E½ NE¼, S½ S½, and N½ SE¼ (320.00 acres)

Section 9:        N͢½ N½, S½ NW¼, and S½ (560.00 acres)

Section 10:      NW¼ NE¼, N½ NW¼, N½ SW¼, SW¼ SW¼, and SE¼                                                              SE¼ (280.00 acres)

Section 13:      Lots 9 thru 24 (603.42 acres)

Section 14:      Lots 16 thru 23 (306.83 acres)

Section 15:      Lots 1 thru 13 (510.56 acres)

6.         Applicant states that the approved wells shall be located on no more than one well pad per quarter quarter section (or lots or parcels approximately equivalent thereto), without exception from the Director.

7.         On November 24, 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 Faith, Senior Landman for WPX, showed that the Applicant is an owner with the right to drill wells in the Application Lands.

9.         Geologic testimony and exhibits submitted in support of the Application by Renee M. Wild, Geoscientist for WPX, showed that the Mesaverde Group underlying the Application Lands is Upper Cretaceous in age and consists of the Williams Fork, Iles and Sego Formations, with the Williams Fork Formation being comprised of sandstones deposited in meandering to braided stream depositional environments, shales and coals. 

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. Further testimony also supported the commingling of Williams Fork and Iles Formations production. 

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 lands located in Township 1 South, Range 98 West, 6^th P.M., for the production of gas and associated hydrocarbons from the Williams Fork and Iles Formations (including the Sego Sandstone).

ORDER

IT IS HEREBY ORDERED:

1.         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 (including the Sego Sandstone):

Township 1 South, Range 98 West, 6^th P.M.

Section 8:        E½ NE¼, S½ S½, and N½ SE¼ (320.00 acres)

Section 9:        N͢½ N½, S½ NW¼, and S½ (560.00 acres)

Section 10:      NW¼ NE¼, N½ NW¼, N½ SW¼, SW¼ SW¼, and SE¼                                                              SE¼ (280.00 acres)

Section 13:      Lots 9 thru 24 (603.42 acres)

Section 14:      Lots 16 thru 23 (306.83 acres)

Section 15:      Lots 1 thru 13 (510.56 acres)

2.         The productive interval of the wellbore to be located anywhere upon the Application Lands but no closer than 100 feet from the lease boundaries, however, in cases where the 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 density Williams Fork Formation and Iles Formation wells, the permitted well should be located downhole no closer than 200 feet from the lease boundaries.

3.         The proposed wells shall be located 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).

IT IS FURTHER ORDERED:

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 8^th day of January, 2015, as of December 15, 2014.          

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By__________________________________

Jill Dorancy, Acting Secretary