BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND
ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN AN UNNAMED FIELD,
MORGAN AND WELD COUNTIES, COLORADO |
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CAUSE NO. 539
ORDER NO. 539-2
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REPORT OF THE COMMISSION
The Commission heard this matter on August 20, 2012, at the offices of the
Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver,
Colorado, upon application for an order to establish fourteen approximate
640-acre exploratory drilling and spacing units for
Sections 1, 2, 11, and 12, Township 6 North,
Range 59 West, 6th P.M., Sections 4 through 7, Township 6 North,
Range 58 West, 6th P.M., and Sections 28 through 33, Township 7
North, Range 58 West, 6th P.M., and approve up to two
horizontal wells within each unit, for the production of oil, gas and associated
hydrocarbons from the Greenhorn Formation.
FINDINGS
The Commission finds as follows:
1.
Vecta Oil & Gas, Ltd. (“Vecta” 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 1, 2, 11, and 12, Township 6 North, Range 59 West, 6th P.M.,
Sections 4 through 7, Township 6 North, Range 58 West, 6th P.M., and
Sections 28 through 33, Township 7 North, Range 58 West, 6th P.M. are
subject to Rule 318.a. for the Greenhorn Formation.
5.
On June 20, 2012, Vecta, by its attorneys, filed with the Commission
pursuant to § 34-60-116 C.R.S., a verified application (“Application”) for an
order to establish fourteen approximate 640-acre exploratory drilling and
spacing units for the below-described lands (“Application Lands”), and approve
up to two horizontal wells within each unit, for the production of oil, gas and
associated hydrocarbons from the Greenhorn Formation, with the treated interval
of the permitted wellbore to be no closer than 600 feet from the unit boundaries
and no closer than 1,200 feet from the
treated interval of any other wellbore located in the unit, without exception
being granted by the Director:
Township 6 North, Range 59 West, 6th P.M., Morgan County
Section 1:
All
Section 2:
All
Section 11:
All
Section 12:
All
Township 6 North, Range 58 West, 6th P.M., Morgan County
Section 4:
All
Section 5:
All
Section 6:
All
Section 7:
All
Township 7 North, Range 58 West, 6th P.M., Weld County
Section 28:
All
Section 29:
All
Section 30:
All
Section 31:
All
Section 32:
All
Section 33:
All
6.
On August 7, 2012, Vecta, 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.
7.
Land testimony and exhibits submitted in support of the Application by
Steve McPherson, Senior Landman for Vecta, showed Vecta has a mineral interest
in the Application Lands, that it has the legal right to propose and drill wells
on the Application Lands, and that best efforts and standard industry practices
were used to identify and notice interested parties of the Application.
8.
Geologic testimony and exhibits submitted in support of the Application
by Steven M. Goolsby, Senior Geologist
working for Vecta, showed the
Greenhorn Formation has a very limited production history, requiring the
creation of exploratory drilling and spacing units.
9.
Engineering testimony and exhibits submitted in support of the
Application by H. Richard Pate, Vice President of Engineering for Vecta,
estimated the original oil in place (“OOIP”) at 7.7 MMBO per 640-acres, by
which, using present horizontal drilling and completion techniques, could
reasonably result in recoverable reserves (“EUR”) of 270 MBOE (250 MBO, 20 MMCF)
from a 4200 to 4500 lateral wellbore in the Greenhorn Formation. The estimated recovery of 270 MBOE is
3.5% of the calculated OOIP per 640-acres.
Testimony concluded the Applicant or other operator should have the
option of designing its drilling program so as to most efficiently and
effectively explore for, encounter and establish production from the Greenhorn
Formation.
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.
Vecta agreed to be bound by oral order of the Commission.
12.
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 fourteen approximate
640-acre exploratory drilling and spacing units for
Sections 1, 2, 11, and 12, Township 6 North,
Range 59 West, 6th P.M., Sections 4 through 7, Township 6 North,
Range 58 West, 6th P.M., and Sections 28 through 33, Township 7
North, Range 58 West, 6th P.M., and approve up to two
horizontal wells within each unit, for the production of oil, gas and associated
hydrocarbons from the Greenhorn Formation.
ORDER
NOW, THEREFORE IT IS ORDERED, that fourteen approximate 640-acre exploratory
drilling and spacing units for the below-described lands, are hereby
established, and up to two horizontal wells within each unit, are hereby
approved, for the production of oil, gas and associated hydrocarbons from the
Greenhorn Formation, with the treated interval of the permitted wellbore to be
no closer than 600 feet from the unit boundaries
and no closer than 1,200 feet from the treated interval of any other wellbore
located in the unit, without exception being granted by the Director:
Township 6 North, Range 59 West, 6th P.M., Morgan County
Section 1:
All
Section 2:
All
Section 11:
All
Section 12:
All
Township 6 North, Range 58 West, 6th P.M., Morgan County
Section 4:
All
Section 5:
All
Section 6:
All
Section 7:
All
Township 7 North, Range 58 West, 6th P.M., Weld County
Section 28:
All
Section 29:
All
Section 30:
All
Section 31:
All
Section 32:
All
Section 33:
All
IT IS FURTHER ORDERED,
that the provisions contained in the above order shall become effective
immediately.
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 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 August, 2012, as of
August 20, 2012.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary
Dated: August 24, 2012