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 MANCOS, NIOBRARA, FRONTIER, MOWRY, AND DAKOTA FORMATIONS, GRAND VALLEY FIELD, GARFIELD COUNTY, COLORADO

 

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CAUSE NO. 547

 

DOCKET NO. 150400217

 

ORDER NO. 547-21

 

TYPE: POOLING

REPORT OF THE COMMISSION

 

The Commission heard this matter on September 14, 2015, at the Western State Colorado University, University Center, South Ballroom, 600 North Adams Street, Gunnison, Colorado, upon application for an order to pool all interests in an approximate 1,132-acre drilling and spacing unit established for Section 28 and Section 33, Township 6 South, Range 96 West, 6th P.M. for the drilling of the GM 728-14-33-HN1 Well, for the development and operation of the Mancos (including the Sego member), Niobrara, Frontier, Mowry, and Dakota Formations.

 

                                                            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.         On July 29, 2014, the Commission entered Order No. 547-9, which established an approximate 1132-acre exploratory drilling unit for the Deep Formations and approved up to 40 horizontal, vertical or directional wells within the unit with the productive interval of the wellbore to be located no closer than 600 feet from the eastern and western unit boundaries and not less than 300 feet from the northern and southern unit boundaries, and no closer than 300 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director.

 

5.         On February 11, 2015, WPX, by its attorneys, filed a verified Application (“Application”) pursuant to §34-60-116, C.R.S., for an order to pool all interests in an approximate 1,132-acre drilling and spacing unit established for the below-described lands (“Application Lands”), for the development and operation of the Mancos (including the Sego member), Niobrara, Frontier, Mowry, and Dakota Formations (“Deep Formations”), and to subject any nonconsenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., for the drilling of the GM 728-14-33-HN1 Well (API No. 05-045-22431) (“Well”):

 

Township 6 South, Range 96 West, 6th P.M.

Section 28:      Lots 5 thru 13, S½NW¼,                                                                    NE¼SW¼ (a.k.a. S½N½, S½)

 

Section 33:      All (Lots 1 thru 12, NW¼NW¼,                                                          SE¼NW¼, SW¼NE¼, NW¼ SE¼)

 

            6.         On March 19, 2015, Encana Oil & Gas (USA) Inc. (“Encana” or “Protestant”) protested the Application and requested the Commission deny pooling. 

 

7.         On August 5, 2015, Encana withdrew its protest and Applicant, 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 Christopher M. Walsh, Sr. Staff Landman for WPX, showed that Applicant has not been able to effect voluntary pooling of the interests within the approximate 1,132-acre exploratory drilling unit established for the Application Lands. 

                                                 

9.         Applicant confirmed that Commission Rules 530.b. and c. do not apply as there are no working interest owners or unleased mineral interest owners subject to the Application, and Applicant is not seeking cost recovery pursuant to §34-60-116(7), C.R.S.

 

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.       WPX agreed to be bound by oral order of the Commission.

 

12.       Based on the facts stated in the verified Application, and based on the Hearing Officer review of the Application under Rule 511., the Commission should enter an order to pool all interests in an 1,132-acre drilling and spacing unit established for the Application Lands, for the development and operation of the Deep Formations.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, all interests in an approximate 1,132-acre drilling and spacing unit established for the below-described lands are hereby pooled, for the development and operation of the Deep Formations, effective as of the date of the Application, for the drilling of the GM 728-14-33-HN1 Well (API No. 05-045-22431):

 

Township 6 South, Range 96 West, 6th P.M.

Section 28:      Lots 5 thru 13, S½NW¼,                                                                    NE¼SW¼ (a.k.a. S½N½, S½)

 

Section 33:      All (Lots 1 thru 12, NW¼NW¼,                                                          SE¼NW¼, SW¼NE¼, NW¼ SE¼)

 

2.         The production obtained from the drilling and spacing unit shall be allocated to each owner in the unit on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within the drilling and spacing unit; each owner of an interest in the drilling and spacing unit shall be entitled to receive its share of the production of the Well located on the drilling and spacing unit applicable to its interest in the drilling and spacing unit.

 

3.         Any party seeking the cost recovery provisions of §34-60-116(7), C.R.S., shall first comply with subsection (d) and Commission Rule 530 for any subsequent well(s).

 

4.         Nothing in this order is intended to conflict with §34-60-116, C.R.S., as amended.  Any conflict that may arise shall be resolved in favor of the statute.

 

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 __ day of September, 2015, as of September 14, 2015.

           

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By____________________________________

Julie Murphy, Secretary