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 FORMATION, PICEANCE HORIZONTAL FIELD, RIO BLANCO COUNTY, COLORADO

 

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CAUSE NO. 547

 

DOCKET NO. 160300149

 

TYPE: SPACING

 

ORDER NO. 547-22

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on March 7, 2016, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to establish an approximate 960-acre drilling and spacing unit for portions of Sections 1, 2, 11, and 12, Township 2 South, Range 100 West, 6th P.M., and authorize the drilling of one well within the proposed unit, being the existing CBU #DHN8B-1 A112100 Well (API No. 05-103-11886), for the production of oil, gas, and associated hydrocarbons from the Mancos Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Encana Oil & Gas (USA) Inc., acting by and through its authorized agent, Encana Services Company, Ltd., Operator No. 100185  (“Encana” or “Applicant”), 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. requires that, on unspaced lands, 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.

 

5.           On January 7, 2016, Encana, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 960-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to authorize the drilling of one well within the proposed unit, being the existing CBU #DHN8B-1 A112100 Well (API No. 05-103-11886), for the production of oil, gas and associated hydrocarbons from the Mancos Formation:

 

                                    Township 2 South, Range 100 West, 6th P.M.
                                    Section 1:        W½

                                    Section 2:        E½

                                    Section 11:      NE¼

                                    Section 12:      NW¼

 

6.         On February 12, 2016, Encana, 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.         On February 26, 2016, Encana, by its attorneys, and the Bureau of Land Management (“BLM”) agreed that the drilling and spacing unit contains federal leased and/or unleased minerals.  As such, Encana agrees to submit a Communitization Agreement (“CA”) to the BLM for the CBU #DHN8B-1 Well, being the authorized well within the unit, within 90 days of the entry of this order.

 

            8.         Land testimony and exhibits submitted in support of the Application by Judene Tatham, Sr. Land Negotiator for Encana, showed that Encana holds oil and gas leasehold interests and has a right to drill in the Application Lands.      

 

9.         Geologic testimony and exhibits submitted in support of the Application by Zachary Wessel, geologist for Encana, showed that the Niobrara portion of the Mancos group  is present throughout the Application Lands, and that the Niobrara Formation ranges from 2000-2700 feet thick. 

 

10.       Engineering testimony and exhibits submitted in support of the Application by Jeff Bentley, Reservoir Engineer for Encana, showed that the drainage area for the CBU #DHN8B-1 A112100 Well is approximately 165 acres for the Mancos Formation Mid Pelletal Zone Interval and that an approximate 960-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by one well producing oil, gas and associated hydrocarbons from the Mancos Formation.

 

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.       Encana 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 960-acre drilling and spacing unit for portions of Sections 1, 2, 11, and 12, Township 2 South, Range 100 West, 6th P.M., and authorize the drilling of one well within the proposed unit, being the existing CBU #DHN8B-1 A112100 Well (API No. 05-103-11886), for the production of oil, gas, and associated hydrocarbons from the Mancos Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 960-acre drilling and spacing unit for the below-described lands is hereby established, and the drilling of one well within the proposed unit is authorized, being the existing CBU #DHN8B-1 A112100 Well (API No. 05-103-11886) for the production of oil, gas and associated hydrocarbons from the Mancos Formation:

 

                                                Township 2 South, Range 100 West, 6th P.M.
                                                Section 1:        W½

                                                Section 2:        E½

                                                Section 11:      NE¼

                                                Section 12:      NW¼

 

2.         Encana shall to submit a CA to the BLM for the CBU #DHN8B-1 Well, being the authorized well within the unit, within 90 days of the entry of this order.

 

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 March, 2016, as of March 7, 2016.   

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By__________________________________

Julie Murphy, Secretary