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 IN THE FORT COLLINS FIELD, LARIMER COUNTY, COLORADO

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CAUSE NO. 84

 

ORDER NO. 84-2

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission on January 16, 1978 at 9 a.m., in Room 110, State Centennial Building, Denver, Colorado, and was continued to February 17, 1978, after giving Notice of Hearing as required by law, on the application of Russell A. Pomeroy, for an order approving a certain Unit Agreement providing for involuntary unit operations of the Muddy formation reservoir underlying the Fort Collins Unit Area.

FINDINGS

The Commission finds as follows:

1. That due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

2. That 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.

3. That the Muddy formation reservoir encountered in the Well No. 1-A Maim, located in the NESW Section 19, Township 8 North, Range 68 West, 6th P.M., Larimer County, Colorado, between the approximate depths of 4487 and 4618 feet sub-surface, has been defined and determined by drilling as underlying the following described lands in Larimer County, Colorado, to-wit:

Township 8 North, Range 68 West, 6th P.M.

 

 

Section 7:

SE (160-acres)

Section 8:

SWNW and WSW lying south of southwest boundary of reservoir No. 6 (85-acres )

Section 17:

WW (160-acres)

Section 18:

E, SESW (360-acres)

Section 19:

Lot 1 (69.44-acres), Lot 2 (69.59-acres), E, EW (all 619.03-acres)

Section 20:

WNW (80-acres)

Section 30:

Lot 1 (69.72-acres), Lot 2 (70.04-acres), E, EW (all 619.76-acres)


 

Section 31:

Lot 1 (70.52-acres), and ENW and NE less 33-acres south of southwest boundary of Long Pond (277.52-acres)

 

 

Containing 2,361.31-acres more or less

and that said reservoir constitutes a common source of supply, and that such lands should hereafter be referred to as the Fort Collins Muddy Formation Unit Area.

4. That Applicant, Russell A. Pomeroy, made diligent but unsuccessful attempts to create a voluntary unit operation.

5. That the Unit Agreement as presented by Applicant is necessary to increase the ultimate recovery of oil and liquid hydrocarbons from said reservoir, and that the terms provided therein are just and reasonable to all interests contained within said Muddy Formation Unit Area.

6. That testimony presented at the hearing stated that said Unit Agreement has been approved in writing by those persons who, under the agreement, will be required to pay at least eighty percent (80%) of the costs of the unit operation, and also by the owners of at least eighty percent (80%) of the production or proceeds attributable to royalty, overriding royalty and production payments.

ORDER

NOW, THEREFORE, IT IS ORDERED, that (1) [sic] The unit Agreement covering lands in the Fort Collins Muddy Formation Unit Area, which agreement is attached to, and made a part of the original order of this Commission on file in the office of the Commission, is approved as being in the public interest for conservation.

2. The Muddy formation reservoir, common source of supply, underlies the following described lands in Larimer County, Colorado, to-wit:

Township 8 North, Range 68 West, 6th P.M.

 

 

Section 7:

SE (160-acres)

Section 8:

SWNW and WSW lying south of southwest boundary of reservoir No. 6 (85-acres )

Section 17:

WW (160-acres)

Section 18:

E, SESW (360-acres)

Section 19:

Lot 1 (69.44-acres), Lot 2 (69.59-acres), E, EW (all 619.03-acres)

Section 20:

WNW (80-acres)

Section 30:

Lot 1 (69.72-acres), Lot 2 (70.04-acres), E, EW (all 619.76-acres)


 

Section 31:

Lot 1 (70.52-acres), and ENW and NE less 33-acres south of southwest boundary of Long Pond (277.52-acres)

 

 

Containing 2,361.31-acres more or less

and such area shall hereafter be known as the Fort Collins Muddy Formation Unit Area.

3. The provisions contained in said Unit Agreement as they pertain to:

a. The description of the pool to be so operated;

b. The nature of said operation;

c. The allocation to the separately owned tracts in the Muddy Formation Unit Area of all the oil and liquid hydrocarbons that are produced from said Muddy Formation Unit Area and are saved;

d. The provision for the credits and charges to be made in the adjustment among the owners in the Fort Collins Muddy Formation Unit Area for their respective investments in wells, tanks, pumps, machinery, materials, and equipment contributed to the Unit operations;

e. The provision providing how the costs of Unit operations, including capital investments, shall be determined and charged to the separately owned tracts, and how said costs shall be paid, including the provision providing when, how, and by whom the Unit production allocated to an owner who does not pay the share of the cost of Unit operations charged to such owner, or the interest of such owners, may be sold and the proceeds applied to the payment of such costs;

f. The provision for carrying or otherwise financing any person who elects to be carried or otherwise financed, allowing a reasonable interest charge for such service payable out of such persons share of the production;

g. The provision for the supervision and conduct of the Unit operations, in respect to which each person shall have a vote with a value corresponding to the percentage of the costs of Unit operations chargeable against the interest of such person; and

h. The time when the Unit operations shall commence, and the manner in which, and the circumstances under which the Unit operations shall terminate,

are just and reasonable, and are incorporated herein as the Commissions plan of involuntary unit operations for such lands.

IT IS FURTHER ORDERED, that approval of said Unit Agreement does not include any approval by the Commission for pressure maintenance, repressuring and secondary recovery operations.

IT IS FURTHER ORDERED, that the rules and regulations and orders contained herein shall become effective forthwith.

ORDERED this 17th day of February, 1978.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

 

 

By Frank J. Piro, Secretary