BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE RULES AND ) CAUSE NO. 1
REGULATIONS OF THE COLORADO OIL )
AND GAS CONSERVATION COMMISSION, ) ORDER NO. 1-93
WELD COUNTY, COLORADO )
This matter came on for hearing before the Commission on March 19, 2001 at 9:30 a.m. in the City Council Chambers, Longmont City Hall Building, 350 Kimbark, Longmont, Colorado after giving Notice of Hearing, as required by law, on the application of TOP Operating Company for an order withdrawing the conditions placed administratively on certain drilling permits issued for certain lands in Township 2 North, Range 68 West, 6th P.M. and determining the Director’s authority to impose such conditions.
The Commission finds as follows:
1. TOP Operating Company (“TOP”), 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 the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.
4. On March 27, 2000, TOP filed with the Commission eight (8) Applications for Permit-to-Drill for the Evans #1, 2, 3, 4, 5, 6, 7 & 8 Wells, located on the following City of Longmont lands:
Township 2 North, Range 68 West, 6th P.M.
Section 7: NE¼ NE¼, NW¼ NE¼, SE¼ NE¼, SW¼ NE¼, C NE¼, NE¼ SE¼, SE¼ SE¼
Section 8: NW¼ SW¼
5. On September 29, 2000, the Colorado Oil and Gas Conservation Commission (“COGCC”) Director issued approved permits to TOP with the condition that the Evans #1, 2, 3, 4, 5, 6 & 8 Wells be directionally drilled from two designated surface wellsites.
6. On October 18, 2000, TOP, by its attorney, filed with the Commission a verified application for an order withdrawing the conditions placed administratively on the seven (7) drilling permits requiring directional drilling based on the belief that the COGCC Director has no statutory authority to resolve surface use conflicts by requiring directional drilling.
7. On November 3, 2000, the City of Longmont (“Longmont”), by its attorney, filed with the Commission an application to intervene in the matter and for an order determining the lands described above constitute a designated outside activity area in accordance with high density area Rule 603.b.
8. On November 17, 2000, the Colorado Oil and Gas Association (“COGA”) filed with the Commission a Motion to Intervene.
9. After hearing arguments from TOP, Longmont and COGA at the December 4, 2000 hearing, the Commission voted to narrow the hearing on TOP’s application solely to the issue of the Director’s authority to impose directional drilling conditions on permits-to-drill in the absence of a hearing and to hear Longmont’s request to designate the lands an outside activity area as a separate matter.
10. On March 19, 2001 the Commission heard legal arguments on the issue of the Director’s authority to impose directional drilling conditions on permits-to-drill presented by Erika Enger, attorney for TOP, Phillip Barber, attorney for Longmont, and Ken Wonstolen, attorney for COGA.
11. Pursuant to Rule 510., Gene Burk, an attorney who is a leasehold owner in the subject lands, made statements regarding the economic impact caused by directional drilling requirements.
12. Pursuant to Rule 510., David Siple, Vice President of Patina Oil and Gas who owns a working interest in the subject lands, made statements regarding the frequency with which his company deals with the issue of surface owners’ rights versus mineral owners’ rights, and his concern about the precedent that the decision from this hearing may set.
13. After questioning the parties and deliberating, the Commission found that due to the absence of Colorado Oil and Gas Conservation Rules and Regulations addressing when directional drilling conditions may be imposed on permits-to-drill, the Director does not have statutory or regulatory authority to administratively impose such conditions absent a hearing.
NOW THEREFORE IT IS ORDERED, that the Colorado Oil and Gas Conservation hereby finds that the Director does not have the statutory or regulatory authority to impose directional drilling conditions on permits-to-drill absent a hearing.
IT IS FURTHER ORDERED, that the permits-to-drill issued to TOP Operating Company on September 29, 2000 for the Evans #1, 2, 3, 4, 5, 6 & 8 Wells located in Sections 7 and 8, Township 2 North, Range 68 West, 6th P.M. are hereby rescinded:
IT IS FURTHER ORDERED, that the provisions contained in the above orders shall become effective forthwith.
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.
ENTERED this day of 2001, as of March 19, 2001.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF Colorado Oil & Gas Commission
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
April 4, 2001