BEFORE THE OIL
AND GAS CONSERVATION COMMISSION
OF
THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF )
COASTAL OIL & GAS CORPORATION FOR AN ) CAUSE NO. 311
ORDER ALLOWING ADDITIONAL WELLS IN )
CERTAIN DRILLING AND SPACING UNITS ) DOCKET NO. ____
COVERING THE DAKOTA FORMATION IN )
THE DOUGLAS CREEK - SOUTH FIELD, )
RIO BLANCO COUNTY, COLORADO )
VERIFIED
APPLICATION
COMES NOW, the
Applicant, Coastal Oil & Gas Corporation, by and through its attorneys,
Poulson, Odell & Peterson, LLC, and makes application to the Oil and Gas
Conservation Commission of the State of Colorado for an order to permit up to
four wells to be drilled in existing drilling and spacing units established for
the production of gas and associated hydrocarbons from the Dakota Formation in
the Douglas Creek - South Field located in Rio Blanco County, Colorado. In support thereof, Coastal Oil & Gas
Corporation states as follows:
I
Applicant is the owner
of certain oil and gas leases and the operator of wells in the Dakota Formation
in the Douglas Creek - South Field in Rio Blanco County,
Colorado described as follows:
Township 4 South,
Range 102 West, 6th P.M.
Section 11: All
Section 12: All
These lands are referred to as the
Application Lands.
II
By Cause No. 311, Order
No. 311-2 dated February 17, 1978, the Oil and Gas Conservation Commission
determined that the Dakota Formation constitutes a common source of supply of
gas and associated hydrocarbons in the Application Lands, and established
drilling and spacing units for production of gas and associated hydrocarbons
from the Dakota Formation. The order
establishes spacing units of 640-acres consisting of a section of land
according to the government survey for the production of gas and associated
hydrocarbons from the Dakota Formation.
At the time Cause No.
311, Order No. 311-2 was entered, two wells had been drilled upon the
Application Lands. Each of those wells
was identified as the permitted well for the spacing unit on which it was
located. In particular, the order
states that the Well No. 12 South Douglas Creek Government located in the
SE/4NE/4 of Section 11, Township 4 South, Range 102 West, 6th P.M. is the
permitted well for Section 11 and that the Well No. 12-2 Red Rock Canyon -
Superior Fee located in the SW/4NE/4 of Section 12, Township 4 South, Range 103
West, 6th P.M. is the permitted well for Section 12.
III
Subsequent operation of
the producing wells in the Dakota Formation in the Application Lands has
provided geological and engineering evidence to the effect that in the
Application Lands one well will not efficiently and economically drain gas and
associated hydrocarbons in the Dakota Formation in an area of 640 acres. Applicant requests that four wells be
permitted to be completed and produced for gas and associated hydrocarbons in
the Dakota Formation in each 640-acre drilling and spacing unit in the
Application Lands. Applicant alleges
that four wells for gas and associated hydrocarbons in each such drilling and
spacing unit will efficiently and economically drain the Dakota Formation; that
each such drilling and spacing unit is not smaller than the maximum area that
can be efficiently and economically drained by four wells in the Dakota
Formation; and that the correlative rights of all parties will be protected by
allowing four wells to be completed for gas and associated hydrocarbons in the
Dakota Formation in each such drilling and spacing unit. Applicant also alleges that the additional
wells in each drilling and spacing unit may be drilled in a manner consistent
with the protection of public health, safety, and welfare.
IV
Cause No. 311, Order No.
311-2 does not identify any permitted locations for the wells to be drilled in
each drilling and spacing unit for production of gas and associated
hydrocarbons from the Dakota Formation in the Application Lands. Applicant requests that each of the two
existing wells in the Application Lands be designated as a permitted well in
the spacing unit in which the well is located.
Applicant also requests that any additional wells be located in
accordance with the provisions of Rule 318 of the Rules and Regulations of the
Oil and Gas Conservation Commission.
V
The Application Lands
include areas with substantial topographical relief. Applicant requests the Commission to authorize the Director, in
his discretion, to grant administrative exceptions to well locations for
topographic reasons.
VI
To prevent waste, to
protect correlative rights, to ensure the proper and efficient development of
the Dakota Formation in the Application Lands, and to assure the greatest
ultimate recovery of gas and associated hydrocarbon substances from the Dakota
Formation in the Application Lands, Applicant requests that after notice and
hearing, as provided by law, the Commission issue its order providing that, at
the option of the operator, four wells be allowed to be drilled and completed
on each 640 acre drilling and spacing unit in the Application Lands; that each
of the two existing wells in the Application Lands be designated as one of the
permitted wells in the spacing unit in which the well is located; that any
additional wells be located in accordance with the provisions of Rule 318 of
the Rules and Regulations of the Oil and Gas Conservation Commission; and that
the Director be given the authority, in his discretion, to grant administrative
exceptions to permitted well locations for topographical reasons.
VII
Applicant states that to
the best of its information and belief Exhibit A attached hereto is the list of
the names of "owners" in the Application Lands required to be
notified in accordance with Commission Rule 507.
VIII
WHEREFORE, Applicant
respectfully requests that this matter be set for hearing by the Commission;
that notice hereof be given as required by law; and that upon hearing this
Commission issue its order granting this Application as requested. Applicant
further requests that the Commission in its order grant such other provisions
as the Commission may find to be necessary or desirable in the cause.
DATED this 8th day of
March, 2000.
Respectfully submitted,
COASTAL OIL & GAS
CORPORATION
BY:________________________________
Carleton L. Ekberg, Esq.
Poulson, Odell &
Peterson, LLC
1775 Sherman Street,
Suite 1400
Denver, Colorado 80203
(303) 861-4400
Applicant's Address:
Coastal Oil & Gas Corporation
Nine Greenway Plaza
Suite 1400
Houston, Texas 77046-0995
douglascreek.app
VERIFICATION
STATE OF
)
) ss.
COUNTY OF )
_____________, ______________
of Coastal Oil & Gas Corporation, upon oath, deposes and says that he has
read the foregoing Verified Application before the Oil and Gas Conservation
Commission of the State of Colorado, and states that the matters contained
therein are true to the best of his knowledge and belief.
_________________________
Subscribed to and sworn
to before me this _____ day of March __, 2000 by ____________________, __________________ of Coastal Oil & Gas
Corporation.
My Commission expires: _________________________
Notary Public
______________________ Address__________________
_________________________
EXHIBIT
A
ATTACHED
TO VERIFIED APPLICATION OF
COASTAL
OIL & GAS CORPORATION
CAUSE
NO. 311
DAKOTA
FORMATION
RIO
BLANCO COUNTY, COLORADO