BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                 OF THE STATE OF COLORADO

 

IN THE MATTER OF THE APPLICATION OF               )

CALPINE NATURAL GAS COMPANY                            )           Cause No. 191

TO INCREASE WELL DENSITY IN THE                        )

MAM CREEK FIELD, MESAVERDE FORMATION,   )           Docket No.

GARFIELD COUNTY, COLORADO                                 )

 

                                                                 APPLICATION

 

Calpine Natural Gas Company (“Calpine”) by and through its attorneys, Welborn Sullivan Meck & Tooley, P.C., respectfully requests the Colorado Oil & Gas Conservation Commission (the “Commission”) allow additional wells to produce gas and associated hydrocarbons from the Mesaverde formation, including but not limited to the Cozzette and Corcoran formations, underlying the following lands (the “Lands”).

 

Township 6 South, Range 92 West, N.M.P.M.

Section 22:  All

 

In support of this Application, Calpine states as follows:

 

1.                  Calpine is authorized to do business in Colorado.

 

2.                  Calpine owns leasehold interests in the Lands.

 

3.                  By Order No. 191-3 dated August 18, 1982 and Order No. 191-4 dated March 10, 1994, the Commission established 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde formation, including, but not limited to the Cozzette and Corcoran formations, underlying the Lands and other lands, known as the Mam Creek Field.

 

4.                  Commission records indicate that one well was drilled in Section 22, T6S-R92W, the Friport 14-22 well.

 

5.                  Geological and engineering data acquired by Calpine, including production data from the Friport 14-22 well indicate that one well is not sufficient to efficiently and economically recover gas and associated hydrocarbons from the Mesaverde formation underlying an entire section.

 

6.                  The geologic and engineering data acquired by Calpine indicate that 40 acres is not smaller that the maximum area that can be efficiently and economically drained by one well.

 

7.                  In Order Nos. 191-3 and 191-4 the Commission reserved the right to alter, amend or repeal all or any part of its Order.  The Commission is authorized to change spacing orders if the evidence does not support the spacing established by a previous order.

 

8.                  Calpine proposes that the Commission amend Order Nos. 191-3 and 191-4 and allow additional wells to produce gas and associated hydrocarbons from the Mesaverde formation, including but not limited to the Cozzette and Corcoran formations.  Calpine also proposes that the Director of the Commission be allowed to grant exceptions to the well location requirement in accordance with Rule 318 or with previous orders in Cuase No. 191..

 

9.                  Calpine believes that granting this Application would (1) not be prejudicial to the owners of the Lands; (2) maintain and protect the correlative rights of all parties; (3) prevent or assist in preventing waste; (4) not result in an owner obtaining more than its just and equitable share of production from the pool; and (5) insure that gas and associated hydrocarbons from the Mesaverde formation, including but not limited to the Cozzette and Corcoran formations are efficiently and economically developed.

 

10.              Calpine is the only working interest owners in the Lands and there are no unleased mineral owners in the Lands.  Therefore, no additional notice is required for this application.

 

WHEREFORE, Calpine Natural Gas Company respectfully requests this matter be set for hearing, that notice be given as required by law, that an informal administrative hearing be conducted by an examiner in the event there are no protests to this Application, and that upon such hearing the Commission issue an order granting the Application requested herein.  Calpine further requests that the Commission in it order grant such other provisions as the Commission may find necessary or desirable in this matter.

 

Respectfully submitted this 20th day of December, 2001.

 

By:       Stephen J. Sullivan

821 17^th Street, Suite 500

Denver, CO 80203

Telephone:  303-830-2500

 

Applicant’s Address:

Calpine Natural Gas Company

1200 17^th Street, Suite 770

Denver, Colorado 80202

Telephone: (303) 359-9144

                                                                VERIFICATION

 

STATE OF COLORADO                   )

CITY AND                                          ) ss

COUNTY OF DENVER                     )

 

Gerald T. Sullivan, of lawful age, being first duly sworn upon oath, deposes and says that he is the Senior Landman for Calpine Natural Gas Company, that he has read the foregoing Application and that the matters therein contained are true to the best of his knowledge and belief.

 

 

EXHIBIT C

PROPOSED PLAN TO ADDRESS PROTECTION

 OF HEALTH, SAFETY AND WELFARE

 

 

IN THE MATTER OF THE APPLICATION OF                    )

CALPINE NATURAL GAS COMPANY L.P.                     )

FOR AN ORDER TO ALLOW INFILL DRILLING              )           CAUSE NO. 191

ON CERTAIN ESTABLISHED SPACED LANDS                )           DOCKET NO. 0202-AW-01

COVERING THE MESA VERDE FORMATION,                 )

MAM CREEK FIELD, GARFIELD COUNTY                       )

COLORADO

 

            The following shall apply to Applications for Permits-to-Drill wells where the surface well location is proposed to be sited on lands subject to COGCC jurisdiction in addition to the requirements of applicable existing COGCC rules and regulations.  Federal minerals comprise 400 acres out of the 640 acres included within the Application.

 

1)                  Prior to approving any Application for Permit-to-Drill, the Director shall conduct an onsite inspection if the operator and the fee surface owner have not entered into a surface use agreement or if the well location is proposed to be located in a subdivision which has been approved by Garfield County.

 

2)         The purpose of the onsite inspection is to identify any potential public health, safety and welfare or significant adverse environmental impacts within COGCC jurisdiction regarding the proposed surface location that may not be adequately addressed by COGCC rules or orders.  The onsite inspection shall not address matters of surface owner compensation, property value diminution, or any private party contractual issues between the operator and the surface owner.

 

3)         When the Director conducts onsite inspections hereunder, the Director shall invite the representatives of the surface owner, the operator and local governmental designee (“LGD”) to attend.  The Director shall attempt to select a mutually acceptable time for the representatives to attend.  The inspection shall be conducted within ten (10) days, or as soon as practicable thereafter, of either the date the LGD advises the Director in writing that the proposed surface well site location falls within an approved subdivision or the date the operator advises the Director in writing that a surface use agreement has not been reached with the surface owner.  If requested by the operator, the Director may delay the onsite inspection to allow for negotiation between the operator and surface owner or other parties.

 

4)         Following the onsite inspection, the Director shall apply appropriate site specific drilling permit conditions if necessary to prevent or mitigate public health, safety and welfare or significant adverse environmental impacts taking into consideration cost-effectiveness and technical feasibility and relevant geologic and petroleum engineering conditions as well as prevention of waste, protection of correlative rights, and promotion of development.

 

5)         Examples of the types of impacts and conditions that might be applied (if determined necessary by the Director in 4) above include (this list is not prescriptive or all inclusive):

 

a)                  visual or aesthetic impacts – moving the proposed surface well site location or access road to take advantage of natural features for screening; installing low profile artificial lift methods; constructing artificial features for screening

 

b.                  surface impacts – moving or reducing the size, shape, or orientation of the surface well site location or access road to avoid disturbance of natural features or to enhance the success of future reclamation activities; utilizing an existing surface well site location or access road to avoid the impacts of new construction; utilizing a closed drilling fluid system instead of reserve pits to avoid impacts to sensitive areas (Note:  Directional drilling from common surface locations may be a cost effective or technically feasible option to mitigate surface impacts)

 

c.                   noise impacts – installing electric motors where practicable; locating or orienting motors or compressors to reduce noise; installing sound barriers to achieve compliance with COGCC rules

 

d.                  dust impacts – watering roads as necessary to control dust during drilling and completion operations

 

e.                   ground water impacts – collecting and analyzing water and gas samples from existing water wells or springs; installing monitoring wells, collecting samples, and reporting water, gas and pressure data

 

f.                    safety impacts – soil gas sampling and analysis; residential crawl space gas sampling and analysis; installing security fencing around wellheads and production equipment

 

g.                   wildlife impacts – limiting drilling and completion operations during certain seasonal time periods when specific site conditions warrant

 

 6)                   If the operator objects to any of the conditions of approval applied under 5) above, the Director shall stay the issuance of the drilling permit and properly notice and set the matter for the next regularly scheduled Commission hearing at which time the Commission may determine conditions or drilling permit approval.