112-146

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION AND

AND ESTABLISHMENT OF FIELD RULES TO

GOVERN OPERATIONS IN THE IGNACIO-BLANCO

FIELD, LA PLATA COUNTY, COLORADO

)

CAUSE NO. 112

ORDER NO. 112-146

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 17, 1998, at 8:30 a.m. in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law, on the application of Four Star Oil and Gas Company, for an order amending Order No. 112-61 to allow an additional well in the E½ of Section 9, Township 33 North, Range 10 West, N.M.P.M., for production from the Fruitland Coal seams. Applicant proposes to recomplete the Ute E No. 3 Well, located in a legal location the NE¼ of the section to the Fruitland Coal seams as an additional well in said 320-acre unit.

FINDINGS

The Commission finds as follows:

1. Four Star Oil and Gas Company ("Four Star") 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 of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order pursuant to the terms of a Memorandum of Understanding between the Commission and the Bureau of Land Management.

4. On June 15, 1988, the Commission issued Order No. 112‑60 which established 320‑acre drilling and spacing units for the production of gas and associated hydrocarbons from the Fruitland coal seams, underlying certain lands in the Ignacio‑Blanco Field including Section 9, Township 33 North, Range 10 West, N.M.P.M., with the units to consist of a governmental half section and the permitted well to be located in the NE¼ and the SW¼ of each section, no closer than 990 feet from the boundaries of the quarter section, nor closer than 130 feet to any interior quarter section line. Order No. 112-61 was subsequently adopted amending Order No. 112-60 to establish additional field rules for the Fruitland Coal Formation.

5. On April 24, 1998, Four Star filed with the Commission a verified application for an order amending Order No. 112-61 to allow the Ute E No. 3 Well to be recompleted as an additional well for production from the Fruitland Coal seams for the 320-acre drilling and spacing unit consisting of the E½ of Section 9, Township 33 North, Range 10 West, N.M.P.M. The well is located 1,600 feet FNL and 1,640 feet FEL in the NE¼ of Section 9.

6. Evidence presented at the administrative hearing indicates that in the E½ of Section 9 Four Star owns 95% of the working interest, the Southern Ute Indian Tribe owns 100% of the minerals, and the surface ownership is 100% fee.

7. Evidence presented at the administrative hearing shows the well is currently completed in the Mesa Verde and the Pictured Cliffs Formations. These formations will be abandoned and the well will be recompleted for production from the Fruitland Coal seams.

8. Evidence presented at the administrative hearing indicates that one well will not efficiently and economically drain the 320‑acre drilling and spacing unit consisting of the E½ of Section 9, and that an additional well is necessary to prevent waste, protect correlative rights, and to recover gas and associated hydrocarbons from the Fruitland Coal seams.

9. At the time of the administrative hearing, the Applicant agreed to be bound by oral order of the Commission.

10. The Bureau of Land Management submitted a letter dated August 7, 1998, providing support for this application in accordance with the conditions of the Memorandum of Understanding between the BLM and the COGCC.

11. A letter in support of the application was submitted to the COGCC dated August 11, 1998, from EnerVest San Juan Operating Company, LLC.

12. Based on the facts stated in the application and the testimony and exhibits presented at the time of the administrative hearing by the applicant, the Commission should approve the request to amend Order No. 112-61 to allow the Ute E No. 3 Well located 1,600 feet FNL and 1,640 feet FEL in the NE¼ of Section 9, Township 33 North, Range 10 West, N.M.P.M. to be recompleted to the Fruitland Coal seams as an additional well for the 320-acre drilling and spacing unit consisting of the E½ of Section 9.

ORDER

NOW, THEREFORE, IT IS ORDERED that Order No. 112-61 is hereby amended to allow the Ute E No. 3 Well located 1,600 feet FNL and 1,640 feet FEL in the NE¼ of Section 9, Township 33 North, Range 10 West, N.M.P.M., to be recompleted from the Fruitland Coal seams as an additional well for the 320-acre drilling and spacing unit consisting of the E½ of Section 9.

IT IS FURTHER ORDERED, that in accordance with G.4.b. paragraph 2 of the MOU of August 22, 1991, between the BLM and COGCC, this order is hereby deemed to be an order by the BLM. As such, any appeal or challenge of this order with respect to Indian lands shall go through the BLM State Director Review process outlined in 43 CFR 3165.3.

IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

IT IS FURTHER ORDERED that the provisions contained in the above order shall become effective forthwith, as the party agreed to accept the verbal order of the Commission.

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 August, 1998, as of August 17, 1998.

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

Patricia C. Beaver, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

July 5, 2018