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 IGNACIO-BLANCO FIELD, LA PLATA COUNTY, COLORADO	) ) ) )	CAUSE NO.   112 ORDER NO.   112-149

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission on October 20,1998 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 verified applications of Amoco Production Company, for an order amending Order No. 112-61 to allow the Animas 2-11 Well located in the NW¼ of Section 11, Township 33 North, Range 10 West, N.M.P.M., (S.U.L.), the M.F. Thierry Well located in the NE¼ of Section 16, Township 34 North, Range 8 West, N.M.P.M , (S.U.L.) and the Case 01-35 Well located in the SW¼ of Section 35, Township 35 North, Range 8 West, N.M.P.M., (N.U.L.), all to be recompleted to the Fruitland Coal seams and produced as additional wells for the 320-acre drilling and spacing units consisting of the W½ of Section 11, the N½ of Section 16 and the S½ of Section 35.

FINDINGS

                        The Commission finds as follows:

                        1.  Amoco Production Company (“Amoco”) 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 11, Township 33 North, Range 10 West, N.M.P.M., (S.U.L.), Section 16, Township 34 North, Range 8 West, N.M.P.M., (S.U.L.) and Section 35, Township 35 North, Range 8 West, N.M.P.M, (N.U.L.), with the units to consist of a governmental half section and the permitted well when South of the Ute Line to be located in the NE¼ and the SW¼ of each section and when North of the Ute Line to be located in the NW¼ and the SE¼ 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 seams.

                        5.  On September 17, 1998, La Plata County filed with the Commission a Statement in Intervention and Protest, together with a Motion for Expedited Discovery and a First Set of Interrogatories and Request for Production of Documents to Amoco Corporation for the three (3) wells listed above.

                        6.  On October 6 and 7, 1998 the Commission staff conducted Local Public Forums on the Application pursuant to Rule 508. in Ignacio and Durango, respectively.

                        7.  On October 7, 1998, the Secretary convened a pre-hearing conference pursuant to Rule 527. attended by Commission staff, La Plata County representatives, Amoco representatives and Southern Ute Indian Tribe representatives.

                        8.  On October 14, 1998 the Bureau of Land Management (BLM) submitted a letter to the Commission in support of the Application in accordance with the conditions of the Memorandum of Understanding between the BLM and the COGCC for the wells located South of the Ute Line.

                        9.  Exhibits and testimony presented at the administrative hearing indicated that the drainage from the Animas 2-11 Well as an additional well for the 320-acre unit would be greater than 320 acres and therefore the hearing on this well was continued until additional notice could be provided to cornering and contiguous mineral owners.

                        10.  Exhibits and testimony presented October 14, 1998 at the administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the N½ of Section 16 is calculated at 22.9 BCF and the existing well is calculated to drain only 78 acres.  Production from the M.F. Thierry Well is projected to recover an additional 4.5 BCF of gas from the drilling and spacing unit.

                        11.  Exhibits and testimony presented at the October 14, 1998 administrative hearing indicated the gas in place for the 320-acre drilling and spacing unit consisting of the S½ of Section 35 is calculated at 20.6 BCF and the existing well is calculated to drain only 97 acres.  Production from the Case 01-35 Well is projected to recover an additional 4.0 BCF of gas from the drilling and spacing unit.

                        12.  Evidence presented at the October 14, 1998 administrative hearing indicated that one (1) well will not efficiently and economically drain the 320‑acre drilling and spacing units consisting of the N½ of Section 16 and the S½ of Section 35, and that additional wells are necessary to prevent waste, protect correlative rights, and to recover gas and associated hydrocarbons from the Fruitland coal seams.

                        13.  During the local public forum held in Durango, local residents raised surface concerns related to the Case 01-35 Well located in the SW¼ of Section 35, Township 35 North, Range 8 West, N.M.P.M.  An onsite inspection should be performed by COGCC staff to more adequately address the concerns and evaluate the compliance of the surface location with the Commission Rules and Regulations.

                        14.  To accurately assess the feasibility of the increased well density pilot project in different areas included in the Application, Amoco should submit measured bottom hole pressures, drilling and completion costs, and annual operation costs for the two (2) wells described above to the Commission within six (6) months of the date each of the wells are first produced.

                        15.  In order to monitor the water and gas production from any existing and addition wells drilled in areas of historically high water production, Amoco should provide to the Commission water and gas production data from the Case 01-35 Well located in the SW¼ of Section 35, Township 35 North, Range 8 West on a quarterly basis.  Amoco should begin providing the data at the end of the first quarter in which the well is produced.

                        16. On October 16, 1998 the Hearing Officers continued the administrative hearing to review an agreement submitted by La Plata County and Amoco to address environmental and public health, safety and welfare concerns raised by the county on the Application for increased well density (the “Agreement”).  La Plata County and Amoco consented to the continuance.  On October 16, 1998 La Plata County and Amoco executed the Agreement and asked that the Commission make the Agreement part of the Commission order on the Application.  La Plata County simultaneously agreed to withdraw its intervention conditioned upon the Commission making the Agreement part of the order on the Application.

                        17.  The Commission finds that the Agreement between La Plata County and Amoco should become part of the order to address environmental and public health, safety and welfare concerns.

                        18.  On October 16, 1998, La Plata County filed with the Commission a Conditional Withdrawal of Intervention which stated that the Intervention will be withdrawn if the Agreement between La Plata County and Amoco is made part of the Commission’s final order.

                        19.  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 M.F. Thierry Well located in the NE¼ of Section 16, Township 34 North, Range 8 West, N.M.P.M., (S.U.L.) and the Case 01-35 Well located in the SW¼ of Section 35, Township 35 North, Range 8 West, N.M.P.M., (N.U.L.), both to be recompleted to the Fruitland coal seams and produced as additional wells for the 320-acre drilling and spacing units consisting of the N½ of Section 16 and the S½ of Section 35.

                        20.  Pursuant to Rule 508. The Commission has reviewed the Local Public Forum Summary reports dated October 14, 1998, and the video-tapes of the Local Public Forums conducted in Ignacio and Durango on October 7 and October 8, 1998.  Pursuant to Rule 508.i.(5).C. the Commission finds that it should enter an order approving the Application which shall contain the above-described conditions agreed to by Amoco which the Commission finds adequately address the concerns related the environment and public health, safety and welfare not otherwise addressed by the Application or by Commission rule.

                        21.  The Commission further finds that it cannot make the required findings contained in Rule 508.i.(5).D. necessary to order a Public Issues Hearing on the Application is not required.  Based on this finding and the County’s withdrawal of its intervention the Commission finds that a Public Issues Hearing on the Applications is not required.

ORDER

                        NOW, THEREFORE, IT IS ORDERED that Order No. 112-61 is hereby amended to allow the M.F. Thierry Well in the NE¼ of Section 16, Township 34 North, Range 8 West, N.M.P.M., (S.U.L.) and the Case 01-35 Well in the SW¼ of Section 35, Township 35 North, Range 8 West, N.M.P.M., (N.U.L.), both to be recompleted to the Fruitland coal seams and produced as additional wells for the 320-acre drilling and spacing units consisting of the N½ of Section 16 and the S½ of Section 35.

                        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 with respect to Indian lands, 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 the agreement between La Plata County and Amoco Production Company to address environmental and public health, safety and welfare concerns is hereby included as part of this order.

                        IT IS FURTHER ORDERED that the application for the recompletion of the Animas 2-11 Well located in the NW¼ of Section 11, Township 33 North, Range 10 West, N.M.P.M. shall be continued until additional notice is provided to cornering and contiguous mineral owners.

IT IS FURTHER ORDERED that Amoco Production Company shall submit measured bottom hole pressures, drilling and completion costs, and annual operation costs for the M.F. Thierry Well and the Case 01-35 Well to the Commission within six (6) months of the date each of the wells are first produced.

                        IT IS FURTHER ORDERED that COGCC staff shall perform an onsite inspection for the Case 01-35 Well located in the SW¼ of Section 35, Township 35 North, Range 8 West, N.M.P.M.

                        IT IS FURTHER ORDERED that Amoco Production Company shall submit water and gas production data from the Case 01-35 Well to the Commission every quarter beginning with the end of the quarter in which the recompleted well is first produced.

                        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 November, 1998, as of  October 20, 1998.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                           OF THE STATE OF COLORADO

                                                                        By

                                                                                      Patricia C. Beaver, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

July 5, 2018