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BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE IGNACIO-BLANCO FIELD, LA PLATA COUNTY, COLORADO |
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CAUSE NO. 112
ORDER NO. 112-153 |
This cause came on for hearing before the Commission on January 15, 1999 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 application 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.), to be recompleted to the Fruitland Coal seams and produced as an additional well for the designated 320-acre drilling and spacing unit consisting of the W½ of Section 11.
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.), 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 August 3, 1998, Amoco, by their attorney, filed with the Commission a verified application for an order amending Order No. 112-61 to allow three (3) existing wells to be recompleted for production from the Fruitland Coal seams as additional wells for the designated 320-acre drilling and spacing units.
6. 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.
7. 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.
8. 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.
9. 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.
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 W½ of Section 11 is calculated at 23 BCF and the existing well is calculated to drain 142 acres. Production from the Animas 2-11 Well is projected to recover an additional 13.8 BCF of gas from the drilling and spacing unit.
11. 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 Animas 2-11 Well to the Commission within six (6) months of the date the well is first produced.
12. 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.
13. 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.
14. 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.
15. Exhibits and testimony presented October 14, 1998 at the administrative hearing indicted that an additional well in the NW¼ of Section 11, Township 33 North, Range 10 West, N.M.P.M and the existing well would drain more than the 320-acres of the drilling and spacing unit. In accordance with Rule 507.b.(1), offset owners which may be affected by the approval of this additional well had not been notified. The Hearing officers therefore recommended that the application for the well in the NW¼ of Section 11 be continued to provide additional notice.
16. On October 20, 1998, the Commission entered Order No. 112-149 which allowed two (2) wells to be drilled as additional wells for certain 320-acre drilling and spacing units and continued the application for the well in the NW¼ of Section 11, Township 33 North, Range 10 West, N.M.P.M. to the December hearing.
17. Exhibits and testimony presented at the October 14, 1998 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.
18. Based on the facts stated in the Application, the testimony and exhibits presented at the time of the administrative hearing by the applicant, and having received no protests from offsetting mineral owners, the Commission should approve the request to amend 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.), to be recompleted to the Fruitland coal seams and produced as an additional well for the 320-acre drilling and spacing unit consisting of the W½ of Section 11.
19. 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 6 and October 7, 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.
20. 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. 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.
NOW, THEREFORE IT IS ORDERED that Order No. 112-61 is hereby amended 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.) to be recompleted for production from the Fruitland Coal seams as an additional well for the 320-acre drilling and spacing unit consisting of the W½ of Section 11.
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 dated October 16, 1998 to address environmental and public health, safety and welfare concerns is hereby included as part of this order.
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 February, 1999, as of January 15, 1999.
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
February 1, 1999