|
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, ARCHULETA COUNTY, COLORADO |
) ) ) ) |
CAUSE NO. 112
ORDER NO. 112-178 |
This cause came on for hearing before the Commission at 9 a.m. on June 6, 2005 in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado on the application of Energen Resources Corporation for an order to allow an exception to the 130’ interior lease line setback established in Order No. 112-60 so that the Jaramillo 32-6 #12-1 Well and the Jaramillo 32-6 #12-2 Well located in the N½ of Section 12, Township 32 North, 6 West, N.M.P.M. can be produced without regard to the interior section setbacks.
The Commission finds as follows:
1. On July 11, 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, including Section 12, Township 32 North, Range 6 West, N.M.P.M., with the permitted well to be located in the center of the NW¼ and the SE¼ of the section and no closer than 900 feet from the boundaries of the quarter section upon which it is located, nor closer than 130 feet to any interior quarter section line.
2. On May 15, 2000, the Commission issued Order No. 112-157, which allowed an optional additional well to be drilled for production of gas from the Fruitland coal seams for certain lands, including Section 12, Township 32 North, Range 6 West, N.M.P.M., with the permitted well when north of the north line of Township 32 North to be located in the NW¼ and the SE¼ of each section and when south of the north line of Township 32 North to be located in the NE¼ and 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.
3. On April 11, 2005, Energen Resources Corporation (“Energen”), by its attorney, filed with the Commission a verified application for an order to allow an exception to the 130’ interior lease line setback established in Order No. 112-60 so that the Jaramillo 32-6 #12-1 Well and the Jaramillo 32-6 #12-2 Well located in the N½ of Section 12, Township 32 North, 6 West, N.M.P.M. can be produced without regard to the interior section setbacks. The Jaramillo 32-6 #12-2 Well, a horizontal well, the surface of which is located in the NW¼ of Section 12 with horizontal leg bottoming in the NE¼ of Section 12, intersects the producing formation within the NW¼ of Section 12, resulting in two (2) Fruitland coal seams wells partially located in the quarter section. All owners in the 320-acre spacing unit are common and no violation of correlative rights exists due to non-compliance with interior line setbacks.
4. Testimony and exhibits presented at the administrative hearing showed that the Jaramillo #12-1 Well is a vertical well located in the NW¼ of Section 12, Township 32 North, Range 6 West, N.M.P.M. and that the Jaramillo #12-2 Well is a directionally drilled well located on the Jaramillo #12-1 well site and drilled 2700 feet to the northeast.
5. Testimony and exhibits presented at the administrative hearing showed that the mineral ownership in the N½ of Section 12 is uniform and that the Permit-to-Drill the Jaramillo #12-2 Well was approved by the Colorado Oil and Gas Conservation Commission on November 23, 2004.
6. Testimony and exhibits presented at the administrative hearing showed that the Jaramillo #12-2 wellbore enters the Fruitland coal seams in the NW¼ of Section 12 and reaches total depth in the Fruitland coal seams in the NE¼ of Section 12. Additional testimony showed that because the Jaramillo #12-2 wellbore crosses the interior section line, the producing Fruitland coal seam interval is less than 130 feet from the interior section lines.
7. Testimony and exhibits presented at the administrative hearing showed that the Jaramillo #12-1 and the Jaramillo #12-2 Wells will drain 105 acres of the 320-acre drilling unit, and that both wells would be necessary to drain gas from the Fruitland coal seam in this unit. Additional testimony showed that correlative rights would be protected if both wells were allowed to produce.
8. Energen Resources Corporation agreed to be bound by oral order of the Commission.
9. Based on the facts stated in the verified application, having received no protests, and having been heard by the Hearing Officer who recommended approval, the Commission should enter an order approving an exception to the 130’ interior lease line setback established in Order No. 112-60 so that the Jaramillo 32-6 #12-1 Well and the Jaramillo 32-6 #12-2 Well located in the N½ of Section 12, Township 32 North, 6 West, N.M.P.M. can be produced without regard to the interior section setbacks.
NOW, THEREFORE, IT IS ORDERED, that an exception to the 130’ interior lease line setback established in Order No. 112-60 is hereby approved allowing the Jaramillo 32-6 #12-1 Well and the Jaramillo 32-6 #12-2 Well located in the N½ of Section 12, Township 32 North, 6 West, N.M.P.M. to be produced without regard to the interior section setbacks.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.
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.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
ENTERED this day of June, 2005, as of June, 2005.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Patricia Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
June 20, 2005