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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, ARCHULETA COUNTY, COLORADO |
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CAUSE NO. 112
ORDER NO. 112-182 |
This cause came on for hearing before the Commission at 9:00 a.m. on December 6, 2005, Suite 801, in The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to allow a horizontal well to be drilled as a second well in the 320-acre drilling and spacing unit consisting of the W½ of Section 5, Township 32 North, Range 5 West, N.M.P.M., with a surface location in the NW¼ of Section 5, 1135 feet from the north line and 1640 feet from the west line, for the production of gas and associated hydrocarbons from the Fruitland coal seams.
The Commission finds as follows:
1. Energen Resources Corporation (“Energen”), 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 Oil and Gas Conservation Act.
4. 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 5, Township 32 North, Range 5 West, N.M.P.M. On July 11, 2000, the Commission issued Order No. 112-157, which allowed an optional additional well to be drilled on certain 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Fruitland coal seams underlying certain lands, including these lands.
5. On October 17, 2005, Energen, by its attorney, filed with the Commission a verified application for an order to allow a horizontal well to be drilled as a second well in the 320-acre drilling and spacing unit consisting of the W½ of Section 5, Township 32 North, Range 5 West, N.M.P.M., with a surface location in the NW¼ of Section 5, 1135 feet from the north line and 1640 feet from the west line. The Dungan 32-5 #5-1 Well has been drilled as a vertical well located 955 feet from the south line and 1422 feet from the west line in the SW¼ of Section 5. The Dungan 32-5 #5-2 Well will be drilled in a southerly direction with a proposed bottom hole location in the SW¼ of Section 5, no closer than 1800’ from the south line and 660’ from the west line. Energen requested the right to produce from both wellbores located partially in the SW¼ of Section 5. The proposed horizontal well will maintain a 660’ setback from the outer boundary of the drilling and spacing unit and the 130’ interior line setback should be eliminated with respect to this proposed horizontal well.
6. Testimony and exhibits presented at the administrative hearing showed that the distance between the bottom hole location of the 5-2 Dungan horizontal well and the existing 5-1 Dungan vertical well is 1137 feet, that Energen has approximately fifty (50) percent of the W½ of Section 5 leased, with Burlington Resources and Red Willow having the remainder of the 320-acre drilling and spacing unit leased, that Energen will operate the well, and that no protests were received on the application.
7. Testimony and exhibits presented at the administrative hearing showed that approximately 36.6% or 58.5 acres of the 160 acres consisting of the SW¼ of Section 5 is being drained by the Dungan 5-1 Well, that approximately 29.2% or 46.7 acres of the 160-acres consisting of the NW¼ of Section 5 is calculated to be drained by the Dungan 5-2 Well, and that drilling horizontal wells will preclude the need to drill additional vertical wells.
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 to the application and having been heard by the Hearing Officer who recommended approval, the Commission should enter an order to allow a horizontal well to be drilled as a second well in the 320-acre drilling and spacing unit consisting of the W½ of Section 5, Township 32 North, Range 5 West, N.M.P.M., with a surface location in the NW¼ of Section 5, 1135 feet from the north line and 1640 feet from the west line, for production from the Fruitland coal seams.
ORDER
NOW, THEREFORE, IT IS ORDERED, that a horizontal well is hereby approved to be drilled as a second well for production from the Fruitland coal seams in the 320-acre drilling and spacing unit consisting of the W½ of Section 5, Township 32 North, Range 5 West, N.M.P.M., with a surface location in the NW¼ of Section 5, 1135 feet from the north line and 1640 feet from the west line, with the Dungan 32-5 #5-2 Well to be drilled in a southerly direction with a proposed bottom hole location in the SW¼ of Section 5, no closer than 1800’ from the south line and 660’ from the west line, maintaining a 660’ setback from the outer boundary of the drilling and spacing unit and with the elimination of the 130’ interior line setback.
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.
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