BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
|
IN THE MATTER OF THE AMENDED APPLICATION OF SAMSON RESOURCES COMPANY FOR AN ORDER TO APPROVE AN ADDITIONAL WELL WITHIN AN APPROXIMATE 320-ACRE DRILLING AND SPACING UNIT FOR SECTION 15, TOWNSHIP 32 NORTH, RANGE 7 WEST, N.M.P.M. FOR THE MESAVERDE FORMATION, IGNACIO-BLANCO FIELD, LA PLATA COUNTY, COLORADO |
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CAUSE NO. 112
DOCKET NO. 1401-AW-01
ORDER NO. 112-239 |
REPORT OF THE COMMISSION
The Commission heard this matter on January 27, 2014, at the Centennial Building, 1313 Sherman Street, Denver, Colorado, upon application for an order to approve one additional well, for a total of up to three wells, to recomplete the existing Southern Ute 4E Well, within an approximate 320-acre drilling and spacing unit established for the N½ of Section 15, Township 32 North, Range 7 West, N.M.P.M., for the production of oil, gas and associated hydrocarbons from the Mesaverde Formation.
FINDINGS
The Commission finds as follows:
1. Samson Resources Company (“Samson” or “Applicant”), 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 November 9, 1959, the Commission entered Order No. 112-6 for the Ignacio-Blanco Field which, among other things, established 320-acre drilling and spacing units, for the production of gas from the Fruitland-Pictured Cliffs and Mesaverde Formations. Section 15, Township 32 North, Range 7 West, N.M.P.M. is subject to Order No. 112-6 for the Mesaverde Formation.
5. On July 16, 1979, the Commission entered Order No. 112-46 which, among other things, authorized the drilling of an additional well for the production of gas from the Pictured Cliffs and Mesaverde Formations on each established 320-acre drilling and spacing unit in the spaced area. The Order further provided that the additional well shall be located in the undrilled quarter section no closer than 990 feet to the boundaries of the quarter section. Section 15, Township 32 North, Range 7 West, N.M.P.M. is subject to Order No. 112-46 for the Mesaverde Formation.
6. On November 26, 2013 (Amended December 31, 2013), Samson, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified amended application (“Amended Application”) for an order to approve one additional well, for a total of up to three wells in an approximate 320-acre drilling and spacing unit established for the below-described lands (“Application Lands”) for the production of oil, gas, and associated hydrocarbons from the Mesaverde Formation, to recomplete the existing Southern Ute 4E Well (API No. 05-067-08083), and to be located no closer than 990 feet from the boundaries of the quarter section upon which the well is located and no closer than 660 feet from another well producing from the Mesaverde Formation:
Township 32 North, Range 7 West, N.M.P.M.
Section 15: N½
7. Applicant further states that there will be no new surface disturbances to recomplete the existing Southern Ute 4E Well to the Mesaverde Formation.
8. On January 8, 2014, Samson, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits. Sworn written testimony and exhibits were submitted in support of the Application.
9. Land Testimony and exhibits submitted in support of the Application by Lauren Ross, Landman for Samson, showed that Samson holds a leasehold interest in the Mesaverde Formation in the Application Lands.
10. Geologic Testimony and exhibits submitted in support of the Application by Matthew Jones, District Geologist for Samson, included an isopach map from the top of the Menefee Formation (a formation within the Mesa Verde Group) to the base of the Mesa Verde Group showing the total thickness ranges from 270-280 feet thick, Additional testimony further indicated that there is clean sand development with fair to good porosity and good resistivity response within the Menefee and Point Lookout Sandstone with anticipated hydrocarbons constituting a common source of supply.
11. Engineering Testimony and exhibits submitted in support of the Application by Sean Barchie, District Engineer for Samson, showed an overall recovery factor of 67.5% based on the production from the two existing wells within the application area without the additional subject well being recompleted to the Mesaverde Formation and an increase in the estimated recovery factor to 77.4% from an additional well completed in the Mesaverde Formation. Additional testimony concluded that granting the proposed order will permit the successful development of an otherwise marginally economic resource, and prevent waste by ensuring the pool as a whole may be efficiently and economically developed.
12. The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.
13. On January 14, 2014, La Plata County (“La Plata” or “Intervenor”) filed an Intervention to the Application, raising environmental and public health, welfare and safety concerns.
14. On January 15, 2014, a prehearing conference was held, at which the parties agreed that Samson and La Plata would enter into a Memorandum of Understanding (“MOU”) to be approved by the La Plata County Commissioners to address the issues relating to truck traffic as well as road impacts and maintenance. The parties requested conditional approval of the Application.
15. On January 21, 2014, the Bureau of Land Management (“BLM”) and the Southern Ute Indian Tribe (“SUIT”) submitted a letter of concurrence in support of the Application.
16. Samson agreed to be bound by oral order of the Commission.
17. Based on the facts stated in the verified Application, having received no protests and resolved the Intervention, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to approve one additional well, for a total of up to three wells, to recomplete the existing Southern Ute 4E Well, within an approximate 320-acre drilling and spacing unit established for the N½ of Section 15, Township 32 North, Range 7 West, N.M.P.M., for the production of oil, gas and associated hydrocarbons from the Mesaverde Formation.
ORDER
IT IS HEREBY ORDERED:
1. One additional well, for a total of up to three wells, within an approximate 320-acre drilling and spacing unit established for the below-described lands, is hereby approved, for the production of oil, gas and associated hydrocarbons of the Mesaverde Formation, to recomplete the existing Southern Ute 4E Well, and to be located no closer than 990 feet from the boundaries of the quarter section upon which the well is located and no closer than 660 feet from another well producing from the Mesaverde Formation.
Township 32 North, Range 7 West, N.M.P.M.
Section 15: N½
2. Applicant further states that there will be no new surface disturbances to recomplete the existing Southern Ute 4E Well to the Mesaverde Formation.
3. This matter is conditionally approved, subject to agreement of an MOU between the Applicant and Intervenor. The Commission shall retain jurisdiction to resolve the Intervention if the parties do not reach an agreement.
4. Intervenor shall notify the Commission in writing upon successful resolution of the Intervention, and shall submit a copy of the executed MOU for the record.
1. The provisions contained in the above order shall become effective immediately.
2. The Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.
3. Under the State Administrative Procedure Act the Commission considers this Order to be final agency action for purposes of judicial review within 35 days after the date this Order is mailed by the Commission.
4. An application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.
ENTERED this 21st day of February, 2014, as of January 27, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary