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 FOR THE FRUITLAND COAL SEAMS FORMATION, IGNACIO-BLANCO FIELD, ARCHULETA COUNTY, COLORADO |
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CAUSE NO. 112
DOCKET NO. 170100017
TYPE: ADDITIONAL WELLS
ORDER NO. 112-268 CORRECTED |
REPORT OF THE COMMISSION
The Commission heard this matter on March 20, 2017, at the Larimer County Conference Center at The Ranch, First National Bank Building, 5280 Arena Circle, Loveland, Colorado, upon application for an order to approve a total of up to three horizontal wells within an approximate 320-acre drilling and spacing unit established by Order No. 112-61 (amended and corrected on December 17, 1990, under Order No. 112-85) for Section 21, Township 33 North, Range 5 West, N.M.P.M., for the production of the oil, gas, and associated hydrocarbons from the Fruitland Coal Seams Formation.
FINDINGS
The Commission finds as follows:
1. Petrox Resources, Inc. (Operator No. 69805) (“Petrox” 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 August 15, 1988, the Commission entered Order No. 112-61 (amended and corrected on December 17, 1990, under Order No. 112-85) which, among other things, established 320-acre drilling and spacing units for certain lands as designated lay-down or stand-up by the operator, with authority to drill one well no closer than 990 feet from unit boundary and no closer than 130 feet from any interior quarter section line, for the production of gas and associated hydrocarbons from the Fruitland Coal Seams Formation. Section 21, Township 33 North, Range 5 West, N.M.P.M., is subject to these orders for the Fruitland Coal Seams Formation.
Township 33 North, Range 5 West, N.M.P.M.
Section 21: S˝
6. Applicant states that any horizontal wells to be drilled under this Application will be drilled from an existing well pad, unless the Director grants an exception.
7. On January 9, 2017, amended March 8, 2017, Petrox, 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.
8. Land testimony and exhibits submitted in support of the Application by Steve Muns, Land Manager for EXOK, Inc., on behalf of Petrox, showed that Petrox holds oil and gas leasehold interests and has a right to drill in the Application Lands. Land testimony further stated that as an accommodation to the Southern Ute Indian Tribe, Applicant requests that the 300-foot set-back from the unit boundaries requested in the Application be amended to 600 feet from the east and west boundaries of the unit, and 990 feet from the north and south boundaries of the unit.
9. Geologic testimony and exhibits submitted in support of the Application by Mike Clark, owner of Petrox, showed the Fruitland Coal Seams Formation is present throughout the Application Lands, and is approximately 30 to 40 feet thick throughout the Application Lands.
10. Engineering testimony and exhibits submitted in support of the Application by Michael J. Clark, President of Petrox, showed that the drainage area for a Fruitland Coal Seams Formation well is estimated at 35 acres, and an approximate 320-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by a horizontal well producing oil, gas and associated hydrocarbons from the Fruitland Coal Seams Formation.
11. 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.
12. Petrox agreed to be bound by oral order of the Commission.
13. Based on the facts stated in the verified Application, having received no protests, and based on the Hearing Officer review of the Application under Rule 511, the Commission should approve a total of up to three horizontal wells within an approximate 320-acre drilling and spacing unit established by Order No. 112-61 (amended and corrected on December 17, 1990, under Order No. 112-85) for Section 21, Township 33 North, Range 5 West, N.M.P.M., for the production of the oil, gas, and associated hydrocarbons from the Fruitland Coal Seams Formation.
ORDER
IT IS HEREBY ORDERED:
1. A total of up to three horizontal wells within an approximate 320-acre drilling and spacing unit established by Order No. 112-61 (amended and corrected on December 17, 1990, under Order No. 112-85) for the below described lands are hereby approved for the production of oil, gas and associated hydrocarbons from the Fruitland Coal Seams Formation, with the productive interval of any horizontal wellbore to be no closer than 600 feet from the east and west boundaries of the unit, no closer than 990 feet from the north and south boundaries of the unit, and no closer than 300 feet from the productive interval of any other wellbore located in the unit, unless the Director grants an exception:
Township 33 North, Range 5 West, N.M.P.M.
Section 21: S˝
2. All wells permitted under this Order shall be drilled from an existing well pad, unless the Director grants an exception.
IT IS FURTHER ORDERED:
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 28th day of March, 2017, effective as of March 20, 2017.
CORRECTED this 22nd day of June, 2017 as of March 20, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Peter Gowen, Acting Secretary