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 FORMATION, IGNACIO-BLANCO FIELD, LA PLATA COUNTY, COLORADO |
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CAUSE NO. 112
DOCKET NO. 170900611
TYPE: ADDITIONAL WELLS
ORDER NO. 112-278 |
REPORT OF THE COMMISSION
The Commission heard this matter on March 19, 2018, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to approve a total of up to four vertical, directional, or horizontal wells, within two approximate 320-acre drilling and spacing units established for Section 27, Township 33 North, Range 8 West, N.M.P.M. (S.U.L.), for the production of oil, gas, and associated hydrocarbons from the Fruitland Coal Formation.
FINDINGS
The Commission finds as follows:
1. Catamount Energy Partners, LLC (Operator No. 10464) (“Catamount” 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 June 17, 1988, the Commission entered Order No. 112-60, which established 320-acre drilling and spacing units covering certain lands in Archuleta County, Colorado, with the units consisting of the N½ and S½ or the E½ and W½ of each section with the permitted well located, when north of the north line of Township 32 North, in the NW¼ and SE¼ of the section, and south of the north line of Township 32 North, in the NE¼ and SW¼ of the section, and no closer than 990 feet to any outer boundary of the unit and no closer than 130 feet to any interior quarter section line for the production of gas from the Fruitland Coal Seams. Section 27, Township 33 North, Range 8 West, N.M.P.M. (S.U.L.), is subject to this Order.
5. On August 15, 1988, the Commission entered Order No. 112-61, which amended portions of Order No. 112-60 and established additional rules for the production of coalbed methane. Section 27, Township 33 North, Range 8 West, N.M.P.M. (S.U.L.), is subject to this Order.
6. On December 17, 1990, the Commission entered Order No. 112-157, which amended Order Nos. 112-60, 112-61, and 112-85 to allow an optional additional well (for a total of up to two wells) to be drilled for production of gas from the Fruitland Coal Seams within the established 320-acre drilling and spacing units with the permitted well to be located in any undrilled quarter section no closer than 990 feet from the boundaries of the quarter section, nor closer than 130 feet to any interior quarter section line. Section 27, Township 33 North, Range 8 West, N.M.P.M. (S.U.L.), is subject to this Order.
7. On July 13, 2017, Catamount, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order that amends Order No. 112-157 as it pertains to the Application Lands to allow an additional two wells, for a total of up to four vertical, directional, or horizontal wells, within each of the established stand-up 320-acre drilling and spacing units covering the Application Lands for the production of oil, gas, and associated hydrocarbons from the Fruitland Coal Seams, with the surface location for the additional wells to be located at a legal location in the above-described drilling and spacing units or on adjacent lands; and require that the treated interval of each wellbore be located no closer than 660 feet from the unit boundary, with no interior quarter-section setbacks, unless an exception is granted by the Director, covering the following lands in La Plata County, Colorado (“Application Lands”):
Township 33 North, Range 8 West, N.M.P.M. (S.U.L.)
Section 27: All
8. On August 28, 2017, La Plata County filed an Intervention pursuant to Commission Rule 509 to ensure that any order entered approving the Application protects environment and public health, safety, and welfare. The Intervention stated that upon entering an agreement with Catamount regarding those issues, the County will supplement its Intervention and/or withdraw its motion to intervene.
9. On January 23, 2018, the La Plata County Board of County Commissioners approved the Memorandum of Understanding (“MOU”) entered into between Catamount and La Plata. Catamount requests Exhibit A of the MOU be made a part of this order. A signed copy of the MOU is attached to this Order.
10. On January 24, 2018, La Plata County filed a Notice and Filing of Memorandum of Understanding and requested that its Intervention be withdrawn at such time the Commission enters an Order approving the Application subject to the conditions agreed upon between La Plata County and Applicant.
11. On August 21, 2017, Catamount, 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.
12. Land testimony and exhibits submitted in support of the Application by Denise Greer, Landman for Catamount, showed Catamount as the owner of a leasehold interest in the Application Lands.
13. Geologic testimony and exhibits submitted in support of the Application by Russell Kelly, geologist and Senior Vice President for Catamount, included a proposed infill area base map; Fruitland Coal Type Log; a Fruitland Coal Structure Map showing the fairly simple structural style of the formation across the Application Lands; and a Fruitland Coal Net Thickness Isopach Map showing the Fruitland Coal formation underlying the Application Lands to be approximately 57 feet thick in the E½ of Section 27 and approximately 60 feet thick in the W½ of Section 27 showing that the reservoir can be more efficiently developed using horizontal drilling techniques.
14. Engineering testimony and exhibits submitted in support of the Application by Craig Reid, petroleum engineer and President for Catamount, showed that increased well density for the Fruitland Coal seam underlying the application lands is necessary to more efficiently drain gas reserves. Additional testimony demonstrated that fully developing the E½ of Section 27 will result in the additional recovery of 8.2 BCF and fully developing the W½ of Section 27 will result in the additional recovery of 9.7 BCF.
15. 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.
16. Catamount 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 based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to approve a total of up to four vertical, directional, or horizontal wells, within established two approximate 320-acre drilling and spacing units established for Section 27, Township 33 North, Range 8 West, N.M.P.M. (S.U.L.), for the production of gas and associated hydrocarbons from the Fruitland Coal Formation.
ORDER
IT IS HEREBY ORDERED:
1. A total of up to four vertical, directional, or horizontal wells, in two stand-up approximate 320-acre drilling and spacing units established the below-described lands, are hereby approved, for the production of oil, gas, and associated hydrocarbons from the Fruitland Coal Formation:
Township 33 North, Range 8 West, N.M.P.M. (S.U.L.)
Section 27: All
2. The treated interval of each wellbore shall be located no closer than 660 feet from the unit boundary, with no interior quarter-section setbacks, unless an exception is granted by the Director, without exception being granted by the Director.
3. The surface location is to be at a legal location within the drilling and spacing unit or on adjacent lands to the established 320-acre spacing units covering the Application Lands in La Plata County, Colorado.
4. Exhibit A of the MOU between Catamount and La Plata County is made a part of this Order.
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 11th day of April, 2018, as of March 19, 2018
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By_______________________________________
Julie Spence Prine, Secretary