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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, LA PLATA AND ARCHULETA COUNTIES |
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CAUSE NO. 112
ORDER NO. 112-46 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on July 16, 1979 at 9:00 a.m., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the Commission's own motion, to consider amending Order No. 112-6 and permit the drilling of additional wells on each of the 320-acre and 640-acre drilling and spacing units for the production of gas from the Fruitland-Pictured Cliffs, Mesaverde and Dakota-Morrison formations. In addition, the Commission considered the rescinding of the provision in Order No. 112-6 pertaining to the pooling of all interests in the drilling and spacing units prior to the drilling of a well.
FINDINGS
The Commission finds as follows:
1. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.
2. 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.
3. On November 9, 1959, the Commission issued Order No. 112-6 for the Ignacio-Blanco Field which, among other things, by Rule 2 of said order, established 320-acre drilling and spacing units for the production of gas from the Fruitland-Pictured Cliffs and Mesaverde formations. The units consist of the N½ and S½ or the E½ and W½ of a full 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 when south of the north line of Township 32 North, in the NE¼ and SW¼, and no closer than 990 feet from the boundaries of the quarter section upon which it is located, and in the case of designated units established in fractional sections, no closer than 990 feet to the boundary of the unit. By Rule 3, 640-acre drilling and spacing units were established for the production of gas from the Dakota-Morrison formation with the permitted well located no closer than 1320 feet to the outer boundaries of the quarter section upon which it is located, and in the case of the designated units established in fractional sections, no closer than 990 feet to the boundaries of the unit. In addition, provisions were included concerning the consolidation of interests in the units by pooling agreements or otherwise prior to the drilling of a well.
4. Evidence presented at the hearing indicates that the Fruitland-Pictured Cliffs, Mesaverde, Dakota-Morrison reservoirs are not homogeneous or uniform over the entire field, and the producing formations are comprised of various overlapping, inter-connecting lenticular sands of low permeability, which do not allow complete drainage of the spacing units, in most cases, with the present spacing pattern.
5. One well is insufficient to adequately drain the gas from that part of said reservoirs underlying the drilling and spacing units as established by Order No. 112-6, and the drilling of additional wells on such drilling and spacing units is necessary to effectively and efficiently drain that part of each reservoir underlying said units and will result in a greater ultimate recovery of gas reserves.
6. An additional well should be permitted on each existing 320-acre drilling and spacing unit for the production of gas from the Fruitland-Pictured Cliffs and Mesaverde formations underlying the area described in the order herein, at a location in the undrilled quarter section no closer than 990 feet to the boundaries of the quarter section upon which it is located, and additional wells should be permitted on each existing 640-acre drilling and spacing unit for the production of gas from the Dakota-Morrison formation underlying the area described in the order herein, at a location in the undrilled quarter sections, no closer than 990 feet to the boundaries of the quarter section upon which it is located. An additional well for production of gas from Fruitland-Pictured Cliffs, Mesaverde and Dakota-Morrison formations should be permitted on the drilling and spacing units in cases of fractional sections as described in Rule 2 and 3, Order No. 112-6.
7. Since reservoir conditions are not uniform over the entire area, the option to drill additional wells in each drilling and spacing unit should remain with the operator for each 320-acre and/or 640-acre unit as established by Order No. 112-6, and the drilling of such additional wells will afford each operator the opportunity to produce, without waste, his just and equitable share from each reservoir and protect correlative rights.
8. The Director should be allowed to grant exceptions to the permitted well locations as described in Finding 6 herein, without notice or hearing, to avoid topographical or surface hazards. If for any other reason, exceptions may be granted provided the owners of the contiguous and cornering units towards which the proposed location would be moved, file a waiver or consent, in writing, agreeing to said exception.
9. The provision as stated in Finding 3 herein pertaining to the pooling of all interests in the drilling and spacing units prior to the drilling of a well is no longer necessary and should be rescinded.
10. The other provisions of Order No. 112-6 should remain in effect.
ORDER
NOW, THEREFORE, IT IS ORDERED, that the provisions of Order No. 112-6 pertaining to the permitted well locations for each 320-acre drilling and spacing unit for the production of gas from the Fruitland-Pictured Cliffs and Mesaverde formations and 640-acre drilling and spacing unit for production of gas from the Dakota-Morrison formation, are hereby amended and the following shall apply hereafter to wells drilled, completed, or re-completed in said formations underlying the lands herein described in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:
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Township 32 North, Range 6 West, N.M.P.M. |
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Sections 1 thru 24 |
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Township 33 North, Range 6 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 34 North, Range 6 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 32 North, Range 7 West, N.M.P.M. |
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Sections 1 thru 24 |
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Township 33 North, Range 7 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 34 North, Range 7 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 32 North, Range 8 West, N.M.P.M. |
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Sections 1 thru 24 |
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Township 33 North, Range 8 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 34 North, Range 8 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 32 North, Range 9 West, N.M.P.M. |
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Sections 1 thru 24 |
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Township 33 North, Range 9 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 34 North, Range 9 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 32 North, Range 10 West, N.M.P.M. |
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Sections 1 thru 24 |
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Township 33 North, Range 10 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 34 North, Range 10 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 32 North, Range 11 West, N.M.P.M. |
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Sections 1 thru 24 |
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Township 33 North, Range 11 West, N.M.P.M. |
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Sections 1 thru 36 |
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Township 34 North, Range 11 West, N.M.P.M. |
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Sections 1 thru 36 |
Rule 1. A second well, in addition to the permitted well as provided for by Order No. 112-6, is hereby authorized to be drilled on each of the 320-acre drilling and spacing unit for the production of gas from the Fruitland-Pictured Cliffs and Mesaverde formations underlying the lands described above.
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Said additional well shall be located in the undrilled quarter section of the 320-acre drilling unit, and shall be no closer than 990 feet to the boundaries of the quarter section upon which it is located. |
Rule 2. Three (3) wells, in addition to the permitted well as provided for by Order No. 112-6, are hereby authorized to be drilled on each 640-acre drilling and spacing unit for the production of gas from the Dakota-Morrison format, ion underlying the lands described above.
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Said additional wells, including the permitted well as provided for by Order No. 112-6 and not yet drilled, shall be located on each undrilled quarter section and be no closer than 990 feet to the boundaries of the quarter section upon which it is located. |
Rule 3. An additional well shall be authorized to be drilled on each of the units in cases of fractional sections as described in Rules 2b and 3b of Order No. 112-6, for the production of gas from the Fruitland-Pictured Cliffs, Mesaverde and Dakota-Morrison formations.
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Said additional well shall be located no closer than 990 feet to the boundaries of the unit and no closer than 990 feet from another well producing from the same formation. |
Rule 4. The Director may, without additional notice and hearing, grant exceptions to the above-described well locations, because of topography or surface hazards. For other reasons, exceptions may be granted by the Director, providing the owners of the contiguous and cornering units toward which the proposed location would be moved, file a waiver or consent, in writing, agreeing to said exceptions.
IT IS FURTHER ORDERED, that the provisions in Order No. 112-6 pertaining to the consolidation of all interests in a drilling and spacing unit by a pooling agreement or otherwise, prior to the drilling of a well, is hereby rescinded.
IT IS FURTHER ORDERED, that the remaining provisions of Order No. 112-6 shall remain in effect.
IT IS FURTHER ORDERED, that the rules and regulations contained herein 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, rules and regulations.
ORDERED this 16th day of July, 1979.
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OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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By |
Frank J. Piro, Secretary |