Before the Oil and Gas Conservation Commission
of the State of Colorado
In the Matter of the Promulgation and ) Cause No. 112
Establishment of Field Rules to Govern )
This cause came on for hearing before the Commission on December 17, 1990 at 2:00 p.m. in Room 101, State Education Building, 201 East Colfax Avenue, Denver, Colorado, after giving Notice of Hearing as required by law, on the Commission’s own motion to consider recommendations, information and data submitted to establish such other field rules as may be deemed necessary for the efficient and economical development of the Ignacio Blanco Field.
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 recognizes the interests of the Southern Ute Indian Tribe and of the Federal Government in this matter, has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order affecting all lands other than those owned by Indians.
3. The Commission accepted the need for two additional rules through recommendations from the staff and testimony from operators and the public to be adopted field-wide for the Dakota, Mesaverde, Fruitland-Pictured Cliffs and Fruitland Coal formations. These rules should apply to all boreholes, regardless of purpose, which penetrate any or all formations deeper than the lowermost Fruitland Coal member. These rules were deemed necessary to further protect the health, safety and welfare of citizens in the Ignacio Blanco Field area and Order No. 112-61 should be amended to include these rules as Rule 10 and Rule 11; also Order No. 112-6 should be amended to include these rules as Rule 6 and Rule 7.
4. The Commission should recommend to the Southern Ute Indian Tribe that they consider adoption of these additional rules, and that all regulatory agencies with jurisdiction in Ignacio Blanco Field cooperate to the maximum extent possible to implement these rules in the spirit in which they are adopted.
NOW, THEREFORE IT IS ORDERED, that Order No. 112-61 be amended, and that the following rules and regulations shall apply to wells heretofore and hereafter drilled and completed in the Fruitland coal seams of the Ignacio Blanco Field, as herein defined, in addition to other applicable rules and regulations and Orders of the Commission, if any, heretofore adopted and not in conflict herewith:
Rule 1. The Fruitland coals seams shall be defined to include all coal seams within the equivalent of the stratigraphic interval from the top of Fruitland sand to the lowermost coal as shown on the Lithodensity-Compensated Neutron Log dated June 2, 1986 run on the Cugnini Gas Unit “A” No. 1, located in the NW¼ of Section 26, Township 34 North, Range 9 West, N.M.P.M., La Plata County, Colorado and which log shows the top of the Fruitland sand at a depth of 2528 feet and the base of the lowermost coal at a depth of 2962 feet.
Rule 2. Three Hundred Twenty (320) acre drilling and spacing units shall be and the same are hereby established for the production of gas from the Fruitland coal seams, common source of supply, underlying the following described lands in La Plata and Archuleta Counties, Colorado:
Township 32 North (South of the Ute Line)
Range 4 West: Sections 1-24 Range 5 West: Sections 1-24
Range 6 West: Sections 1-24 Range 7 West: Sections 1-24
Range 8 West: Sections 1-24 Range 9 West: Sections 1-24
Range 10 West: Sections 1-24 Range 11 West: Sections 1-24
Township 33 North (South of the Ute Line)
Range 2 West: All Sections Range 3 West: All Sections
Township 34 North (South of the Ute Line)
Range 4 West: Sections 1U – 18U, 19-36
Range 6 West: Sections 3U – 10U, 15U – 18U, All Unsurveyed Lands, 19-22, 27-34
Range 7 West: Sections 1U – 18U, 19-36
Range 8 West: Sections 1U – 18U, 19-36
Range 9 West: Sections 1U – 12U, 13-36
Range 10 West: Sections 1U, 11U, 12U, 13-36
Range 11 West: Sections 13, 24, 25, 35, 36
Township 34 North (North of the Ute Line)
Range 5 West: Section 1-6, 8-17 Range 6 West: Sections 1-11, 14-18
Range 7 West: Sections 1-18 Range 8 West: Sections 1-18
Range 9 West: Sections 1-5, 8-12
Township 34½ North (North of the Ute Line)
Range 9 West: Section 33-36
Township 35 North (North of the Ute Line)
Range 5 West: Unsurveyed Sections 19, 29-32
Range 6 West: Sections 13-36
Range 8 West: Sections 1, 2, 9-36 Range 9 West: Sections 24-27, 34-36
The units shall consist of the N½ and S½ or the E½ and the 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 of the section, no closer than 990 feet to any outer boundary of the unit, nor closer than 130 feet to any interior quarter section line.
Rule 3. The Director may, without additional notice and hearing, grant exceptions to the above-described well locations, because of topography or surface hazards or archeological considerations and grant approval for an option well upon notice being given to contiguous and offset operators or mineral interest owners and no protest being received by the Commission within twenty (20) days of notice being given. 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.
Rule 4. Drilling units in the case of fractional sections as established in Order No. 112-1 Rule 2b and subsequent Orders in Township 32 North, Ranges 6, 7, 8, 9, 10 and 11 West of the New Mexico Principal Meridian lying immediately adjacent to the Colorado – New Mexico state boundary are also hereby established for Ranges 1, 1½, 2, 3, 4, and 5 West and consist of three (3) tracts forty (40) acres wide and extending the entire length of the fractional section in a north-south direction maintaining the same sequence as in Range 6 and shall be the units for production of methane gas from the Fruitland coal seams.
Rule 5. Drilling and spacing units to the north of the Southern Ute line in Township 34 North shall consist of the individual fractional sections with an approximate size of 320-acres. The fractional sections south of the Southern Ute line in Township 34 North for all ranges so affected shall be included with the 320-acre drilling and spacing units in the full section to the south, and the units shall be stand-up units if at all possible.
Rule 6. All well locations approved prior to June 17, 1988 in the alternate quarter section from that ordered in Rule 2 herein above shall be considered to be the designated well for the respective drilling and spacing unit. Those units having two wells for production of methane from the Fruitland coalbed seams approved prior to June 17, 1988 shall remain as two well units. Those wells approved to be drilled in the alternate quarter section in accord with Rule 318 shall be considered to be the designated well for the drilling and spacing unit.
Rule 7. All production casing strings shall be cemented from the casing shoe or total depth, whichever is shallower, to the surface by circulation methods. Operators shall promptly notify the Commission if they are unable to successfully circulate cement, what steps are proposed to determine the cement top, and correct the problem, if necessary.
Rule 8. Any production test of a Fruitland Coalbed Methane well shall consist of a minimum twenty-four (24) hour shut-in period and a three (3) hour flow test. Information recorded shall include all shut-in and flow pressures, time periods and individual flow rates of gas, water and oil as determined by use of a separator, and the method of production.
Rule 9. An initial completion report, Form 5, and basic logs shall be submitted within thirty (30) days of reaching total depth and the setting of production casing. The Form 5 shall contain all information including geologic data except perforated interval, treatments, production test data, and any special experimental data. This initial Form 5 shall be released upon processing by the Commission and shall not be granted “Confidential” status in accord with Rule 306. A complete Form 5 containing the data omitted on the initial report shall be submitted within one (1) year from the setting of production casing or within six (6) months from date of first production, whichever comes first. The complete Form 5 shall be released upon processing by the Commission.
Rule 10. Upon completion of any well, and on wells presently completed, the operator shall equip the bradenhead access to the annulus between the production and surface casing, as well as any intermediate casing, with approved fittings to allow safe and convenient determination of pressure and fluid flow. This rule shall apply to all wells, regardless of function, completed below the Farmington formation. All wells capable of production, injection or observation will be tested by the operator for pressure and flow, with results submitted to OGCC and other appropriate regulatory agencies on approved forms. Certain wells in environmentally sensitive areas as determined by the Director, will be scheduled for immediate testing. In any case, all wells will be tested by July 1, 1991. Complete wellbore sketches with formation tops and detailed cementing data will be furnished on all wells if not previously submitted. Regulatory staff will witness testing on a random basis. Remedial requirements and testing frequency will be determined by the appropriate regulatory agency.
Rule 11. All pits or surface containment facilities used for the storage of produced water or other oil field waste, regardless of source, must be approved by the appropriate regulatory agency. The general five (5) bbl/day and/or blowdown pit exemption as provided for in Rule 325 is rescinded for the Ignacio Blanco field. Existing facilities as well as new construction will be permitted so as to prevent any surface or subsurface discharge into waters or the state, unless otherwise permitted under NPDES.
IT IS FURTHER ORDERED, that the Rules and Regulations of the Commission shall govern all other matters pertaining to the production of methane gas from the Fruitland coal seams until the Commission may issue further orders upon public hearing.
IT IS FURTHER ORDERED, that the Commission recommend to the Southern Ute Indian Tribe that they consider adoption of Rule 10 and Rule 11 herein above, and the Commission further recommends that all regulatory agencies with jurisdiction in Ignacio Blanco Field cooperate to the maximum extent possible to implement these rules in the spirit in which they are adopted.
IT IS FURTHER ORDERED, that the provisions contained the above order shall become effective forthwith.
IT IS FURTHER ORDERED, that the Commission expressly reserves its rights, after giving notice and hearing, to alter, amend or repeal any and/or all of the above orders.
ENTERED this 31st day of December, 1990, as of December 17, 1990.
*CORRECTED this day of November, 1999 as of December 17, 1990.
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
November 7, 2014
*Corrected in accordance with Order No. 112-62 which deleted certain lands from Order No. 112-60 contained in the Pargin Mountain Federal Unit.