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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 FOR THE WILLIAMS FORK FORMA-TION OF THE MESAVERDE GROUP FOR CERTAIN LANDS IN THE RULISON, PARACHUTE AND GRAND VALLEY FIELDS, GARFIELD COUNTY, COLORADO |
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CAUSE NOS. 139, 440-, 479, 510
ORDER NOS. 139-35, 440-20, 479-8 and 510-5 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m. on April 23, 2001, in Suite 801, the Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of hearing [sic] as required by law, on the application of Barrett Resources Corporation for an order allowing additional wells to be drilled for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group, the equivalent of one (1) well per 20 acres for certain lands in Garfield County, Colorado.
FINDINGS
The Commission finds as follows:
1. Barrett Resources Corporation (“Barrett”), 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 and the terms of the Memorandum of Understanding (“MOU”) between the Commission and the Bureau of Land Management (“BLM”).
4. On February 20, 1990, the Commission issued Order No. 139-14 (Corrected) which established a 320-acre drilling and spacing unit for the below-listed lands and allowed one (1) well to be drilled and completed for production from the Mesaverde Formation on said unit:
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Township 6 South, Range 94 West, 6th P.M. |
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Section 8: |
S½ |
5. On May 16, 1994, the Commission issued Order No. 510-1 which amended Rule 316. (now Rule 318.) to provide that the permitted wells on lands including the below-listed lands should be located no closer than 400 feet from the boundaries of any lease line and no closer than 800 feet from any existing well drilled into and producing from the Williams Fork Formation of the Mesaverde Group:
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Township 7 South, Range 96 West, 6th P.M. |
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Section 3: |
S½, NW¼ |
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Section 4: |
S½, NW¼, S½ NE¼ |
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Section 5: |
SE¼ |
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Section 8: |
E½ |
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Section 9: |
N½ |
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Section 10: |
N½, SE¼ |
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Section 11: |
W½, W½ E½, SE¼ NE¼ |
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Section 14: |
NE¼, W½, NW¼ SE¼ |
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Section 15: |
S½, NE¼ |
6. On February 21, 1995, the Commission issued Order Nos. 440-16, 479-5 and 139-28 which allowed up to eight (8) wells to be drilled and completed on 320-acre drilling and spacing units for production from the Williams Fork Formation of the Mesaverde Group on lands including the below-listed lands:
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Township 6 South, Range 94 West, 6th P.M. |
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Section 2: |
S½ SW¼, NE¼ SW¼, SW¼ SE¼ |
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Section 3: |
S½ S½, NE¼ SE¼, NW¼ SW¼ |
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Section 9: |
All |
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Section 10: |
N½, SW¼, S½ SE¼ |
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Section 11: |
E½, N½ NW¼, SW¼ SW¼ |
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Section 12: |
W½ W½, SE¼ NW¼ |
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Section 13: |
N½ NW¼ |
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Section 16: |
W½ NW¼ |
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Section 17: |
N½, SE¼, N½ SW¼, SE¼ SW¼ |
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Section 18: |
W½, NE¼, NE¼ SE¼ |
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Section 19: |
N½, SE¼, N½ SW¼, SE¼ SW¼ |
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Section 20: |
E½ NW¼ |
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Section 21: |
N½ NW¼ |
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Township 6 South, Range 95 West, 6th P.M. |
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Section 16: |
S½ SW¼ |
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Section 17: |
SE¼ SE¼ |
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Section 20: |
S½, NE¼ NE¼, S½ NE¼ |
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Section 26: |
NW¼, N½ SW¼ |
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Section 27: |
N½, N½ S½, SE¼ SE¼ |
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Section 28: |
NE¼, N½ SE¼, W½ W½ |
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Section 31: |
N½, SW¼, N½ SE¼, SW¼ SE¼ |
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Section 32: |
NW¼, N½ NE¼, SW¼ NE¼ |
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Section 33: |
NW¼ NW¼, SE¼ NW¼ |
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Township 6 South, Range 96 West, 6th P.M. |
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Section 24: |
SE¼ |
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Section 25: |
All |
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Section 26: |
SE¼, S½ NE¼, S½ NW¼, NE¼ NW¼, SE¼ SW¼ |
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Section 27: |
SE¼ SE¼ |
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Section 34: |
S½ NE¼, NE¼ NE¼ |
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Section 35: |
N½, N½ S½, SE¼ SW¼, SW¼ SE¼ |
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Section 36: |
E½ SE¼ |
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Township 7 South, Range 95 West, 6th P.M. |
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Section 6: |
NW¼ NW¼ |
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Township 7 South, Range 96 West, 6th P.M. |
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Section 1: |
NE¼ NE¼ |
7. In addition, Order Nos. 440-16, 479-5 and 139-28 established 160-acre drilling and spacing units on the below-listed lands and allowed up to four (4) wells to be drilled and completed on said units for production from the Williams Fork Formation of the Mesaverde Group:
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Township 6 South, Range 96 West, 6th P.M. |
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Section 36: |
N½ |
8. The below-listed lands are subject to the well location provisions described in Rule 318:
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Township 6 South, Range 94 West, 6th P.M. |
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Section 7: |
SE ¼* |
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* [sic] |
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Township 6 South, Range 95 West, 6th P.M. |
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Section 21: |
All |
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Section 29: |
All |
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Section 30: |
S½, NE¼, S½ NW¼ |
9. On March 5, 2001 Barrett, by its attorney, filed with the Commission a verified application requesting an order from the Commission to allow additional wells to be drilled for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group, the equivalent of one (1) well per 20 acres for the lands described above. On application lands which constitute an existing drilling and spacing unit, the permitted well shall be located no closer than 200 feet from the boundaries of a drilling unit and no closer than 400 feet from any existing Williams Fork Formation well or wells. In cases where the application lands constitute only a portion of an existing drilling and spacing unit, each Williams Fork Formation well upon such application lands shall be located no closer than 200 feet form [sic] the boundaries of the drilling unit, no closer than 200 feet from the boundary of the application lands and no closer than 400 feet from an existing Williams Fork Formation well. On application lands which are not part of an existing drilling and spacing unit, the permitted well shall be no closer than 200 feet from the boundaries of any lease line and no closer than 400 feet from an existing Williams Fork Formation well.
10. Exhibits and testimony presented at the administrative hearing showed the surface, which is predominantly unimproved range land, and the minerals in the application lands are owned completely by the United States of America. All of the minerals have been leased by Barrett.
11. Exhibits and testimony presented at the administrative hearing described the vertically stacked fluvial, meander belt point bar sand bodies in the Williams Fork Formation. Wells drilled under 20-acre density would intersect very few, if any, of the same sand bodies, and only gas from the sand bodies that are intersected by a well is produced into the well.
12. Exhibits and testimony presented at the administrative hearing utilized findings from the Multiwell Experiment project which described the abundant natural fracture systems in the Williams Fork Formation and showed that these systems do not communicate vertically. Williams Fork Formation point bar sand bodies are naturally isolated from each other, and drainage from a well is limited to the aerial extent of the point bar sand bodies.
13. Exhibits and testimony presented at the administrative hearing concludes that there has been no significant depletion of the sand bodies in the application area by offset wells.
14. Exhibits and testimony presented at the administrative hearing showed that production from 20-acre density wells outperform or have similar performance to 40-acre density wells in the same fields.
15. Exhibits and testimony presented at the administrative hearing showed estimated gas in place in the Williams Fork Formation as 87 BCF per section in the Grand Valley and Parachute Fields, and 122 BCF per section in the Rulison Field. The estimated average ultimate recovery per well is 1.25 BCF for the Grand Valley and Parachute Fields and 1.65 BCF in the Rulison Field.
16. Further testimony presented at the administrative hearing asserts that the granting of this application would allow an additional 420 new well locations and that Barrett has told the Bureau of Land Management (“BLM”) there will be no more than one (1) surface location per 40-acre area, which would require wells to be drilled directionally to achieve the equivalent of 20-acre density.
17. Notice of the application was provided to all interested parties in a timely fashion, with the exception of the following lands, for which it was discovered by the Hearing Officers subsequent to the administrative hearing on the matter were not included in the application and for which notice was not provided:
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Township 6 South, Range 94 West, 6th P.M. |
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Section 7: |
SE ¼* |
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* [sic] |
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Township 6 South, Range 95 West, 6th P.M. |
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Section 21: |
All |
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Section 29: |
All |
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Section 30: |
S½, NE¼, S½ NW¼ |
The surface and
mineral estates of the above-listed lands are owned completely by the United
States of America and the mineral estate is leased completely by Barrett. On
April 17, 2001 the BLM signed a letter waiving the twenty (20) day notice prior
to the hearing on these lands.
18. The BLM has filed with the Commission a letter concurring with the technical merits of the application showing that increased density is needed for the proper development of the Williams Fork Formation.
19. At the time of the administrative hearing, Barrett agreed to be bound by oral order of the Commission.
20. Based on the facts stated in the verified application, having received no protests and having been heard by the Hearing Officer who recommends approval, the Commission should enter an order allowing additional wells to be drilled for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group, the equivalent of one (1) well per 20 acres for the lands described above in the Rulison, Parachute and Grand Valley Fields, Garfield County, Colorado. On application lands which constitute an existing drilling and spacing unit, the permitted well shall be located no closer than 200 feet from the boundaries of a drilling unit and no closer than 400 feet from any existing Williams Fork Formation well or wells. In cases where the application lands constitute only a portion of an existing drilling and spacing unit, each Williams Fork Formation well upon such application lands shall be located no closer than 200 feet from the boundaries of the drilling unit, no closer than 200 feet from the boundary of the application lands and no closer than 400 feet from any existing Williams Fork Formation well. On application lands which are not part of an existing drilling and spacing unit, the permitted well shall be no closer than 200 feet from the boundaries of any lease line and no closer than 400 feet from an existing Williams Fork Formation well.
ORDER
NOW, THEREFORE, IT IS ORDERED, that additional wells shall be allowed to be drilled for the production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group, the equivalent of one (1) well per 20 acres for the lands described below in the Rulison, Parachute and Grand Valley Fields, Garfield County, Colorado. On application lands which constitute an existing drilling and spacing unit, the permitted well shall be located no closer than 200 feet from the boundaries of a drilling unit and no closer than 400 feet from any existing Williams Fork Formation well or wells. In cases where the application lands constitute only a portion of an existing drilling and spacing unit, each Williams Fork Formation well upon such application lands shall be located no closer than 200 feet from the boundaries of the drilling unit, no closer than 200 feet from the boundary of the application lands and no closer than 400 feet from any existing Williams Fork Formation well. On application lands which are not part of an existing drilling and spacing unit, the permitted well shall be no closer than 200 feet from the boundaries of any lease line and no closer than 400 feet from an existing Williams Fork Formation well.
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Township 6 South, Range 94 West, 6th P.M. |
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Section 2: |
S½ SW¼, NE¼ SW¼, SW¼ SE¼ |
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Section 3: |
S½ S½, NE¼ SE¼, NW¼ SW¼ |
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Section 7: |
SE¼ |
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Section 8: |
S½ |
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Section 9: |
All |
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Section 10: |
N½, SW¼, S½ SE¼ |
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Section 11: |
E½, N½ NW¼, SW¼ SW¼ |
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Section 12: |
W½ W½, SE¼ NW¼ |
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Section 13: |
N½ NW¼ |
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Section 16: |
W½ NW¼ |
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Section 17: |
N½, SE¼, N½ SW¼, SE¼ SW¼ |
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Section 18: |
W½, NE¼, NE¼ SE¼ |
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Section 19: |
N½, SE¼, N½ SW¼, SE¼ SW¼ |
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Section 20: |
E½ NW¼ |
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Section 21: |
N½ NW¼ |
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Township 6 South, Range 95 West, 6th P.M. |
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Section 16: |
S½ SW¼ |
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Section 17: |
SE¼ SE¼ |
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Section 20: |
S½, NE¼ NE¼, S½ NE¼ |
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Section 21: |
All |
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Section 26: |
NW¼, N½ SW¼ |
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Section 27: |
N½, N½ S½, SE¼ SE¼ |
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Section 28: |
NE¼, N½ SE¼, W½ W½ |
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Section 29: |
All |
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Section 30: |
S½, NE¼, S½ NW¼ |
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Section 31: |
N½, SW¼, N½ SE¼, SW¼ SE¼ |
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Section 32: |
NW¼, N½ NE¼, SW¼ NE¼ |
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Section 33: |
NW¼ NW¼, SE¼ NW¼ |
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Township 6 South, Range 96 West, 6th P.M. |
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Section 19: |
N½, SE¼ |
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Section 20: |
W½ SW¼ |
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Section 24: |
SE¼ |
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Section 25: |
All |
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Section 26: |
SE¼, S½ NE¼, S½ NW¼, NE¼ NW¼, SE¼ SW¼ |
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Section 27: |
SE¼ SE¼ |
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Section 29: |
NW¼ NW¼, N½ SW¼, SW¼ SW¼ |
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Section 30: |
NE¼ |
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Section 32: |
NW¼ NW¼, S½ S½ |
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Section 33: |
S½ SW¼ |
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Section 34: |
S½ NE¼, NE¼ NE¼ |
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Section 35: |
N½, N½ S½, SE¼ SW¼, SW¼ SE¼ |
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Section 36: |
E½ SE¼,N½ |
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Township 7 South, Range 95 West, 6th P.M. |
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Section 6: |
NW¼ NW¼ |
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Township 7 South, Range 96 West, 6th P.M. |
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Section 1: |
NE¼ NE¼ |
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Section 3: |
S½, NW¼ |
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Section 4: |
S½, NW¼, S½ NE¼ |
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Section 5: |
SE¼ |
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Section 8: |
E½ |
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Section 9: |
N½ |
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Section 10: |
N½, SE¼ |
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Section 11: |
W½, W½ E½, SE¼ NE¼ |
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Section 14: |
NE¼, W½, NW¼ SE¼ |
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Section 15: |
S½, NE¼ |
IT IS FURTHER ORDERED, that the provisions contained in the above order 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.
ENTERED this 2nd day of May 2001, as of April 23, 2001.
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OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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By |
Patricia C. Beaver, Secretary |
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
May 2, 2001