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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 RULISON FIELD, GARFIELD AND MESA COUNTIES, COLORADO
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CAUSE NO. 139
ORDER NO. 139-53 CORRECTED |
This cause came on for hearing before the Commission at 9:00 a.m. on December 6, 2005, Suite 801, in The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to increase the number of wells which can be optionally drilled into and produced from the Williams Fork Formation in certain lands, the equivalent of one Williams Fork Formation well per 10 acres, for the production of gas and associated hydrocarbons from the Williams Fork Formation.
The Commission finds as follows:
1. Presco Inc. (“Presco”), 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 May 18, 2005, the Commission issued Order No. 139-16 which established 640-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Mesaverde Formation including the below-listed lands. On February 13, 2004, the Commission issued Order No. 139-43 which established 40-acre density drilling for the production of gas and associated hydrocarbons from the Williams Fork Formation covering certain lands including the below-listed lands:
Township 7 South, Range 94 West, 6th P.M.
Sections 30 and 31: All
Township 7 South, Range 95 West, 6th P.M.
Sections 25 and 26: All
Sections 35 and 36: All
5. Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that wells drilled in excess of two thousand five hundred (2,500) feet in depth be located not less than six hundred (600) feet from any lease line, and located not less than one thousand two hundred (1,200) feet from any other producible or drilling oil or gas well when drilling to the same common source of supply. The below-listed lands are subject to Rule 318.a.:
Township 7 South, Range 94 West, 6th P.M.
Section 19: Lot 4, SE¼ SW¼, W½ SW¼ SE¼
Section 29: All
Section 32: All
Township 7 South, Range 95 West, 6th P.M.
Section 24: Lots 14, 15, 16, 20
Section 27: Lot 1, S½ NE¼ NW¼, SE¼ NW¼, SW¼ NE¼, N½ NE¼ SW¼, NW¼ SE¼, E½ E½
Sections 33 and 34: All
Township 8 South, Range 95 West, 6th P.M.
Section 3: Lots 6, 7, 8, 10
Section 4: Lots 6, 7, 8, 9, 10
Section 5: Lot 9
Section 8: E½ E½ E½, SE¼ SW¼ SE¼, SW¼ SE¼ SE¼
Section 9: All
Section 10: W½, W½ E½, W½ E½ E½
Section 14: SW¼ NW¼ NW¼, W½ SW¼ NW¼, W½ NW¼ SW¼, SE¼ NW¼ SW¼, SW¼ NE¼ SW¼, N½ SW¼ SW¼, NW¼ SE¼ SW¼
Section 15: W½ NE¼ NE¼, SE¼ NE¼ NE¼, W½ NE¼, SE¼ NE¼, NW¼, N½ S½, N½ S½ S½
Section 16: N½ N½, N½ S½ N½, Lots 2, 3, 7, 8, 9, 10, 11, 12, 13, 14
Section 17: NE¼ NE¼, E½ NW¼ NE¼, NE¼ SW¼ NE¼, N½ SE¼ NE¼, Lot 8
6. On October 4, 2005, Presco, by its attorney, filed with the Commission a verified application for an order to increase the number of wells which can be drilled into and produced from the Williams Fork Formation in the below-listed lands to the equivalent of one Williams Fork Formation well per ten (10) acres:
Township 7 South, Range 94 West, 6th P.M.
Section 19: Lot 4, SE¼ SW¼, W½ SW¼ SE¼
Sections 29 through 32: All
Township 7 South, Range 95 West, 6th P.M.
Section 24: Lots 14, 15, 16, 20
Sections 25 and 26: All
Section 27: Lot 1, S½ NE¼ NW¼, SE¼ NW¼, SW¼ NE¼, N½ NE¼ SW¼, NW¼ SE¼, E½ E½
Sections 33 through 36: All
Township 8 South, Range 95 West, 6th P.M.
Section 3: Lots 6, 7, 8, 10
Section 4: Lots 6, 7, 8, 9, 10
Section 5: Lot 9
Section 8: E½ E½ E½, SE¼ SW¼ SE¼, SW¼ SE¼ SE¼
Section 9: All
Section 10: W½, W½ E½, W/½ E½ E½
Section 14: SW¼ NW¼ NW¼, W½ SW¼ NW¼, W½ NW¼ SW¼, SE¼ NW¼ SW¼, SW¼ NE¼ SW¼, N½ SW¼ SW¼, NW¼ SE¼ SW¼
Section 15: W½ NE¼ NE¼, SE¼ NE¼ NE¼, W½ NE¼, SE¼ NE¼, NW, N½ S½, N½ S½ S½
Section 16: N½ N½, N½ S½ N½, Lots 2, 3, 7, 8, 9, 10, 11, 12, 13, 14
Section 17: NE¼ NE¼, E½ NW¼ NE¼, NE¼ SW¼ NE¼, N½ SE¼ NE¼, Lot 8
7. The application requested that the order allow for the lands subject to Order Nos. 139-16 and 139-43, the permitted downhole location for each Williams Fork Formation well drilled to be located anywhere within the unit but no closer than 100 feet from the unit boundary unless such boundary abuts or corners lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill ten 10-acre density wells, in which event the well should be drilled downhole no closer than 200 feet from that portion of the unit boundary which so abuts or corners the lands in respect of which ten 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission. Further, for the lands subject to Rule 318., all future Williams Fork Formation wells drilled should be located downhole anywhere upon such lands but no closer than 100 feet from the lease line boundary unless such boundary abuts or corners lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill ten 10-acre density wells, in which event the Williams Fork Formation wells to be drilled upon such should be drilled downhole no closer than 200 feet from that portion of the lease boundary which so abuts or corners the lands in respect of which 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission.
8. Testimony and exhibits presented at the administrative hearing showed that Presco owns 2,600 acres of the surface, Chevron owns 3,200 acres of the surface and 1,000 acres of the surface lands are owned by Joan Savage.
9. Testimony and exhibits presented at the administrative hearing showed the stacked fluvial reservoirs in the Mesaverde Group, the producing intervals, and the discontinuity of the sands. Additional testimony described an outcrop study in which 136 sand bodies were measured, indicating an average sand thickness of 9.3 feet and an average lateral sand dimension of 528 feet, and showed that sand bodies located as close as 660 feet apart are likely to not correlate.
10. Testimony and exhibits presented at the administrative hearing showed sand thickness histograms in the Parachute and Battlement Mesa areas containing an average thickness of sand ranging from 6.4 to 8.16 feet, with a median thickness ranging from 3.0 to 3.5 feet. Additional testimony showed that all of the Williams Fork Formation sands are saturated and charged with gas.
11. Testimony and exhibits presented at the administrative hearing showed that for wells in the Rulison Field the estimated ultimate recovery for parent wells is 15.3 BCF, increasing to 23.3 BCF with additional wells, with 8.1 BCF recovered in new gas reserves from additional wells. Additional testimony showed that 73.6 percent of 10-acre well production represents new gas reserves.
12. Testimony and exhibits presented at the administrative hearing showed that the estimated ultimate recovery for wells in the application lands should be similar to the calculations in the Rulison Field pilot area.
13. Testimony and exhibits presented at the administrative hearing showed that payout is expected to occur in 3.42 years, and that wells would be economic.
14. The above-referenced testimony and exhibits show that the proposed density will allow more efficient drainage, will prevent waste, will not violate correlative rights and will assure a greater ultimate recovery of gas and associated hydrocarbons.
15. Presco does not intend to drill more than four (4) Williams Fork Formation wells downhole per governmental quarter quarter section, unless exception is granted by the Commission.
16. Presco Inc. 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 having been heard by the Hearing Officer who recommended approval, the Commission should enter an order to establish 640-acre drilling and spacing units consisting of certain lands in Townships 7 and 8 South, Ranges 94 and 95 West, 6th P.M., and to allow the equivalent of one well per 10 acre, with the permitted well to be located no closer than 100 feet from the unit boundary, for production of gas from the Williams Fork Formation.
NOW, THEREFORE, IT IS ORDERED, that the number of wells which can be drilled into and produced from the Williams Fork Formation is hereby approved, to the equivalent of one Williams Fork Formation well per ten (10) acres in the below-listed lands:
Township 7 South, Range 94 West, 6th P.M.
Section 19: Lot 4, SE¼ SW¼, W½ SW¼ SE¼
Sections 29 through 32: All
Township 7 South, Range 95 West, 6th P.M.
Section 24: Lots 14, 15, 16, 20
Sections 25 and 26: All
Section 27: Lot 1, S½ NE¼ NW¼, SE¼ NW¼, SW¼ NE¼, N½ NE¼ SW¼, NW¼ SE¼, E½ E½
Sections 33 through 36: All
Township 8 South, Range 95 West, 6th P.M.
Section 3: Lots 6, 7, 8, 10
Section 4: Lots 6, 7, 8, 9, 10
Section 5: Lot 9
Section 8: E½ E½ E½, SE¼ SW¼ SE¼, SW¼ SE¼ SE¼
Section 9: All
Section 10: W½, W½ E½, W/½ E½ E½
Section 14: SW¼ NW¼ NW¼, W½ SW¼ NW¼, W½ NW¼ SW¼, SE¼ NW¼ SW¼, SW¼ NE¼ SW¼, N½ SW¼ SW¼, NW¼ SE¼ SW¼
Section 15: W½ NE¼ NE¼, SE¼ NE¼ NE¼, W½ NE¼, SE¼ NE¼, NW, N½ S½, N½ S½ S½
Section 16: N½ N½, N½ S½ N½, Lots 2, 3, 7, 8, 9, 10, 11, 12, 13, 14
Section 17: NE¼ NE¼, E½ NW¼ NE¼, NE¼ SW¼ NE¼, N½ SE¼ NE¼, Lot 8
IT IS FURTHER ORDERED, that for the lands subject to 640-acre drilling and spacing units established in Order No. 139-16, the permitted downhole location for each Williams Fork Formation well shall be located anywhere within the unit but no closer than 100 feet from the unit boundary unless such boundary abuts or corners lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill ten 10-acre density wells, in which event the well shall be drilled downhole no closer than 200 feet from that portion of the unit boundary which so abuts or corners the lands in respect of which ten 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission.
Township 7 South, Range 94 West, 6th P.M.
Section 19: Lot 4, SE¼ SW¼, W½ SW¼ SE¼
Section 29: All
Sections 30 through 32: All
Township 7 South, Range 95 West, 6th P.M.
Section 24: Lots 14, 15, 16, 20
Sections 25 and 26: All
Section 27: Lot 1, S½ NE¼ NW¼, SE¼ NW¼, SW¼ NE¼, N½ NE¼ SW¼, NW¼ SE¼, E½ E½
Sections 33 through 36: All
IT IS FURTHER ORDERED, that for the lands subject to Order No. 139-43, all future Williams Fork Formation wells shall be located downhole anywhere upon such lands but no closer than 100 feet from the lease line boundary unless such boundary abuts or corners lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill ten 10-acre density wells, in which event the Williams Fork Formation wells shall be drilled downhole no closer than 200 feet from that portion of the lease boundary which so abuts or corners the lands in respect of which ten 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission.
Township 7 South, Range 94 West, 6th P.M.
Sections 30 and 31: All
Township 7 South, Range 95 West, 6th P.M.
Sections 25 and 26: All
Sections 35 and 36: All
IT IS FURTHER ORDERED, that for the lands subject to Rule 318., all future Williams Fork Formation wells shall be located downhole anywhere upon such lands but no closer than 100 feet from the lease line boundary unless such boundary abuts or corners lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill ten 10-acre density wells, in which event the Williams Fork Formation wells shall be drilled downhole no closer than 200 feet from that portion of the lease boundary which so abuts or corners the lands in respect of which ten 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission.
Township 8 South, Range 95 West, 6th P.M.
Section 3: Lots 6, 7, 8, 10
Section 4: Lots 6, 7, 8, 9, 10
Section 5: Lot 9
Section 8: E½ E½ E½, SE¼ SW¼ SE¼, SW¼ SE¼ SE¼
Section 9: All
Section 10: W½, W½ E½, W½ E½ E½
Section 14: SW¼ NW¼ NW¼, W½ SW¼ NW¼, W½ NW¼ SW¼, SE¼ NW¼ SW¼, SW¼ NE¼ SW¼, N½ SW¼ SW¼, NW¼ SE¼ SW¼
Section 15: W½ NE¼ NE¼, SE¼ NE¼ NE¼, W½ NE¼, SE¼ NE¼, NW¼, N½ S½, N½ S½ S½
Section 16: N½ N½, N½ S½ N½, Lots 2, 3, 7, 8, 9, 10, 11, 12, 13, 14
Section 17: NE¼ NE¼, E½ NW¼ NE¼, NE¼ SW¼ NE¼, N½ SE¼ NE¼, Lot 8
IT IS FURTHER ORDERED, that wells shall be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section unless exception is granted by the Colorado Oil and Gas Conservation Commission.
IT IS FURTHER ORDERED, that the provisions of the Commission’s Order No. 139-43 relative to drilling within one half (½) mile of the Austral Oil Hayward #25-95 (R-E) Well located in Lot 11 of the NE¼ SW¼ of Section 25, Township 7 South, Range 95 West, 6th P.M., shall not be altered in any way by this order.
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.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
CORRECTED this ______day of December, as of December 6, 2005.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203