BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION

AND ESTABLISHMENT OF FIELD RULES TO     

GOVERN OPERATIONS IN THE RULISON

FIELD, GARFIELD COUNTY, COLORADO

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CAUSE NO.   139

 

ORDER NO.   139-66

CORRECTED

 

REPORT OF THE COMMISSION

 

                        This cause came on for hearing before the Commission at 8:00 a.m. on October 23, 2006, in Room 200, Las Animas County Court House, 200 East First Street, Trinidad, Colorado, for an order to allow the equivalent of one (1) well per 10 acres to be drilled on 640-acre and 320-acre drilling and spacing units, on certain lands in Township 6 South, Range 94 West, 6th P.M., for production from the Mesaverde Group.

 

FINDINGS

 

                        The Commission finds as follows:

 

            1.  Williams Production RMT Company (“Williams”), 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 April 20, 1990, the Commission issued Order No. 139-16, corrected November, 1990, which among other things, established 640-acre drilling and spacing units for certain lands including the below-listed, for the production of gas and associated hydrocarbons from the Mesaverde Formation:

 

Township 6 South, Range 94 West, 6th P.M.

Sections 25 and 26:    All

Section 34:                  E½, E½ W½

Sections 35 and 36:    All

           

In addition, the order established 320-acre drilling and spacing units, for certain lands including the below-listed, for the production of gas and associated hydrocarbons from the Mesaverde Formation:

 

Township 6 South, Range 94 West, 6th P.M.

Section 22:      E½ SE¼

Section 23:      SE¼, W½ SW¼, SE¼ SW¼

Section 24:      N½

Section 27:      E½ SW¼, SE¼, S½ NE¼, NE¼ NE¼

 

Subsequent orders in Cause No. 139 have been issued allowing additional wells to be drilled on existing 640-acre and 320-acre drilling and spacing units for production from the Williams Fork Formation.

 

                        5.  On August 31, 2006, Williams, by its attorney, filed with the Commission a verified application for an order to allow the equivalent of one well per 10 acres to be drilled on the below-listed 640-acre and 320-acre drilling and spacing units, for production from the Mesaverde Group:

 

Township 6 South, Range 94 West, 6th P.M.

Section 22:                  E½ SE¼

Section 23:                  SE¼, W½ SW¼, SE¼ SW¼

Section 24:                  N½

Sections 25 and 26:    All

Section 27:                  E½ SW¼, SE¼, S½ NE¼, NE¼ NE¼

Section 34:                  E½, E½ W½

Sections 35 and 36:    All

           

All future Williams Fork Formation wells should be located downhole anywhere upon such lands but no closer than 100 feet from the outside boundary of the drilling and spacing unit unless such unit boundary abuts or corners lands in respect of which the Commission has not at the time of the drilling permit application granted the right to drill 10-acre density wells, in which event the well may 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 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission.  Wells will 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 Director of the Colorado Oil and Gas Conservation Commission.

6.  On October 11, 2006, Williams, by its attorney, filed with the Commission a written request to approve the application based on the merits of the verified application and the supporting exhibits. 

 

                        7. Testimony and exhibits submitted in support of the application showed where Williams operates approximately 58,840 acres of land with approved Williams Fork Formation ten acre well density of which 32,100 acres are fee lands and 26,740 acres are federal lands.  The subject application lands total approximately 4,080 acres and contain approximately 3,385 acres of fee lands and approximately 695 acres of federal lands.

 

8.  Testimony and exhibits submitted in support of the application showed the Mesaverde Group is Upper Cretaceous in age and consists of the Iles Formation, which are marine deposits, and the Williams Fork Formation, which are non-marine deposits. The productive sandstones throughout the Williams Fork Formation are laterally discontinuous, are naturally fractured, have microdarcy permeability, and average between 6% and 10% porosity.

 

9.  Testimony and exhibits submitted in support of the application showed that the average width measured sand bodies is 682 feet, that the sands usually do not correlate when examined on the equivalent of 10-acre density, and that sand bodies in the same stratigraphic horizon may be isolated.

 

10. Testimony and exhibits submitted in support of the application showed that fracture orientation is important to the optimization of the bottom hole well placement in 10-acre density development, and that wells drilled with no consideration of fracture orientation are the poorer performers, measuring more depletion.

 

11.  Testimony and exhibits submitted in support of the application showed that the majority of the sand bodies completed within 10-acre density pilot project wells have no or limited depletion.

 

12. Testimony and exhibits submitted in support of the application showed that the new 10-acre density wells are better performers than the older 40-acre density parent wells and as good as the 20-acre density development wells, confirming the success and need of 10-acre density development to maximize gas in place recovery.

 

                        13.       The above-referenced testimony and exhibits show that the proposed increased well density will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of gas, and will not violate correlative rights.

 

                        14.  Williams Production RMT Company agreed to be bound by oral order of the Commission.

 

                        15.  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.b., the Commission should enter an order to allow the equivalent of one (1) well per 10 acres to be drilled on 640-acre and 320-acre drilling and spacing units, on certain lands in Township 6 South, Range 94 West, 6th P.M., for production from the Mesaverde Group.

 

ORDER

 

                        NOW, THEREFORE IT IS ORDERED, that the equivalent of one well per ten (10) acres is hereby approved to be drilled on the below-listed 640-acre and 320-acre drilling and spacing units, for production from the Williams Fork Formation of the Mesaverde Group:

 

Township 6 South, Range 94 West, 6th P.M.

Section 22:                  E½ SE¼

Section 23:                  SE¼, W½ SW¼, SE¼ SW¼

Section 24:                  N½

Sections 25 and 26:    All

Section 27:                  E½ SW¼, SE¼, S½ NE¼, NE¼ NE¼

Section 34:                  E½, E½ W½

Sections 35 and 36:    All

 

IT IS FURTHER ORDERED, that all future Williams Fork Formation wells shall be located downhole anywhere upon such lands but no closer than 100 feet from the outside boundary of the drilling and spacing unit unless such unit boundary abuts or corners lands in respect of which the Commission has not at the time of the drilling permit application granted the right to drill 10-acre density wells, in which event the well may 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 10-acre density downhole drilling for Williams Fork Formation wells has not been ordered by the Commission.

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 Director of the Colorado Oil and Gas Conservation Commission.

                        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.

 

                        ENTERED this  15th day of November, 2006, as of October 23, 2006.

                        

                        CORRECTED this _________ day of October, 2007, as of October 23, 2006.

 

                                                                        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

October 16, 2007