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 MAMM CREEK FIELD,

GARFIELD COUNTY, COLORADO

)

)

)

)

CAUSE NO.   191

 

ORDER NO.   191-13

CORRECTED

 

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission at 9:00 a.m. on January 9, 2006, Suite 801, in The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to establish a 320-drilling and spacing unit and an approximate 260-acre drilling and spacing unit for the production of gas from the Williams Fork Formation of the Mesaverde Group, for certain lands in Township 6 South, Ranges 92 and 93 West, 6th P.M.

 

FINDINGS

 

                        The Commission finds as follows:

 

            1.  Antero Resources Corporation (“Antero”), 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.  Rule 318.a. of the Rules and Regulations of the 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, unless authorized by order of the Commission upon hearing.  Section 13, Township 6 South, Range 93 West, 6th P.M. and Section 18, Township 6 South, Range 92 West, 6th P.M. are subject to this Rule.

 

5.  On November 17, 2005, Antero, by its attorney, filed with the Commission a verified application for an order to establish a 320-drilling and spacing unit (or in the case of the S˝ of Section 18 an approximate 260-acre drilling and spacing unit) for the production of gas from the Williams Fork Formation of the Mesaverde Group, for the below-listed lands.  For all future Williams Fork Formation wells to be drilled on these lands, wells should be located downhole no closer than 100 feet from the boundaries of the unit unless such unit abuts or corners lands in respect of which the Director of the Commission has not at the time of drilling permit application granted the right to drill Williams Fork Formation 10-acre density wells, in which event the wells should be drilled downhole no closer than 200 feet from the unit 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.  In addition, wells drilled on the application lands will be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by the Colorado Oil and Gas Conservation Commission.

Township 6 South, Range 93 West, 6th P.M.

Section 13:      S˝

 

Township 6 South, Range 92 West, 6th P.M.

Section 18:      S˝

 

                        6.  Testimony and exhibits presented at the administrative hearing showed the application lands in relation to other increased density areas previously approved by the Colorado Oil and Gas Conservation Commission, Antero Resources’ leasehold in the application lands, and indicated that a portion of the application lands are utilized by the Garfield County Airport.

 

                        7.  Testimony and exhibits presented at the administrative hearing showed the geological nature of the Williams Fork Formation in the application area, sand depositional models for the Williams Fork Formation indicating depositional discontinuities in the sands of the Williams Fork Formation, and that the average sand width for the Williams Fork Formation is approximately four hundred (400) feet.

 

                        8.  Testimony and exhibits presented at the administrative hearing showed that increased well density has increased gas production and would increase the ultimate gas recovery from the Williams Fork Formation in analogous 10-acre development areas located near the application lands, that increasing well density from twenty (20) to ten (10) acres would increase estimated ultimate recovery by approximately 6.0 BCF within an analogous development area located near the application lands, and that the proposed wells within the application lands would have an undiscounted payout in 4.47 years assuming production characteristics similar to the analogous wells.  

 

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

 

                        10.  Antero Resources Corporation agreed to be bound by oral order of the Commission.

 

                        11.  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 establishing a 320-drilling and spacing unit and an approximate 260-acre drilling and spacing unit for the production of gas from the Williams Fork Formation of the Mesaverde Group, and allow the equivalent of one well per 10 acres to be drilled in said units, for certain lands in Township 6 South, Ranges 92 and 93 West, 6th P.M.

 

ORDER

 

            NOW, THEREFORE IT IS ORDERED, that a 320-drilling and spacing unit (or in the case of the S˝ of Section 18 approximate 260-acre drilling and spacing unit) is hereby established for the Williams Fork Formation of the Mesaverde Group, for the below-listed lands:

Township 6 South, Range 93 West, 6th P.M.

Section 13:      S˝

 

Township 6 South, Range 92 West, 6th P.M.

Section 18:      S˝

 

IT IS FURTHER ORDERED, that the equivalent of one well per 10 acres is hereby approved for the above-described units.

 

IT IS FURTHER ORDERED, that all future Williams Fork Formation wells to be drilled on these lands shall be located downhole no closer than 100 feet from the boundaries of the unit unless such unit abuts or corners lands in respect of which the Director of the Commission has not at the time of drilling permit application granted the right to drill Williams Fork Formation 10-acre density wells in which event the wells shall be drilled downhole no closer than 200 feet from the unit 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 drilled on the application lands shall be drilled from the surface either vertically or directionally from no more than one pad located on a given quarter quarter section (or lots or parcels approximately equivalent thereto) unless exception is granted by 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 19th day of January, 2006, as of January 9, 2006.

 

                        CORRECTED this                 day of February, 2006, as of January 9, 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

February 28, 2006