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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 MAMM CREEK FIELD, GARFIELD COUNTY, COLORADO |
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CAUSE NO. 191
ORDER NO. 191-24 |
This cause came on for hearing before the Commission at 9:00 a.m. on April 24, 2006, Suite 801, in The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to establish 320-drilling and spacing units consisting of the S½ of Sections 14 through 17, and the N½ of Section 17, all in Township 6 South, Range 92 West, 6th P.M. for the production of gas from the Williams Fork Formation of the Mesaverde Group, and to allow the equivalent of one well per 10 acres to be drilled on said units. For all future Williams Fork Formation wells to be drilled on these lands, the well 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 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 unless exception is granted by the Colorado Oil and Gas Conservation Commission.
FINDINGS
The Commission finds as follows:
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. Section 15, Township 6 South, Range 93 West, 6th P.M. is subject to this Rule.
5. On January 10, 2005, the Commission issued Order No. 191-8, which among other things, allowed wells to be drilled in the SE¼ SE¼ of Section 14 and the SW¼ SE¼ of Section 16, in Township 6 South, Range 92 West, 6th P.M., the equivalent of one well per 10 acres for the production of gas from the Williams Fork Formation, with the well to be located downhole anywhere upon such lands but no closer than 100 feet from the boundaries of any lease line unless such lease line abuts or corners lands in respect of which the Commission has not at the time of drilling permit application granted the right to drill 10-acre density wells, in which event the wells should be drilled downhole no closer than 200 feet from the lease line 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.
6. On February 22, 2006, amended on March 8, 2006, Antero Resources Corporation, by its attorney, filed with the Commission a verified application for an order to establish 320-drilling and spacing units consisting of the S½ of Sections 14 through 17, and the N½ of Section 17, all in Township 6 South, Range 92 West, 6th P.M. for the production of gas from the Williams Fork Formation of the Mesaverde Group, and to allow the equivalent of one well per 10 acres to be drilled on said units. For all future Williams Fork Formation wells to be drilled on these lands, the well 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 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 unless exception is granted by the Colorado Oil and Gas Conservation Commission.
7. At the time of the administrative hearing, Antero amended its application to abandon the previously requested 320-acre drilling and spacing unit consisting of the S½ of Section 14 and to instead establish the SW¼ of Section 14 as a 160-acre drilling and spacing unit, the N½ SE¼ as an 80-acre drilling and spacing unit, and the SW¼ SE¼ of Section 14 as a 40-acre drilling and spacing unit. In addition, Antero removed the S½ of Section 16 from the application lands altogether.
8. Testimony and exhibits presented at the administrative hearing showed that Antero has obtained additional leasehold in the area with the result that all of the areas shown as partial interest in Sections 14 and 15 are now 100% Antero leasehold. Additional testimony showed that a portion of the application land is located in the town of Silt and that Antero has reached a surface use agreement with the surface developer of this land.
9. Testimony and exhibits presented at the administrative hearing showed 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.
10. 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 the Mamm Creek Field 10-acre development area located nearby in Section 32, Township 6 South, Range 92 West, 6th P.M.
11. Testimony and exhibits presented at the administrative hearing showed that increasing well density from twenty (20) to ten (10) acres has increased estimated ultimate recovery by 9.09 BCF within the development area located nearby in Section 32, Township 6 South, Range 92 West, 6th P.M.
12. Testimony and exhibits presented at the administrative hearing showed that the proposed wells within the application area would have an undiscounted payout in 4.14 years assuming production characteristics similar to the wells analyzed in Section 32, Township 6 South, Range 92 West, 6th P.M.
13. 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.
14. Antero Resources Corporation agreed to be bound by oral order of the Commission.
ORDER
NOW, THEREFORE, IT IS ORDERED, that 320-drilling and spacing units are hereby established for the production of gas from the Williams Fork Formation of the Mesaverde Group, allowing the equivalent of one well per 10 acres to be drilled on said units for the below-listed lands:
Township 6 South, Range 92 West, 6th P.M.
Section 15: S½
Section 17: S½, N½
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.
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