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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. 191-25 |
This cause came on for hearing before the Commission at 10:00 a.m. on June 5, 2006, in the Council Chamber Room of the Ambulance Building, 304 West 3rd Street, Wray, Colorado, for an order to establish various 320-acre, 260-acre, 160-acre, 80-acre and 40-acre drilling and spacing units for certain lands in Townships 5 and 6 South, Range 92 West, 6th P.M., and Township 6 South, Range 93 West, 6th P.M., and to allow the equivalent of one (1) well per 10 acres, with the permitted well to be located no closer than 100 feet from the unit boundary, for the production of gas and associated hydrocarbons from the Iles Formation.
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. On January 9, 2006, corrected February 28, 2006, the Commission issued Order No. 191-13, establishing a 320-drilling and spacing unit consisting of the S½ of Section 13, Township 6 South, Range 93 West, 6th P.M., and an approximate 260-acre drilling and spacing unit for the S½ of Section 18, Township 6 South, Range 92 West, 6th P.M., for the production of gas from Williams Fork Formation of the Mesaverde Group
5. On January 9, 2006, corrected February 28, 2006, the Commission issued Order No. 191-14, establishing 320-drilling and spacing units consisting of the N½ of Sections 13 and 14, Township 6 South, Range 93 West, 6th P.M., for the production of gas from the Williams Fork Formation of the Mesaverde Group.
6. On January 9, 2006, corrected February 28, 2006, the Commission issued Order No. 191-15, establishing 320-drilling and spacing units consisting of the N½ and S½ of Section 11, Township 6 South, Range 93 West, 6th P.M., for the production of gas from the Williams Fork Formation of the Mesaverde Group.
7. On January 9, 2006, corrected on February 28, 2006, the Commission issued Order No. 191-16, establishing a 320-drilling and spacing unit consisting of the N½ of Section 32, Township 5 South, Range 92 West, 6th P.M., for the production of gas from the Williams Fork Formation of the Mesaverde Group.
8. On February 13, 2006, the Commission issued Order No. 191-18, establishing a 320-acre drilling and spacing unit consisting of the S½ of Section 32, Township 5 South, Range 92 West, 6th P.M., for the production of gas from the Williams Fork Formation of the Mesaverde Group
9. On February 13, 2006, the Commission issued Order No. 191-19, establishing a 320-acre drilling and spacing unit consisting of the S½ of Section 14, Township 6 South, Range 93 West, 6th P.M., for the production of gas from the Williams Fork Formation of the Mesaverde Group.
10. On February 13, 2006, the Commission issued Order No. 191-20, establishing 320-acre drilling and spacing units consisting of the N½ and S½ of Section 2, Township 6 South, Range 93 West, 6th P.M., for the production of gas from the Williams Fork Formation of the Mesaverde Group.
11. On February 13, 2006, the Commission issued Order No. 191-21, establishing a 320-acre drilling and spacing unit consisting of E½ of Section 15, Township 6 South, Range 93 West, 6th P.M., for the production of gas from the Williams Fork Formation of the Mesaverde Group.
12. On April 24, 2006, the Commission issued Order No. 191-24, establishing 320-drilling and spacing units consisting of the S½ of Sections 15 and 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. In addition, the order established a 160-acre drilling and spacing unit consisting of the SW¼ of Section 14, an 80-acre drilling and spacing unit consisting of the N½ SE¼, and a 40-acre drilling and spacing unit consisting of the SW¼ SE¼ of Section 14, 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.
13. On October 31, 2005, the Commission issued Order No. 523-2, establishing 320-acre drilling and spacing units consisting of the N½ of Sections 14 and 15 and the S½ of Sections 9 and 10, Township 6 South, Range 92 West, 6th P.M., for production of gas and associated hydrocarbons from the Williams Fork Formation of the Mesaverde Group.
14. All of the above-listed Orders in Finding Nos. 4 through 13 allowed the equivalent of one (1) well per 10 acres, with all future Williams Fork Formation wells to 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 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. In addition, wells drilled on the above-described 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.
15. 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. Portions of Sections 7, 8, and 18, and the E½ NE¼, NW¼ NE¼ of Section 16, Township 6 South, Range 92 West, 6th P.M., and Section 12 of Township 6 South, Range 93 West, 6th P.M., are subject to this Rule.
16. On April 18, 2006, Antero Resources Corporation, by its attorney, filed with the Commission a verified application for an order to establish 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Iles Formation of the Mesaverde Group, for the following lands:
Township 5 South, Range 92 West, 6th P.M.
Section 32: N½
Section 32: S½
Township 6 South, Range 92 West, 6th P.M.
Section 9: S½
Section 10: S½
Section 14: N½
Section 15: N½
Section 15: S½
Section 17: N½
Section 17: S½
Township 6 South, Range 93 West, 6th P.M.
Section 2: N½
Section 2: S½
Section 11: N½
Section 11: S½
Section 13: N½
Section 13: S½
Section 14: N½
Section 14: S½
Section 15: E½
The order should also allow the equivalent of one well per 10 acres to be drilled on the above-requested drilling and spacing units. For all future Iles 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 Iles Formation 10-acre density wells, in which event the wells should be drilled downhole no closer than 400 feet from the unit which so abuts or corners the lands in respect of which 10-acre density downhole drilling for Iles 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.
Township 6 South, Range 92 West, 6th P.M.
Section 16: E½ NE¼, NW¼ NE¼
Portions of Section 12 of Township 6 South, Range 93 West, as well as portions of Sections 7, 8 and 18 of Township 6 South, Range 92 West, described as follows:
Beginning at the Southwestern corner of Section 12; thence North 64°50’20” East a distance of 2975 feet; thence North 66°30’ East a distance of 300.70 feet; thence North 69°53’ East a distance of 453.30 feet; thence North 75°31’ East a distance of 551.10 feet; thence North 78°41’ East a distance of 764.30 feet; thence North 78°10’ East a distance of 379.80 feet; thence North 82°34’ East a distance of 278.10 feet; thence North 78°01’ East a distance of 1011.30 feet; thence North 77°24’ East a distance of 1677.20 feet to a point on the East line of Section 12; thence North 78°47’ East a distance of 2001.30 feet; thence North 6°20’ East a distance of 55.90 feet; thence North 89°39’ East a distance of 1024.80 feet; thence North a distance of 154.30 feet; thence South 88°52’ East a distance of 1253.40 feet; thence South 0°49’ West a distance of 432.20 feet; thence North 67°05’ East a distance of 673 feet; thence North 76°22’ East a distance of 141.30 feet; thence South 78°14’ East a distance of 102 feet; thence North 71°34’ East a distance of 52.60 feet; thence South 86°40’ East a distance of 429.20 feet; thence South 55°59’ East a distance of 200.80 feet; thence South 85°26’ East a distance of 104.30 feet; thence North 87°43’ East a distance of 104.10 feet; thence South 43°29’ East a distance of 894.60 feet; thence North 77°28’ West a distance of 76.70 feet; thence South 65°55’ East a distance of 425.90 feet; thence South 01°04’ West a distance of 1354 feet; thence South 89°16’ East a distance 1314.80 feet; thence South 0°43’ West a distance of 1319 feet; thence North 88°59’ West a distance of 3978 feet to a point along the Westerly line of Section 8; thence South 0°48’ West a distance of 1771.90 feet; thence North 83°25’ West a distance of 160 feet; thence North 1°04’ East a distance of 1722.50 feet to a point South of the Colorado River Meander Land; thence continuing along said Meander Land following twenty-three (23) courses:
1) North 34°34’ West a distance of 341.30 feet
2) West a distance of 49.40 feet
3) North 5°43e 62 feet
4) North 37°52’ West a distance of 211.20 feet
5) North 83°03’ West a distance of 255 feet
6) North 62°06’ West a distance of 237.50 feet
7) North 75°01’ West a distance of 453.70 feet
8) South 84°14’ West a distance of 552.20 feet
9) North a distance of 30.90 feet
10) North 81°52’ West a distance of 567.50 feet
11) South 48°49’ West a distance of 129.70 feet
12) South 54°07’ West a distance of 141.50 feet
13) South 59°37’ West a distance of 164 feet
14) South 71°14’ West a distance of 136.60 feet
15) South 72°59’ West a distance of 125 feet
16) South 83°29’ West a distance of 86 feet
17) South 87°08’ West a distance of 146.60 feet
18) South 72°02’ West a distance of 94.90 feet
19) South 80°06’ West a distance of 156.10 feet
20) South 54°10’ West a distance of 270.90 feet
21) South 81°02’ West a distance of 93.90 feet
22) South 70°49’ West a distance of 118.80 feet
23) South 31°13’ West a distance of 390.90 feet;
Thence leaving said Meander Land South 01°04’ West along Westerly line of Section 7 a distance of 1050.20 feet; thence North 88°50’17” West a distance of 5525 feet to the point of beginning.
The application states that all Williams Fork Formation and Iles Formation wells drilled upon 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 Director of the Colorado Oil and Gas Conservation Commission, and both the Williams Fork and Iles Formations will be reached from a single wellbore.
17. The applicant requested at the Administrative Hearing that the application be amended to withdraw lands in the SW¼ of Section 14 and the SE¼ of Section 15, Township 6 South, Range 93 West, 6th P.M., from the application area.
18. Testimony and exhibits presented at the administrative hearing showed a type log from a well within the application area, to show the Rollins, Cozzette, and Corcoran members of the Iles Formation on a log from the Valley Farms B #1 Well, located in the SE¼ NE¼ of Section 16, Township 6 South, Range 92 West, 6th P.M.
19. Testimony and exhibits presented at the administrative hearing showed a log cross-section of wells within the application area, to show the Rollins, Cozzette, and Corcoran members of the Iles Formation on logs from the North Bank E #1 Well located in the SW¼ NW¼ of Section 12, Township 6 South, Range 93 West, 6th P.M., the Island Park B #2 Well located in the NE¼ SE¼ of Section 7, Township 6 South, Range 92 West, 6th P.M., and the Valley Farms B #1 Well located in the SE¼ NE¼ of Section 16, Township 6 South, Range 92 West, 6th P.M.
20. Testimony and exhibits presented at the administrative hearing showed a well production decline curve, indicating the projected production decline curve for the Valley Farms B #1 Well and Island Park B #2 Well.
21. Testimony and exhibits presented at the administrative hearing showed a calculation of drainage areas for the Cozzette and Corcoran Formations, to show that the calculated drainage acreage of the Cozzette and Corcoran Formations is 4.9 acres for the Island Park B #2 Well and 14.0 acres for the Valley Farms B #1 Well.
22. Testimony and exhibits presented at the administrative hearing showed an economic analysis for the Cozzette and Corcoran Formations, to indicate that it is not economically feasible to drill wells within the application area for production solely from the Cozzette and Corcoran Formations. Additional testimony showed that Iles Formation drilling and completion is not economical as a stand-alone venture, and thus, for the Iles Formation to be completed, Iles Formation production must be combined with Williams Fork Formation production.
23. The above-proposed spacing and well location rules will allow development of the Iles Formation to occur, will not promote waste of hydrocarbon resources, will not violate correlative rights, and will assure the greatest ultimate recovery of gas and associated hydrocarbons from the reservoir.
24. Antero Resources Corporation agreed to be bound by oral order of the Commission.
25. 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 various 320-acre, 260-acre, 160-acre, 80-acre and 40-acre drilling and spacing units for certain lands in Townships 5 and 6 South, Range 92 West, 6th P.M., and Township 6 South, Range 93 West, 6th P.M., and to allow the equivalent of one (1) well per 10 acres, with the permitted well to be located no closer than 100 feet from the unit boundary, for the production of gas and associated hydrocarbons from the Iles Formation.
ORDER
NOW, THEREFORE, IT IS ORDERED, that 320-acre drilling and spacing units are hereby established for the production of gas and associated hydrocarbons from the Iles Formation of the Mesaverde Group, for the following lands:
Township 5 South, Range 92 West, 6th P.M.
Section 32: N½
Section 32: S½
Township 6 South, Range 92 West, 6th P.M.
Section 9: S½
Section 10: S½
Section 14: N½
Section 15: N½
Section 15: S½
Section 17: N½
Section 17: S½
Township 6 South, Range 93 West, 6th P.M.
Section 2: N½
Section 2: S½
Section 11: N½
Section 11: S½
Section 13: N½
Section 13: S½
Section 14: N½
IT IS FURTHER ORDERED, that an approximate 260-acre drilling and spacing unit consisting of the S½ of Section 18, Township 6 South, Range 92 West, 6th P.M., is hereby established for the production of gas and associated hydrocarbons from the Iles Formation of the Mesaverde Group.
IT IS FURTHER ORDERED, that 160-acre drilling and spacing units consisting of the SE¼ of Section 14 and the NE¼ of Section 15, both in Township 6 South, Range 93 West, 6th P.M., are hereby established for the production of gas and associated hydrocarbons from the Iles Formation of the Mesaverde Group.
IT IS FURTHER ORDERED, that a 160-acre drilling and spacing unit consisting of the SW¼ and 40-acre drilling and spacing units consisting of the NW¼ SE¼ and SE¼ SE¼, all in Section 16, Township 6 South, Range 92 West, 6th P.M., are hereby established for the production of gas and associated hydrocarbons from the Iles Formation of the Mesaverde Group.
IT IS FURTHER ORDERED, that the equivalent of one well per 10 shall be allowed to be drilled on the above-requested drilling and spacing units. All future Iles Formation wells 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 Commission has not at the time of drilling permit application granted the right to drill Iles Formation 10-acre density wells, in which event the wells shall be drilled downhole no closer than 400 feet from the unit which so abuts or corners the lands in respect of which 10-acre density downhole drilling for Iles Formation wells has not been ordered by the Commission. In addition, 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 unless exception is granted by the Colorado Oil and Gas Conservation Commission.
Township 6 South, Range 92 West, 6th P.M.
Section 16: E½ NE¼, NW¼ NE¼
Portions of Section 12 of Township 6 South, Range 93 West, as well as portions of Sections 7, 8 and 18 of Township 6 South, Range 92 West, described as follows:
Beginning at the Southwestern corner of Section 12; thence North 64°50’20” East a distance of 2975 feet; thence North 66°30’ East a distance of 300.70 feet; thence North 69°53’ East a distance of 453.30 feet; thence North 75°31’ East a distance of 551.10 feet; thence North 78°41’ East a distance of 764.30 feet; thence North 78°10’ East a distance of 379.80 feet; thence North 82°34’ East a distance of 278.10 feet; thence North 78°01’ East a distance of 1011.30 feet; thence North 77°24’ East a distance of 1677.20 feet to a point on the East line of Section 12; thence North 78°47’ East a distance of 2001.30 feet; thence North 6°20’ East a distance of 55.90 feet; thence North 89°39’ East a distance of 1024.80 feet; thence North a distance of 154.30 feet; thence South 88°52’ East a distance of 1253.40 feet; thence South 0°49’ West a distance of 432.20 feet; thence North 67°05’ East a distance of 673 feet; thence North 76°22’ East a distance of 141.30 feet; thence South 78°14’ East a distance of 102 feet; thence North 71°34’ East a distance of 52.60 feet; thence South 86°40’ East a distance of 429.20 feet; thence South 55°59’ East a distance of 200.80 feet; thence South 85°26’ East a distance of 104.30 feet; thence North 87°43’ East a distance of 104.10 feet; thence South 43°29’ East a distance of 894.60 feet; thence North 77°28’ West a distance of 76.70 feet; thence South 65°55’ East a distance of 425.90 feet; thence South 01°04’ West a distance of 1354 feet; thence South 89°16’ East a distance 1314.80 feet; thence South 0°43’ West a distance of 1319 feet; thence North 88°59’ West a distance of 3978 feet to a point along the Westerly line of Section 8; thence South 0°48’ West a distance of 1771.90 feet; thence North 83°25’ West a distance of 160 feet; thence North 1°04’ East a distance of 1722.50 feet to a point South of the Colorado River Meander Land; thence continuing along said Meander Land following twenty-three (23) courses:
1) North 34°34’ West a distance of 341.30 feet
2) West a distance of 49.40 feet
3) North 5°43e 62 feet
4) North 37°52’ West a distance of 211.20 feet
5) North 83°03’ West a distance of 255 feet
6) North 62°06’ West a distance of 237.50 feet
7) North 75°01’ West a distance of 453.70 feet
8) South 84°14’ West a distance of 552.20 feet
9) North a distance of 30.90 feet
10) North 81°52’ West a distance of 567.50 feet
11) South 48°49’ West a distance of 129.70 feet
12) South 54°07’ West a distance of 141.50 feet
13) South 59°37’ West a distance of 164 feet
14) South 71°14’ West a distance of 136.60 feet
15) South 72°59’ West a distance of 125 feet
16) South 83°29’ West a distance of 86 feet
17) South 87°08’ West a distance of 146.60 feet
18) South 72°02’ West a distance of 94.90 feet
19) South 80°06’ West a distance of 156.10 feet
20) South 54°10’ West a distance of 270.90 feet
21) South 81°02’ West a distance of 93.90 feet
22) South 70°49’ West a distance of 118.80 feet
23) South 31°13’ West a distance of 390.90 feet;
Thence leaving said Meander Land South 01°04’ West along Westerly line of Section 7 a distance of 1050.20 feet; thence North 88°50’17” West a distance of 5525 feet to the point of beginning.
IT IS FURTHER ORDERED, that all Williams Fork Formation and Iles Formation wells drilled upon 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 unless exception is granted by the Director of the Colorado Oil and Gas Conservation Commission, and both the Williams Fork and Iles Formations shall be reached from a single wellbore.
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