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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. 191-56 |
This cause came on for hearing before the Commission at 4:30 p.m. on October 27, 2008, in the Columbine Room at the Sheraton Hotel, 1550 Court Place, Denver, Colorado, for an order to pool all nonconsenting interests in the 320-acre drilling and spacing unit consisting of the S˝ of Section 14, Township 6 South, Range 93 West, 6th P.M., for the development and operation of the Williams Fork Formation, and to pool all nonconsenting interests in the 160-acre drilling and spacing unit consisting of the SEĽ of Section 14, Township 6 South, Range 93 West, 6th P.M., for the development and operation of the Iles Formation.
FINDINGS
The Commission finds as follows:
1. Antero Resources Piceance 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 February 13, 2006, the Commission issued Order No. 191-19, which among other things, established a 320-acre drilling and spacing unit for the S˝ of Section 14, Township 6 South, Range 93 West, 6th P.M. and allowed the equivalent of one well per 10 acres, for the production of gas and associated hydrocarbons from the Williams Fork Formation.
5. On June 5, 2006, the Commission issued Order No. 191-25, which among other things, established 160-acre drilling and spacing units for certain lands including the SEĽ of Section 14, Township 6 South, Range 93 West, 6th P.M., and allowed the equivalent of one well per 10 acres, for the production of gas and associated hydrocarbons from the Iles Formation.
6. On September 8, 2008, Antero, by its attorney, filed with the Commission a verified application for an order to pool all nonconsenting interests in the 320-acre drilling and spacing unit consisting of the S˝ of Section 14, Township 6 South, Range 93 West, 6th P.M., for the development and operation of the Williams Fork Formation, and in the 160-acre drilling and spacing unit consisting of the SEĽ of Section 14, Township 6 South, Range 93 West, 6th P.M., for the development and operation of the Iles Formation.
7. On October 15, 2008, Antero, 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. Sworn written testimony and exhibits were submitted in support of the application.
8. Testimony and exhibits submitted in support of the application showed a list of all consenting and nonconsenting interest owners within the proposed drilling and spacing units. Additional testimony indicated that in the 320-acre drilling and spacing unit consisting of the S˝ of Section 14, Township 6 South, Range 93 West, 6th P.M., for the development and operation of the Williams Fork Formation, Antero has a 57.79% working interest in the unit, and that in the 160-acre drilling and spacing unit consisting of the SEĽ of Section 14, Township 6 South, Range 93 West, 6th P.M., for the development and operation of the Iles Formation, Antero has a 86.13% working interest in the unit. Further testimony showed that Antero has provided the nonconsenting interest owners with offers to lease their mineral interests or to participate in drilling the proposed Gypsum Ranch #B-12 Well. Testimony indicated that such offers and the related Authorities For Expenditure were fair and reasonable and similar to those prevailing in the area, and that the offers were sent via mail and all were received at least thirty (30) days prior to the October 27, 2008 hearing date. Further testimony showed that Antero has complied with the requirements of Rule 530.a. and §34-60-116(7)(d), C.R.S.
9. Antero Resources Piceance Corporation agreed to be bound by oral order of the Commission.
ORDER
NOW, THEREFORE IT IS ORDERED, that, 1. Pursuant to the provisions of §34-60-116 C.R.S., as amended, of the Oil and Gas Conservation Act of the State of Colorado, the nonconsenting interests in 320-acre drilling and spacing unit consisting of the S˝ of Section 14, Township 6 South, Range 93 West, 6th P.M., are hereby pooled for the development and operation of the Williams Fork Formation, and the nonconsenting interests in the 160-acre drilling and spacing unit consisting of the SEĽ of Section 14, Township 6 South, Range 93 West, 6th P.M., are hereby pooled for the development and operation of the Iles Formation.
2. The production obtained from the drilling units shall be allocated to each owner in the units on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within each drilling unit, each owner of an interest in each drilling unit shall be entitled to receive his/her share of the production of the well located on each drilling unit applicable to his/her interest in each drilling unit.
3. Said owners are hereby deemed to have elected not to participate and shall therefore be deemed to be nonconsenting as to the well(s) and be subject to the penalties as provided for by §34-60-116 (7), C.R.S.
4. Any nonconsenting unleased mineral owner within the spacing units shall be treated as the owner of the landowner's royalty to the extent of 12.5% of his/her record title interest, whatever that interest may be, until such time as the consenting owner recovers, only out of the nonconsenting owner's proportionate 87.5% share of production, the costs specified in §34-60-116 (7)(b), C.R.S. as amended. After recovery of such costs, the nonconsenting mineral owner shall then own his/her proportionate 8/8ths share of the well, surface facilities and production, and then be liable for his/her proportionate share of further costs incurred in connection with the well as if he/she had originally agreed to the drilling.
5. The operator of any well drilled on the above-described units shall furnish the nonconsenting owners with a monthly statement of all costs incurred, together with the quantity of oil and gas produced, and the amount of proceeds realized from the sale of production during the preceding month.
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__________day of October, 2008, as of October 27, 2008.
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 28, 2008