IN THE MATTER OF THE PROMULGATION AND
CAUSE NOS. 232 & 518
ESTABLISHMENT OF FIELD RULES TO GOVERN
OPERATIONS IN THE THIRD CREEK FIELD,
ORDER NOS. 232-231
DENVER COUNTY, COLORADO
518-1
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m. on September
17, 1999, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver,
Colorado, after giving Notice of Hearing, as required by law on the verified
application of the City and County of Denver by its attorney and through Oaks
Resources Management, Inc., for an order authorizing a waterflood pilot project
in Section 7, Township 2 South, Range 65 West, 6th P.M. and Section 12, Township
2 South, Range 66 West, 6th P.M.
FINDINGS
The Commission finds as follows:
1. The City and County of Denver by its representative Oaks Resources
Management, Inc. 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.
4. Exhibits and testimony presented at the administrative hearing showed that
all of the surface and minerals in and surrounding the waterflood pilot area in
Section 7, Township 2 South, Range 65 West, 6th P.M. and Section 12, Township 2
South, Range 66 West, 6th P.M. are owned by the City and County of Denver, with
the exception of a ten (10) acre tract consisting of the NE¼ NE¼ NW¼ of Section
18, Township 2 South, Range 65 West, 6th P.M. which is owned by North American
Resources Company (“NARCO”). The NARCO tract is located 2,310 feet from the
proposed injection well, the Champlin 117 A-2 Well (“the proposed injection
well”) located in the NE¼ SW¼ of Section 7, Township 2 South, Range 65 West, 6th
P.M. Further testimony presented established that, although the NARCO tract is
not within the waterflood pilot area, notice of the waterflood pilot application
was served to NARCO on August 18, 1999.
5. Exhibits and testimony presented at the administrative hearing showed that
the “J” Sand Formation in the proposed waterflood pilot area is an unusually
well-developed reservoir with well-defined compartments of good reservoir
quality. Additional testimony indicated that the proposed injection well has
approximately 40 feet of thickness in the “J” Sand Formation at a depth of
approximately 8,275 feet, and is located in an area of desirable reservoir
quality for evaluating a waterflood pilot project.
6. Exhibits and testimony presented at the administrative hearing indicated that
the original “J” Sand Formation wells in the Third Creek Field have recovered
approximately 2.2 million barrels of oil, or 22% of the original oil in place,
and that an incremental 1 million barrels, or an additional 10% of the original
oil in place, could be recovered by a waterflood project in the field. The
purpose of the waterflood pilot project is to confirm injectivity and other
reservoir parameters and to evaluate the economics of expanding the flood area
to include all of Sections 7 and 18, Township 2 South, Range 65 West, 6th P.M.,
in addition to the SE¼ of Section 12, Township 2 South, Range 66 West, 6th P.M.
7. Exhibits and testimony presented at the administrative hearing indicated that
the well proposed for injection is constructed in a manner that adequately
protects the Fox Hills fresh water aquifer.
8. Exhibits and testimony presented at the administrative hearing indicated that
it is planned to inject water from a water well to be completed in the Arapahoe
aquifer in the SE¼ SW¼ of Section 7, Township 2 South, Range 65 West, 6th P.M.
Further testimony indicated that this water well is expected to be able to
produce the 5,000 barrels per day of water needed for a full waterflood project
if the pilot project is successful.
9. Exhibits and testimony presented at the administrative hearing indicated that
the plan for the waterflood pilot project is to inject into the proposed
injection well until response is observed in the surrounding monitor wells. This
response will be measured by changes in the production in the monitor wells. At
that time, the waterflood feasibility study will be updated and a decision will
be made with regard to submitting an application for a full waterflood operation
on an expanded area.
10. Exhibits and testimony presented at the administrative hearing indicated
that the waterflood feasibility study showed good economics for the waterflood
project with a high rate of return. In addition, the City and County of Denver
will provide a status report of the waterflood pilot project one (1) year from
the commencement of the waterflood operation. The waterflood operation is
expected to commence by the end of October, 1999.
11. That the granting of the application is necessary to increase ultimate
recovery and to prevent waste of hydrocarbons.
12. At the time of the administrative hearing the applicant agreed to be bound
by oral order of the Commission.
13. Based on the facts stated in the application, having received no protests
and having been heard by the Hearing Officer who recommends approval the
Commission should enter an order authorizing a waterflood pilot project in
Section 7, Township 2 South, Range 65 West, 6th P.M. and Section 12, Township 2
South, Range 66 West, 6th P.M.
ORDER
NOW, THEREFORE IT IS ORDERED that a waterflood pilot project in Section 7,
Township 2 South, Range 65 West, 6th P.M. and Section 12, Township 2 South,
Range 66 West, 6th P.M is hereby authorized.
IT IS FURTHER ORDERED that the City and County of Denver shall be required to
provide to the Commission a status report of the waterflood pilot project one
year from the commencement of the waterflood operation.
IT IS FURTHER ORDERED that the injection well proposed for the waterflood pilot
project shall be approved by the Director in accordance with the rules and
regulations of the 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.
ENTERED this 30th day of September, as of September 17, 1999.
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 September 30, 1999
(232-231)