BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND ) CAUSE NOS. 305
ESTABLISHMENT OF FIELD RULES TO GOVERN ) and 232
OPERATIONS IN THE SPACE CITY FIELD AND THE )
WATTENBERG GAS SPACED AREA, ) ORDER NO. 305-2
WELD COUNTY, COLORADO ) and 232-185
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m. on January 7, 1998, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified amended application of North American Resources Company ("NARCO") for an order to approve the Lochbuie No. 1 Well, located 810 feet FNL and 810 feet FWL in the NW¼ NW¼ of Section 31, Township 1 North, Range 65 West, 6th P.M., originally drilled for production of oil from the "J" Sand Formation, as the permitted well for the 80-acre drilling and spacing unit consisting of the W½ NW¼ for production of gas and associated hydrocarbons from the "J" Sand Formation.
The Commission finds as follows:
1. North American Resources Company ("NARCO"), 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.
4. On January 20, 1976, the Commission issued Order No. 305-1, establishing 80-acre drilling and spacing units for the production of oil and associated hydrocarbons from the "D" Sand and "J" Sand Formations underlying Section 31, Township 1 North, Range 65 West, 6th P.M.
5. In Cause No. 232, the Commission established 320‑acre drilling and spacing units for the production of gas from the "J" Sand Formation in the Wattenberg Field with one well allowed for each unit to be located in the NE¼ and SW¼ and no closer than 990 feet to the boundaries of the quarter section. On August 21, 1979, the Commission issued Order No. 232‑20 which allowed a second well to be drilled on each 320‑acre unit, including Section 31, Township 1 North, Range 65 West, 6th P.M.
6. At the time of the administrative hearing on October 16, 1997, the Hearing Officers recommended that this matter be continued to the January, 1998 hearing so that the Applicant could amend the Application. The application was amended on November 26, 1997 to remove the request to allow the well to be deepened to the Dakota Formation.
7. At the time of the administrative hearing on December 31, 1997, testimony was presented that the Lochbuie No. 1 Well was originally drilled under Order No. 305 as a “J” Sand Formation oil well for the 80 acre drilling and spacing unit consisting of the W½ NW¼ of Section 31. The well is located 180 feet north and 180 feet west of the permitted well location in Cause No. 232 for "J" Sand Formation gas production.
8. Testimony and evidence was presented that the GOR averages 32,775, which is above the 20,000 GOR cutoff for a gas well in the Wattenberg Field. Proceeds for the Lochbuie No. 1 Well have been historically paid on the basis of the 80-acre drilling and spacing unit.
9. Testimony and evidence were presented showing the Lochbuie Well No. 1 will drain only 9.5 acres, which is less than 12% of the requested 80 acre drilling and spacing unit.
10. That in order to prevent waste and protect correlative rights, the W½ of Section 31 should be designated the 320-acre drilling and spacing unit for production of gas and associated hydrocarbons from the “J” Sand Formation under Cause 232; that this 320-acre drilling and spacing unit should be segregated into two 160-acre drilling and spacing units consisting of the NW¼ and the SW¼ of Section 31; and further that the NW¼ should be segregated into two 80-acre drilling and spacing units consisting of the W½ NW¼ and the E½ NW¼ of Section 31.
11. This matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing that approval of the Application is necessary to protect correlative rights and prevent waste.
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 of the application, an order of the Commission should be entered approving the Lochbuie No. 1 Well, located 810 feet FNL and 810 feet FWL in the NW¼ NW¼ of Section 31, Township 1 North, Range 65 West, 6th P.M., originally drilled for production of oil from the "J" Sand Formation, as the permitted well for an 80-acre drilling and spacing unit consisting of the W½ NW¼ for production of gas and associated hydrocarbons from the "J" Sand Formation.
NOW, THEREFORE, IT IS ORDERED, that in order to prevent waste and protect correlative rights, the W½ of Section 31 shall be designated the 320-acre drilling and spacing unit for production of gas and associated hydrocarbons from the “J” Sand Formation under Cause 232; that this 320-acre drilling and spacing unit shall be segregated into two 160-acre drilling and spacing units consisting of the NW¼ and the SW¼ of Section 31; and further that the NW¼ shall be segregated into two 80-acre drilling and spacing units consisting of the W½ NW¼ and the E½ NW¼ of Section 31.
IT IS FURTHER ORDERED, that Cause Nos. 305 and 232 are hereby amended to approve the Lochbuie No. 1 Well, located 810 feet FNL and 810 feet FWL in the NW¼ NW¼ of Section 31, Township 1 North, Range 65 West, 6th P.M., originally drilled for production of oil from the "J" Sand Formation, as the permitted well for an 80-acre drilling and spacing unit consisting of the W½ NW¼ for production of gas and associated hydrocarbons from the "J" Sand Formation.
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 day of February, 1998, as of January 7, 1998.
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
May 18, 2015