IN THE MATTER OF THE PROMULGATION AND
CAUSE NO. 317
ESTABLISHMENT OF FIELD RULES TO GOVERN
OPERATIONS IN THE WHISPER FIELD,
ORDER NO. 317-6
YUMA COUNTY, COLORADO
REPORT OF THE COMMISSION
This Cause came on for hearing before the Commission on October 29, 2001, at
10:00 a.m. in Suite 801, 1120 Lincoln Street, Denver, Colorado after giving
Notice of Hearing, as required by law on the application of Rosewood Resources,
Inc., for an order to allow an optional second well to be drilled on certain
160-acre drilling and spacing units for production of gas and associated
hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Rosewood Resources, Inc. 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 August 22, 1978, the Commission issued Order No. 317-3 which established
160-acre drilling and spacing units for the production of gas and associated
hydrocarbons from the Niobrara Formation for the below-listed lands with the
permitted well to be located no closer than 900 feet from the boundaries of the
quarter section which it is located. On June 4, 1999, the Commission issued
Order No. 317-5 which allowed an additional well to be drilled and completed in
Section 16, Township 3 North, Range 47 West, 6th P.M.
Township 3 North, Range 47 West, 6th P.M.
Sections 3-5: All
Sections 8-10: All
Section 15: All
Section 17: All
Sections 20-22: All
5. On September 10, 2001, Rosewood Resources, Inc. (“Rosewood”) filed with the
Commission a verified application for an order allowing an optional second well
to be drilled on the 160-acre drilling and spacing units described above for the
production of gas from the Niobrara Formation with the permitted well to be
located no closer than 560 feet from the outer boundaries of 160-acre drilling
and spacing unit. In addition, Rosewood requested that for any 160-acre drilling
and spacing unit which does not currently have a well, the initial well shall
also be located no closer than 560 feet from the outer boundaries of the
160-acre drilling and spacing unit.
6. Testimony and exhibits presented at the administrative hearing indicated that
at the request of the Yuma County Local Governmental Designee, Rosewood sent
letters to the thirty-two (32) surface owners in the application lands advising
them of Rosewood’s application. No protests were received from the surface
owners. The surface use of the application lands is irrigated farmland.
7. Testimony and exhibits presented at the administrative hearing indicated that
gas production is better in areas of structural highs within the application
lands and that the Niobrara Formation is a very porous, low permeability blanket
chalk in the application area with some local faulting present. The average
thickness of the Niobrara Formation in the application lands is approximately
thirty (30) to fifty (50) feet.
8. Testimony and exhibits presented at the administrative hearing indicated that
the average cumulative gas production from the Niobrara Formation is 88 MMCF per
well with an Estimated Ultimate Recovery of 140 MMCF per well, that the Niobrara
Formation is subnormally pressured in this area, and that the initial gas in
place for the application area has been calculated at 1.362 BCF, with only 10%
of the gas in place recoverable. Testimony indicated that in order to prevent
waste and protect correlative rights optional second wells should be allowed
within the established drilling units to ensure efficient and economic
incremental gas recovery from the Niobrara Formation in the application lands.
Further testimony indicated that production from an additional well in the
spacing unit would result in an economic well.
9. At the time of the administrative hearing, Rosewood Resources, Inc. agreed to
be bound by oral order of the Commission. Rosewood Resources, Inc. further
agreed that compliance with Commission rules is sufficient to protect the
environment, public health and welfare without any additional plan proposed by
the applicant.
10. 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 allowing an optional second well to be
drilled on each 160-acre drilling and spacing unit for the lands described in
Finding 4.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Order No. 317-3 is hereby amended to allow
an optional second well to be drilled and completed for the production of gas
and associated hydrocarbons from the Niobrara Formation, on the 160-acre
drilling and spacing units described below, at the option of the operator.
Township 3 North, Range 47 West, 6th P.M.
Sections 3-5: All
Sections 8-10: All
Section 15: All
Section 17: All
Sections 20-22: All
IT IS FURTHER ORDERED, that for any 160-acre drilling and spacing unit which
does not currently have a well, the initial well shall also be located no closer
than 560 feet from the outer boundaries of the 160-acre drilling and spacing
unit.
IT IS FURTHER ORDERED, that compliance by Rosewood Resources, Inc. with
Commission rules shall be sufficient to protect the environment, public health,
safety and welfare without the need for an additional plan.
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 7th day of November, 2001, as of October 29, 2001.
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 November 7, 2001
(317-6)