BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER Of THE PROMULGATION )
AND ESTABLISHMENT OF FIELD RULES TO ) CAUSE NO. 407
GOVERN OPERATIONS IN THE CODELL )
FORMATION IN ADAMS, BOULDER, ) ORDER NO. 407-1
JEFFERSON, LARIMER AND WELD )
COUNTIES, COLORADO ) AMENDED
This cause came on for hearing before the Commission on November 21, 1983 at 10:30 a.m. and November 22, 1983, in the Old Supreme Court Chambers, 2nd Floor, State Capitol Building and continued to December 19, 1983 in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required, upon the Commission's own motion to determine the proper drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation underlying certain lands in Adams, Boulder, Jefferson, Larimer and Weld Counties, Colorado.
FINDINGS
The Commission finds as follows:
1. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.
2. 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.
3. The areas as described in Order No. 403-1, Johnstown Field and Order No. 381-1, Bracewell Field, which have previously been spaced for production from the Codell Formation and all of Sections 19, 20, 21, 22, 27, 28, 29 and 30, Township 6 North, Range 65 West, Greeley Field, Weld County should be deleted from the area.
4. Evidence presented at the hearing demonstrates that the Codell Formation constitutes a common source of supply of oil and/or gas and associated hydrocarbons underlying the following described lands in Adams, Boulder, Jefferson, Larimer and Weld Counties, Colorado, to-wit:
Township 1 North, Ranges 64 thru 70 West (inclusive), 6th P.M.
All
Township 2 North, Ranges 64 thru 69 West (inclusive), 6th P.M.
All
Township 2 North, Range 70 West, 6th P.M.
Sections 1 thru 5, 8 thru 36
Township 3 North, Ranges 64 thru 69 West (inclusive), 6th P.M.
All
Township 3 North, Range 70 West, 6th P.M.
Sections 1, 12, 13, 21 thru 28, 33 thru 36
Township 4 North, Ranges 64 thru 69 West (inclusive), 6th P.M.
All except SW¼ Section 9, T. 4 N., R. 67 W.
Township 5 North, Ranges 64 thru 68 West (inclusive), 6th P.M.
All except N½ Sections 1 and 2, T. 5 N., R. 66 W.
Township 5 North, Range 69 West, 6th P.M.
Sections 1 thru 4, 9 thru 16, 20 thru 29, 31 thru 36
Township 6 North, Range 64 West, 6th P.M.
All
Township 6 North, Range 65 West, 6th P.M.
Sections 1 thru 18, 23 thru 26, 31 thru 36
Township 6 North, Range 66 West, 6th P.M.
Sections 1 thru 14
Section 19: W½
Section 24: N½
Sections 30 and 31
Township 6 North, Ranges 67 thru 68 West (inclusive), 6th P.M.
All
Township 6 North, Range 69 West, 6th P.M.
Sections 1 thru 4, 9 thru 16, 21 thru 28, 33 thru 36
Township 1 South, Ranges 64 thru 70 West (inclusive), 6th P.M.
All
Township 2 South, Ranges 69 and 70 West (inclusive), 6th P.M.
All
5. Geological and engineering evidence presented at the hearing indicates that the Codell Formation appears to be a contiguous reservoir covering a large areal extent. The formation consists of fine grained, highly clay-filled, tight sands. However, there are stratigraphic barriers, some faulting and geological differences of a localized nature throughout the area that would be more clearly defined as drilling proceeds. Reservoir characteristics are not fully known and vary throughout the area. It appears that the reservoir is predominately oil bearing in the western portion and changes to condensate/gas toward the east. Fracing is necessary for production and the results may vary from area to area. The reservoir is not considered to be rate-sensitive.
6. Evidence presented at the hearing indicates that a general spacing pattern of 80-acre drilling and spacing units would be reasonable and in accordance with the provisions of the statute. However, due to the localized variations of the formation, it may be appropriate at the discretion of the operator to drill on a closer spacing than 80-acres, therefore, flexibility should be provided in the order to allow the operator to drill an additional well on the undrilled 40-acre tract in the 80-acre unit.
7. In order to prevent waste and the unnecessary flaring of gas, no gas should be allowed to be flared from wells with a producing gas-oil ratio of 500-1 or more, and wells with a producing gas-oil ratio less than 500-1 should be restricted to no more than 25 MCF/day. In order to avoid premature abandonment of wells, exceptions should be granted to wells not capable of producing no more than 10 barrels of oil per day or 60 MCF of gas per day.
8. In order to prevent waste of oil and gas as defined by law; to protect correlative rights of all parties concerned; to prevent the drilling of unnecessary wells and to insure proper and efficient development and promote conservation of the oil and gas resources of the State, an order should be issued establishing 80-acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation, common source of supply underlying the lands described herein. The units should consist of 80-acres, more or less, and consist of the E½ and W½ or the N½ and S½ of a quarter section according to the governmental survey, the unit to be designated by the operator upon drilling the first well in the quarter section. The permitted well should be located in the center of either 40-acre tract within the unit, with a tolerance of 200 feet in any direction. Exceptions may be granted by the Director, provided owners of the contiguous and cornering units file a waiver or consent in writing, agreeing to said exception. Existing wells producing from the Codell Formation and locations should be considered the permitted wells for the units upon which they are located.
ORDER
NOW, THEREFORE, IT IS ORDERED, that the following rules and regulations shall apply hereafter to a well drilled, completed, or recompleted in the Codell Formation underlying the lands herein described, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith:
Rule 1. Eighty (80) acre drilling and spacing units shall be and the same are hereby established for the production of oil and/or gas and associated hydrocarbons from the Codell Formation underlying the following described lands in Adams, Boulder, Jefferson, Larimer and Weld Counties, Colorado, to-wit:
Township 1 North, Ranges 64 thru 70 West (inclusive), 6th P.M.
All
Township 2 North, Ranges 64 thru 69 West (inclusive), 6th P.M.
All
Township 2 North, Range 70 West, 6th P.M.
Sections 1 thru 5, 8 thru 36
Township 3 North, Ranges 64 thru 69 West (inclusive), 6th P.M.
All
Township 3 North, Range 70 West, 6th P.M.
Sections 1, 12, 13, 21 thru 28, 33 thru 36
Township 4 North, Ranges 64 thru 69 West (inclusive), 6th P.M.
All except SW¼ Section 9, T. 4 N., R. 67 W.
Township 5 North, Ranges 64 thru 68 West (inclusive), 6th P.M.
All except N½ Sections 1 and 2, T. 5 N., R. 66 W.
Township 5 North, Range 69 West, 6th P.M.
Sections 1 thru 4, 9 thru 16, 20 thru 29, 31 thru 36
Township 6 North, Range 64 West, 6th P.M.
All
Township 6 North, Range 65 West, 6th P.M.
Sections 1 thru 18, 23 thru 26, 31 thru 36
Township 6 North, Range 66 West, 6th P.M.
Sections 1 thru 14
Section 19: W½
Section 24: N½
Sections 30 and 31
Township 6 North, Ranges 67 thru 68 West (inclusive), 6th P.M.
All
Township 6 North, Range 69 West, 6th P.M.
Sections 1 thru 4, 9 thru 16, 21 thru 28, 33 thru 36
Township 1 South, Ranges 64 thru 70 West (inclusive), 6th P.M.
All
Township 2 South, Ranges 69 and 70 West (inclusive), 6th P.M.
All
Rule 2. Said drilling units shall consist of 80-acres, more or less, and consist of the E½ and W½ or the N½ and S½ of a quarter section according to the governmental survey, the unit to be designated by the operator upon drilling the first well in the quarter section. Should a unit not be designated by the operator of the first drilled in the quarter section, the Director shall designate a drilling unit for said well and so advise the operator. If within 30 days the operator objects to said designation, he shall advise the Director and the matter shall be set for hearing before the Commission.
The permitted well shall be located in the center of either 40-acre tract within the unit, with a tolerance of 200 feet in any direction. The operator shall have the option to drill an additional well on the undrilled 40-acre tract in each 80-acre drilling and spacing unit. Exceptions may be granted by the Director, provided owners of the contiguous and cornering units file a waiver or consent in writing, agreeing to said exception. Existing wells producing from the Codell Formation and locations shall be considered the permitted wells for the units upon which they are located.
Rule 3. No gas shall be flared from wells having a producing gas-oil ratio of 500 to 1 or more. Wells with a producing gas-oil ratio less than 500 to 1 shall be restricted in production to no more than 25 MCF/day. Exceptions to this rule shall be granted to wells not capable of producing more than 10 barrels of oil per day and 60 MCF of gas per day.
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 20th day of December 1983, as of December 19, 1983.
AMENDED this _______ day of March, 2000, in accordance with Order No. 407-17, entered November 18, 1985.
THE 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
March 29, 2000