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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 IGNACIO-BLANCO FIELD, ARCHULETA COUNTY, COLORADO |
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CAUSE NO. 112
ORDER NO. 112-186 |
This cause came on for hearing before the Commission at 9:00 a.m. on February 13, 2006, Suite 801, in The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to allow an exception to the permitted location in Order No. 112-157, for a horizontal producing leg and bottomhole location in the NE¼ of Section 5, Township 32 North, Range 5 West, N.M.P.M., to be located no closer than 660 feet from the outer boundaries of the E½ drilling and spacing unit for production from the Fruitland coal seams for the Dungan 32 #5-3 Well, with a surface location in the NE¼ NW¼ of Section 5, Township 32 North, Range 5 West, N.M.P.M.
The Commission finds as follows:
1. Energen Resources Corporation (“Energen”), 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 July 11, 1988, the Commission issued Order No. 112-60, which established 320-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Fruitland coal seams underlying certain lands, including Section 5, Township 32 North, Range 5 West, N.M.P.M., with the permitted well to be located in the center of the NW¼ and the SE¼ of the section and no closer than 990 feet from the boundaries of the quarter section upon which it is located, nor closer than 130 feet to any interior quarter section line.
5. On May 15, 2000, the Commission issued Order No. 112-157, which allowed an optional additional well to be drilled for production of gas from the Fruitland coal seams for certain lands, including Section 5, Township 32 North, Range 5 West, N.M.P.M., with the permitted well when north of the north line of Township 32 North to be located in the NW¼ and the SE¼ of each section and when south of the north line of Township 32 North to be located in the NE¼ and SW¼ of each section, no closer than 990 feet from the boundaries of the quarter section, nor closer than 130 feet to any interior quarter section line.
6. On December 28, 2005, Energen, by its attorney, filed with the Commission a verified application for an order to allow an exception to the permitted location in Order No. 112-157, for a horizontal producing leg and bottomhole location in the NE¼ of Section 5, Township 32 North, Range 5 West, N.M.P.M., to be located no closer than 660 feet from the outer boundaries of the E½ drilling and spacing unit for production from the Fruitland coal seams for the Dungan 32 #5-3 Well. Said well will be drilled at a surface location in the NW¼ located 1030 feet FNL and 1670 feet FWL in said Section 5 on a common pad with the existing Dungan 32-5 #5-2 Well.
7. Testimony and exhibits presented at the administrative hearing showed that the Dungan 32-5 #5-3 Well has a proposed bottomhole location 1200 feet FNL and 760 feet FEL in said Section 5.
8. Testimony and exhibits presented at the administrative hearing showed the proposed wellbore path through the Fruitland coal seams for the well, proposed to encounter the Fruitland coal seams at a point 1030 feet FNL and 660 feet FWL in the E½ of the 320-acre drilling and spacing unit in said Section 5.
9. Testimony and exhibits presented at the administrative hearing showed that in the application area, Fruitland coal seams have projected gas reserves of 5.05 BCF per 160 acres. Additional testimony indicated that the projected recovery factor is 28.5% per 160 acres for a well drilled laterally through the Fruitland coal seams, versus a recovery factor between 15% and 20% for a vertical wellbore through the Fruitland coal seams.
10. Testimony and exhibits presented at the administrative hearing showed that there would be no violation of correlative rights from drilling and producing the horizontal well.
11. Testimony and exhibits presented at the administrative hearing showed that access to the surface of the E½ of Section 5, Township 32 North, Range 5 West, N.M.P.M., is limited by the water of Navajo Reservoir.
12. No protests to the application have been filed with the Commission or the Applicant.
13. Energen Resources Corporation agreed to be bound by oral order of the Commission.
14. 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 to allow an exception to the permitted location in Order No. 112-157, for a horizontal producing leg and bottomhole location in the NE¼ of Section 5, Township 32 North, Range 5 West, N.M.P.M., to be located no closer than 660 feet from the outer boundaries of the E½ drilling and spacing unit for production from the Fruitland coal seams for the Dungan 32-#5-3 Well, with a surface location in the NE¼ NW¼ of Section 5, Township 32 North, Range 5 West, N.M.P.M.
NOW, THEREFORE, IT IS ORDERED, that an exception to the permitted location in Order No. 112-157 is hereby approved, for a horizontal producing leg and bottomhole location in the NE¼ of Section 5, Township 32 North, Range 5 West, N.M.P.M., to be located no closer than 660 feet from the outer boundaries of the E½ drilling and spacing unit for production from the Fruitland coal seams for the Dungan 32-#5-3 Well, with a surface location in the NE¼ NW¼ of Section 5, Township 32 North, Range 5 West, N.M.P.M.
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.
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