new mexico energy, minerals and natural...
TRANSCRIPT
NEW MEXICO ENERGY, MINERALS and NATURAL RESOURCES DEPARTMENT
Joanna Prukop Cabinet Secretary
Bill Richardson Governor
April 30,2003
Lori Wrotenbery Director
Oil Conservation Division
Chi Energy, Inc. c/o James Bruce P.O. Box 1056 Santa Fe, New Mexico 87501
Re: Administrative application filed with the Division on April 29, 2003 on behalf of Chi Energy, Inc (administrative application reference No. pKRV0-311952296) for an exception to Division Rule 104.C (2) (a) for its proposed Stephens "A" Com. Well No. 2 to be drilled as an infill Morrow gas well at an unorthodox location 500feet from the South line and 1065feet from the East line (Unit P) of Section 7, Township 23 South, Range 2 7 East, NMPM, Eddy County, New Mexico.
Dear Mr. Bruce:
The subject application cannot be authorized administratively and is hereby denied and being returned to you at this time. It is the Division's long-standing policy not to allow more then one operator within a single producing spacing unit. When the Division amended Division Rule 104 in 1999 to allow infill drilling of deep gas in southeast New Mexico, this was set fourth in a rule, please refer to Division Rule 104.C (2) (c). The Division's records show that the existing 317.68-acre standard lay-down gas spacing 4init in the South Carlsbad-Morrow Gas Pool comprising the S/2 equivalent of Section 7 and its dedicated well, the Stephens "A" Com. Well No. 1 (API No. 30-015-20716), located at a standard gas well location 810 feet from the south line and 1980 feet from the West line (Unit N) of Section 7, are currently operated by Merit Energy Company of Dallas, Texas.
Should you wish to pursue this matter it will be necessary to docket a hearing.
Sincerely
Michael E. Stogner Chief Hearing Officer/Engineer
cc: New Mexico Oil Conservation Division - Artesia Kathy Valdes, NMOCD - Santa Fe
Oil Conservation Division * 1220 South St. Francis Drive * Santa Fe, New Mexico 87505 Phone: (505) 47t'-3440 * Fax (505) 476-3462 * http://www.emnrri state nm ns
mloa ENGWEER ^tsfSSL, LOGGEDW jK/V TYPE /JSl
ABOVE THIS UNE FOR DMSDN USE ONLY
NEW MEXICO OIL CONSERVATION DIVISION - Engineering Bureau -
1220 South St. Francis Drive, Santa Fe, NM 87505 APR 2 9 2003
il Conservation Division ADMINISTRATIVE APPLICATION CHECKLIST
THIS CHECKLIST IS MANDATORY FOR ALL ADMINISTRATIVE APPLICATIONS FOR EXCEPTIONS TO DIVISION RULES AND REGULATIONS WHICH REQUIRE PROCESSING AT THE DIVISION LEVEL IN SANTA FE
Application Acronyms: [NSL-Non-Standard Location! [NSP-Non-Standard Proration Unit] [SD-Simultaneous Dedication]
[DHC-Downhole Commingling] [CTB-Lease Commingling] [PLC-Pool/Lease Commingling] [PC-Pool Commingling] [OLS - Off-Lease Storage] [OLM-Off-Lease Measurement]
[WFX-Waterflood Expansion] [PMX-Pressure Maintenance Expansion] [SWD-Salt Water Disposal] [IPI-lnjection Pressure Increase]
[EOR-Qualified Enhanced Oil Recovery Certification] [PPR-Positive Production Response]
[1] TYPE OF APPLICATION - Check Those Which Apply for [A] [A] location - Spacing Unit - Simultaneous Dedication
ffl NSL • NSP • SD
Check One Only for [B] or [C] [B] Commingling - Storage - Measurement
• DHC • CTB • PLC • PC • OLS • OLM
[C] Injection - Disposal - Pressure Increase - Enhanced Oil Recovery • WFX • PMX • SWD • IPI • EOR • PPR
[D] Other: Specify
[2] NOTIFICATION REQUIRED TO: - Check Those Which Apply, or Does Not Apply
[A] CH Working, Royalty or Overriding Royalty Interest Owners
[B] Offset Operators, Leaseholders or Surface Owner
[C] • Application is One Which Requires Published Legal Notice
[D] d l Notification and/or Concurrent Approval by BLM or SLO U.S. Bureau of Land Management - Commissioner of Public Lands, State Land Office
IE] C3 For all ofthe above, Proof of Notification or Publication is Attached, and/or,
[F] ffi Waivers are Attached
[3] SUBMIT ACCURATE AND COMPLETE INFORMATION REQUIRED TO PROCESS THE TYPE OF APPLICATION INDICATED ABOVE.
[4] CERTIFICATION: I hereby certify that the information submitted with tins application for administrative approval is accurate and complete to the best of my knowledge. I also understand that no action will be taken on this application until the required mformation and notifications are submitted to the Division.
~7T^ A* / > completed byfe-rt individual with managerial and/or supervisory capacity. / / / / Note: Statement rjnis
James Bruce
Print or Type Name
Attorney for Applicant
Title
e-mail Address
Date
JAMES BRUCE ATTORNEY AT LAW
POST OFFICE BOX 1056 SANTA FE, NEW MEXICO 87504
369 MONTEZUMA, NO. 213 SANTA FE, NEW MEXICO 87 501
(505) 982-2043 (PHONE) (505) 982-2151 (FAX)
j aiaesbruc@aol. com
APR 2 9 2003 A p r i l 29 , 2003
Oil Conservation Division Hand Delivered
Michael E. Stogner O i l Conservation D i v i s i o n 1220 South St. Francis Drive Santa Fe, New Mexico 87505
Dear Mr. Stogner:
Pursuant t o D i v i s i o n Rule 104.F.(2), Chi Energy, Inc. a p p l i e s f o r a d m i n i s t r a t i v e approval of an unorthodox gas w e l l l o c a t i o n f o r the f o l l o w i n g w e l l :
Well: Stephens A Com. Well No. 2 Location: 500 f e e t FSL & 1065 f e e t FEL Well U n i t : Lots 3, 4, EHSWH, and SEK (SH) of Section 7,
Township 23 South, Range 27 East, NMPM, Eddy County, New Mexico
A Form C-102 f o r the w e l l i s attached as E x h i b i t A. The w e l l w i l l be d r i l l e d t o t e s t the Morrow formation (South Carlsbad-Morrow Gas Pool) . Well spacing i s 320 acres, w i t h w e l l s t o be located no clos e r than 660 f e e t t o a quar t e r s e c t i o n l i n e nor c l o s e r than 10 fee t t o a q u a r t e r - q u a r t e r s e c t i o n l i n e .
The SH u n i t w i l l be simultaneously dedicated t o the proposed w e l l and t o the e x i s t i n g Stephens A Com. Well No. 1, lo c a t e d i n the SEKSWK of Section 7 (810 f e e t FSL & 1980 f e e t FWL) , forming a standard 317.68 acre w e l l u n i t .
The l o c a t i o n i s based on topographic and geologic reasons. Applicant planned t o d r i l l the w e l l 660 f e e t from the south l i n e of Section 7. However, attached as E x h i b i t B i s an a e r i a l photo which shows t h a t the SE% of Section 7 i s a r e s i d e n t i a l area, which severely l i m i t s w e l l l o c a t i o n s . The proposed l o c a t i o n i s the l e a s t unorthodox l o c a t i o n a v a i l a b l e i n the SE%.
Attached as E x h i b i t C i s an isopach of the Middle Morrow D Sand, which i s the primary Morrow zone. Moving the w e l l s l i g h t l y south, r a t h e r than n o r t h , keeps the w e l l i n the t h i c k e r p a r t of the sand. Due t o the e x i s t i n g No. 1 w e l l i n the SWA of Section 7, i t cannot be moved t o t h a t q u a r t e r s e c t i o n .
A land p l a t i s attached as E x h i b i t D. The NH of Section 18 i s operated by Mewbourne O i l Company, and Section 17 i s operated by Marbob Energy Corporation. Both o f f s e t operators have waived o b j e c t i o n , as shown i n E x h i b i t E.
Please contact me i f you need any f u r t h e r i n f o r m a t i o n .
ver-3j t r u l y yours,
James BruT?e
Attorney f o r Chi Energy, Inc.
-2-
APR-10-E003 09:38fl FROM: T0:1915687266e P: l ' l
1625 N. FWK* Br HoWfc NM HFKMO
Biytiid in
1000 Rio Broros Rd* Artec NM 67410
matrlat IV 3040 South Pochscov 5anlo f«, NM c 7 $ »
State of Now Mexico Energy, Minerals & Natural Resources
OIL CONSERVATION DIVISION 2040 South Pacheco
Santo l-e, N M 87505
Form C - I OZ
Revijxsci Mar«h 17, IS9S
Submit tc Appropriate District Office
State Lease •• 4 Copiea
Fc« Leoee - 3 Ccpie*
• AMENDED REPORT
WELL LOCATION AND ACREAGE DEDICATION PLAT API N u m M r Pool Namo
I ' rapmy coo« Property Nomt
STEVENS A COM Well Number
2 "OGRID N o ! " - " Operation Name
CHT OPERATING, INC. O v a t i o n
3210
Surface Location UL or Lot No. Section Township Range Lai Wn. Feat f«Ktl tiw North/South un» FASt/VVMt nnd County
P 7 23-S 27-E St»0 SOUTH 1065 EAST EDDY
Bottom Hole Location If Different From Surface UL or Lot No. Section Township Range LD< kia | - Fwt from th* Worth/South Ifn* r & t fren the Eoirt/West line Coun(y
Dedicated Acres Joint or Infill ConsoPtkition axte Order Nn.
N O ALLOWABLE: WILL B E ASSIGNED TO T H I S C O M P L E T I O N UNTIL ALL. INTFRFST HAVE B E E N
CONSOLIDATED OR A N O N - S T A N D A R D U N I T HAS B E E N A P P R O V E D BY T H E DIVISION
No. x 1 w e l l
OPERATOR CERTIFICATION i Me&Jtsr cBHttrr THAT mr tunvoatioi. BBR£1» 13 TRUE AHD dOfVIBCT To TEE
BEST or irr KHOWLBOCS nm nxtar.
BY c & t f t f r THAT no? WSLL uaimn Has r u r *AS rioTTsa taou
F7BLD WOWS Of JCTUIL SUBKBTS lunz Br MS OH UNIHH ur sOPFXvmroir, *xn THAT nte BAUU JS mm AUtO CORRECT TO TUT
BSBT or m mmjsDPB M/D BBUBP,
APRIL 2003 Dat* or Sun
I Proposed Location
^ ) Morrow Producer
Chi Energy Acreage
Chi Energy, Inc. South Carlsbad Area
Isopach - Gross Sand Middle Morrow "D" Sand
C I : 1 0 '
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915 685-5001 FAX 915 687-2662
CHI ENERGY, INC. P.O. BOX 1799
MIDLAND, TEXAS 79702
March 27, 2003
Steve Cobb Mewbourne Oil Company 500 W. Texas, Suite 1020 Midland, Texas 79701
Re: Unorthodox Location Stephens A-2 1065' FEL & 500' FSL Section 7-T-23S-R-27E S/2 Proration Unit Eddy County, New Mexico
Mr. Cobb:
Chi Operating, Inc. proposes to drill the Stephens A-2 at the above referenced unorthodox location. Our choice of location is due to surface occupancy and buildings and homes in the area. Mewbourne Oil Company is the Lessee of Record in the W/2 of Section 8-T-23S-R-27E and the N/2 of Section 18-T-23S-R-27E which is contiguous to our lease in the S/2 of Section 7-T-23S-R-27E. Therefor, Chi Operating Inc. respectfully requests that Mewbourne Oil Company waive any objection to the Drilling, Testing, Completing and Producing ofthe Stephens A-2 located at 1065' FEL & 500' FSL of Section 7-T-23S-R-27E, Eddy County, New Mexico.
Please indicate your desire to not object to the above Unorthodox Location by signing in the space provided below and returning to me at the above address. Mewbourne will have access to all engineering and geological data obtained from the drilling and testing of the Stephens A-2 well.
Thanks and please call and talk to myself or Bill Bergman should you have any questions.
• \ 915 685-5001 t
FAX 915 687-2662
CHI ENERGY, INC. P.O. BOX 1799
MIDLAND, TEXAS 79702
March 27, 2003 MAR 312003
Raye Miller Marbob Energy Corporation Box 227 Artesia, New Mexico 88211
Re: Unorthodox Location Stephens A-2 1065'FEL & 500'FSL Section 7-T-23S-R-27E S/2 Proration Unit Eddy County, NewMexico
Mr. Miller:
Chi Operating, Inc. proposes to drill the Stephens A-2 at the above referenced unorthodox location. Our choice of location is due to surface occupancy and buildings and homes in the area. Marbob Energy Corporation is the Lessee of Record in Section 17-T-23S-R-27E which is contiguous to our lease in the S/2 of Section 7-T-23S-R-27E. Therefor, Chi Operating Inc. respectfully requests that Marbob Energy Corporation waive any objection to the Drilling, Testing, Completing and Producing of the Stephens A-2 located at 1065' FEL & 500' FSL of Section 7-T-23S-R-27E, Eddy County, New
Please indicate your desire to not object to the above Unorthodox Location by signing in the space provided below and returning to me at the above address. Marbob will have access to all engineering and geological data obtained from the drilling and testing of the Stephens A-2 well.
Thanks and please call and talk to myself or Bill Bergman should you have any questions.
Sincerely, Marbob Energy Corporation
Mexico.
Name: Rave M i l l e r
Title: Attorney-in-Fact