BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOM A ORDER DENYING APPLICATIO N
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1 BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOM A APPLICANT : RELIEF SOUGHT : EXCEPTION TO RULE N0.165: LAND COVERED: SECTION 29, TOWNSHIP 27 NORTH, RANGE 24 WEST, HARPER COUNTY, OKLAHOMA. ORDER DENYING APPLICATIO N CAUSE CD NO ORDER NO Hearing and Place : This cause came on for hearing before Michael Norris, Administrative Law Judge ( "ALJ " for the Oklahoma Corporation Commission, at 9 : 00 a. m. on the 18th day of Februa ry, 2009 and the 4th day of March, 2009, in the Commission 's Courtroom, Jim Thorpe Building, Oklahoma City, Oklahoma, pursuant to notice given as required by law and the rules of the Commission for purpose of taking testimony and reporting to the Commission. 2. Appearances : Charles Davis, Attorney, appeared on behalf of Appl icant, Sundown Energy, LP ("Sundown " ; Charles Helm, Attorney, appeared on behalf of IBEX Resources (" IBEX " ; Richard Grimes, Attorney, appeared for Apache Corporation ("Apache "; Keith Berry, landman, appeared for Legacy Resources ( " Legacy "; and Sally Shipley, Deputy General Counsel for the Conservation Division, filed notice of appearance for the Oklahoma Corporation Commission. The Administrative Law Judge ("ALJ" filed his Report of the Administrative Law Judge on the 12th day of March, 2009, to which an Appeal was timely filed and proper notice given of the setting of the Appeal. The oral arguments on appeal were referred to Randolph S. Specht, Oil and Gas Appellate Referee on the 20th day of April, The Referee issued his repo rt on the 1 st day of June, 2009, recommending that the Administrative Law Judge be affirmed. The Commission en banc deliberated the cause on the 9th day of July, 2009, and voted -0 to affirm the recommendation of the Referee. In support of such determination the Commission finds as follows : FI NDIN GS 1. This is an Application for Exception to the terms of Rule 165 : as regards a well proposed to be drilled to the unspaced Cherokee common source of supply in the NW/4 of Section 29, Township 27 North, Range 24 West, Harper County, Oklahoma. 2. Notice has been given as required by law and by the rules of the Commission. The Commission has jurisdiction of the subject ma tter and the pa rties.. The Applicant currently operates the Rose Hill No. 1 well in the NW/4 of said Section 29. That well is completed in the Morrow common source of supply. 4. In July of 2008, Apache proposed the Rose Hill No Well for the unspaced Cherokee formation. The well was proposed at a location 1, 100 feet from the no rth line and 1,650 feet from the west line of the NW/4 of said Section 29. That location is 47 feet from the Rose Hill No Well. Apache owns a % working interest in the Rose Hill No Well and no working interest in the Rose Hill No Well. Sundown owns a 74% working interest and IBEX Resources (a related company to JMA owns a 17% working in the No well. Outside the wellbore of that well Sundown owns a 8. 75% working interest and IBEX owns a 2. 8 % work ing interest. Apache proposed the Rose Hill No well to both Sundown and IBEX in writing and specified its exact location. Both of those parties elected to participate in that well without objecting to its location. After Apache successfully drilled and completed the Rose Hill No Well in the unspaced Cherokee formation, Sundown filed an Application to re -complete the Rose Hill
2 SECTION 29-27N-24W, HARPER COUNTY, OKLAHOMA No Well into the Cherokee. However, its Form 1000 was rejected based on the location of the No Well. 5. OCC-OAC 165 : , under General Well Spacing Requirements provides in relevant pa rt : "Any well drilled for oil and gas to an unspaced common source of supply 2,500 feet or more in depth shall be located not less than 0 feet from any property line or lease line, and shall be located not less than 600 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply ;... " 6. As a result of such rule the Applicant filed this Application in order to recomplete the Rose Hill No Well in the Cherokee common source of supply. 7. The unrefuted evidence presented in this case shows that the Rose Hill No Well will efficiently recover the recoverable oil and gas from the Cherokee common source of supply in the NW/4 of Section 29. The result of the re-completion of the Rose Hill No Well would be recove ry of a po rtion of that same oil and gas. No additional resources would be produced. Based on that fact, this Application must be denied. 8. The Commission must balance between the conservation of oil and gas by preventing waste and the protection of correlative rights. The latter rights are secondary to waste and must yield to a reasonable exercise of Commission power to prevent such waste. There were no facts presented in this case to overcome such circumstance. ORDER WHEREFORE, IT IS ORDERED by the Commission that this Application seeking an exception to the provisions of Rule No. 165 : as regards the proposed recompletion of the Rose Hill No Well in the NW/4 of Section 29, Township 27 No rth, Range 24 West, Harper County, Oklahoma, into the Cherokee common source of supply is denied. UUivE HNU t'trcrurcmt U Inio UHr ur - ~~ ON OF OKLAHOM A OR ER OF THE CO ISSION : GG CHELL Secretary of the Commission 2
3 SECTION 29-27N-24W, HARPER COUNTY, OKLAHOMA APPROV AS TO CONTENT AND FORM : i~~z~f,~.'guii ~ ~ A EY FOR APACH E CHARLES DAVIS, ATTORNEY FOR APPLICAN T CHARLES HELM, ATTORNEY FOR IBE X The foregoing findings and order are the report and recommendations of the Michael Norris, Administrative Law Judge Technical Review
4 SECTION 29-27N- 24W, HARPER COUNTY, OKLAHOMA APPROVED AS TO CONTENT AND FORM : A R Y FO PA C RLE DAVIS, ATTORNE FOR APPLICAN T CHARLES HELM, ATTORNEY FOR IBE X The foregoing findings and order are the repo rt and recommendations of the Michael Norris, Administrative Law Judge Technical Review
5 SECTION 29-27N-24W, HARPER COUNTY, OKLAHOMA APPROVED AS TO CONTENT AND FORM : ATTORNEY FOR APACH E CHARLES DAVIS, ATTORNEY FOR APPLICANT ~ '--. CHARLES HELM, ATTORNEY FOR IBEX The foregoing findings and order are the report and recommendations of the M ichael Norris, Adm inistrat ive Law Judge Technical Review Dat e
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