DENVER ASSOCIATION OF PETROLEUM LANDMEN LAND PRESENTATIONS BEFORE OIL

1
DENVER ASSOCIATION OF PETROLEUM LANDMEN LAND
PRESENTATIONS BEFORE OIL GAS CONSERVATION
COMMISSIONS February 15, 2006
Presented by Michael J. Wozniak 216 St., Suite
1100 Denver, CO 80202 [phone]
BEATTY WOZNIAK, P.C.
2
I. Introduction

• Oil Gas Commissions are busier and busier
• 2005 - Wyoming Permits 9,617 APDs approved
• - Colorado Permits 4,363 APDs
  approved
• 208 recompletion permits approved
• - Colorado Dockets 60 actual hearings
• 258 violations (NAOVs, AOCs, OFVs)
• - Wyoming Dockets 748 dockets filed
• Land testimony required in virtually every case
• Focus on Colorado and Wyoming

3
II. Types of Typical Hearings

• A - Exception Locations
• 1) Rule 318c. (COGCC Rules Regulations)
• 2) Chapter 3, Section 3 (WOGCC Rules
  Regulations)
• B - Establish Drilling and Spacing Units
• Not smaller than area that can be efficiently
  (and economically in Colorado) drained by one
  well - 34-60-116 C.R.S. 30-5-109(b) W.S.A.
• C - Add lands to Existing Spacing Units
• D - Increase Well Density in Existing Spacing
• E - Modify Existing Spacing Units
• F - Exploratory Drilling Units
• 34-60-116(2), C.R.S.

4

• G - Secondary Recovery/Waterflood Units/State
  Unitization
• 1) 35-10-110 et seq. W.S.A. and Chapter 4,
  Section 7
• (WOGCC Rules Regulations)
• 2) 34-60-118 C.R.S.
• H - Commingling Application
• 1) Chapter 3, Section 35 (WOGCC Rules
  Regulations)
• 2) Rule 322 (COGCC Rules Regulations)
• I - Horizontal Wells
• 1) Chapter 3, Section 2(v), Chapter 3, Section
  25 (WOGCC Rules Regulations)
• 2) Rule 321 (COGCC Rules Regulations)
• J - Compulsory Pooling/Force Pooling
• 1) 34-60-116(7)(a) C.R.S. Rule 530 (COGCC
  Rules
• Regulations)
• 2) 30-5-109(f)(g) W.S.A.

5

• K - Others
• 1) Well setbacks/variances
• - Rule 603 setbacks high density
  applications Rule 502b variances (COGCC
  Rules Regulations)
• - Chapter 3, Section 2 (WOGCC Rules
  Regulations)
• 2) Bond determinations
• 3) Correlative rights violations
• 4) Disposal well permits
• - Rule 325 (COGCC Rules Regulations)
• - Chapter 4, Section 5 (WOGCC Rules
  Regulations)
• 5) Payment of proceeds disputes - 34-60-118.5
  C.R.S.
• 6) Gas storage
• - 34-60-106(17)(a) (i)
• 7) Local Public forums Rule 508 (COGCC Rules
  Regulations)
• 8) Violation hearings
• - 34-60-121 C.R.S.
• - 30-5-119 W.S.A.

6

• L - Rulemaking
• Rule 529 (COGCC Rules Regulations)
• M - Each type of Application is based on
  statutory authority and Rule and Regulation
  provisions
• 1) See generally, 34-60-101 et seq. C.R.S.
  30-5- 101
• et seq. W.S.A.
• 2) Check Commission websites
• 3) Must prevent waste protect correlative
  rights

7
III. Land Testimony

• A - Overview
• 1) Qualifications/resume
• - Required in Colorado
• 2) Describe Application Summarize request of
  Company
• 3) Describe existing spacing
• 4) Describe existing Orders affecting
  application area
• 5) Confirm meet definition of Owner
• 6) Confirm proper notice given
• 7) Confirm protest/inquiry situation
• 8) Power Point new tools
• B - Present Land Exhibits
• 1) Vary with nature of Application
• 2) Title Block Applicant name, scale,
  exhibit number, case docket, type, county,
  field not stamped as opposed to
  geology/engineering exhibits

8

• Examples
• A - Regional Map state lines, cities,
  highways, rivers, etc.
• B - Location Map
• 1. Affected lands/proposed location
• 2. Drilling Window(s)
• 3. Dimensions of well location outside the
  window (if exception location)
• 4. Distance between proposed well and other
  wells
• 5. Producing formations identified
• 6. Cross-sections delineated
• 7. Seismic shot lines/seismic data delineated
• 8. Outline of spaced area(s) and field name
  and proposed spacing units

9

• C - Application Land Map(s)
• 1. Mineral ownership
• 2. Leasehold ownership
• 3. Surface ownership
• 4. Outline affected lands
• 5. Proposed location(s) with distances to
  lease lines
• 6. Drilling window(s)
• 7. Distance of proposed location from
  offsetting spacing units
• 8. Outline of spaced area(s) and field name
• D - Topographic Map
• 1. Affected lands/proposed location
• 2. Drilling window
• 3. Access road(s)
• 4. Man-made features
• E - Health, Safety, Welfare Environment
  Exhibits
• -- Colorado only -- 34-60-102 C.R.S.

10
IV. Testifying

• A - Consider written testimony as exhibit
• B - Examiner/administrative hearings vs. full
  Commission hearings
• C - Oral testimony - under oath
• 1) Dont read
• 2) Stay within yourself
• 3) Confidence
• 4) Know your audience
• 5) Address weak points
• 6) Importance of preparation
• - Cross examination tips
• 7) Commissioner questions
• 8) Defer to geologist/engineer
• 9) Know applicable regulations/statutes
• 10) Make record for appeal

11
V. Conclusion

• A - Land testimony required to establish elements
  of proof
• B - Land testimony rarely wins the hearing
  but can easily lose it