Application for Hearing. Affected Interest

Similar documents
CAUSE NO: 407 DOCKET NO:

BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO APPLICATION

BEFORE THE OIL & GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO ) ) ) ) ) ) ) ) APPLICATION

BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO APPLICATION. Interests Affected

BEFORE THE OIL & GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO ) ) ) ) ) ) ) ) ) APPLICATION

BEFORE THE OIL & GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO ) ) ) ) ) ) ) APPLICATION

BEFORE THE OIL &GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

BEFORE THE OIL & GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO APPLICATION

BEFORE THE OIL & GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO ) ) ) ) ) ) ) ) APPLICATION

BEFORE THE OIL & GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO ) ) ) ) ) ) ) APPLICATION

Enclosed is an application for the payment of proceeds in the above described lands. The following documents are attached.

TOWN OF WINDSOR RESOLUTION NO

SITE LEASE. between. CITY OF WESTWOOD, KANSAS, as Site Lessor. and. SECURITY BANK OF KANSAS CITY, as Site Lessee

FIRST AMENDMENT TO OIL AND GAS LEASE THE STATE OF TEXAS KNOW ALL MEN BY THESE PRESENTS COUNTY OF TARRANT

AGREEMENT TO MORTGAGE LEASEHOLD ESTATE

Durable Power of Attorney and Indeminifcation Agreement for Power of Attorney

6. LIST THE CAUSE DOCKETED NUMBER (E.G. ZONING CASE NUMBER, PLAT NUMBER...)

THE SCHOOL BOARD OF BROWARD COUNTY, FLORIDA acting as the governing body of the School District of Broward County, Florida and U.S. BANK NATIONAL ASSO

DEED RESTRICTION AGREEMENT

Energy and Environment Symposium

PROCEDURE: CHANGE OF ACCESS ON RECORDED PLAT

PINELLAS COUNTY, FLORIDA FINAL SURFACE WATER RATE RESOLUTION

GROUND LESSOR ESTOPPEL CERTIFICATE. Re: Corporate Center Two Owner LLC, Lease (Parcel II Office Center Lease), International Plaza

TWENTY-FIVE PROVISIONS OF AN OIL AND GAS LEASE IN FIFTY MINUTES

HOLDING TANK AGREEMENT

ALBERTA SURFACE LEASE AGREEMENT

WASHINGTON STATE COUNTY AUDITOR/RECORDER'S INDEXING FORM

EXHIBIT A CONDITIONAL USE PERMIT. The following form has been formatted to meet the recording standards of the Wake County Register of Deeds Office.

DECLARATION OF COVENANT FOR INSPECTION AND MAINTENANCE OF PRIVATE STORMWATER FACILITIES. City of Mercer Island, a Washington municipal corporation

PROPERTY EXCHANGE AGREEMENT

AFTER RECORDATION, RETURN BY: [ ] MAIL [ ] PICKUP TO: ASSIGNMENT OF LEASE

THE MEADOWS AT RIVERBEND HOMEOWNERS ASSOCIATION, INC. RESOLUTION OF THE BOARD OF DIRECTORS This resolution is made on the date set forth below by the

PIPELINE RIGHT-OF-WAY EASEMENT

Lease Agreement WITNESSETH: Leasehold

SITE LEASE. For all or a portion of the following Site:

ROUTE SLIP-APPROVAL OF FINAL PLAT

COLLATERAL ASSIGNMENT OF LEASES AND RENTS

Statutory Pooling in Colorado: Overview and Practical Tips. DODOA July 18, 2016

STORMWATER BEST MANAGEMENT PRACTICES OPERATIONS AND MAINTENANCE AGREEMENT

MINERAL COUNTY SHERIFF S OFFICE

SPECIAL WARRANTY DEED. THIS DEED, made this day of, 2005, between

FILED: NEW YORK COUNTY CLERK 12/12/ /30/ :39 06:55 PM INDEX NO /2016 NYSCEF DOC. NO. 136 RECEIVED NYSCEF: 12/12/2016

EASEMENT AGREEMENT. WHEREAS, Ferguson is the 100% owner of the property described on Exhibit B attached hereto (the Williams Property );

ARKANSAS OIL AND GAS COMMISSION 301 NATURAL RESOURCES DRIVE SUITE 102 LITTLE ROCK, ARKANSAS ORDER NO August 06, 2010

DEPOSIT AGREEMENT GUARANTEEING SITE PLAN IMPROVEMENTS WITH CASH ESCROW

1 st Hearing: 2 nd Hearing: Publication Dates: Notices Mailed: Rezone, Special Exception and Variance APPLICANT INFORMATION PROPERTY INFORMATION

Jasper County Airport Authority Lease of Real Estate WITNESSETH:

SPECIAL ASSESSMENT AGREEMENT AND DECLARATION OF NOTICE OF SPECIAL ASSESSMENT

Negotiations. October 25, Eric R. King

PERPETUAL DRAINAGE EASEMENT

LOAN CURE RIGHTS AGREEMENT

Easement under Section 65 of The Water Security Agency Act

Plaintiff, Board of County Commissioners of Boulder County, Colorado, alleges as follows:

ARKANSAS OIL AND GAS COMMISSION 301 NATURAL RESOURCES DRIVE SUITE 102 LITTLE ROCK, ARKANSAS ORDER NO February 03, 2012

RECITALS. Page 1 of 9

THIS DECLARATION OF RESTRICTIVE COVENANTS is made this day of, 20, by ("Covenantor"). RECITALS

DEED RESTRICTION AGREEMENT FOR THE OCCUPANCY AND TRANSFER OF CHAMONIX VAIL RESIDENTIAL DWELLING UNITS

FEE SIMPLE OPTION AGREEMENT Ecosystem Enhancement Program SPO File Number

RECORD OF ORDINANCES

THIS AGREEMENT made the day of, 2

BOUNDARY LINE ADJUSTMENT PROCEDURE

DO NOT WRITE, TYPE OR STAMP ANYTHING ABOVE THIS LINE OR IN THE MARGINS. PRIVATE LAKE AGREEMENT

DECLARATION OF RESTRICTIVE COVENANTS (AGE RESTRICTED)

AGREEMENT RECITALS: Draft 3/26/2015

PLANNING DIRECTOR. Approved by the Planning Director on this day of, A.D. 20. day of, A.D. 20. Approved by the Fire Chief on this

REAL PROPERTY LEASE AGREEMENT. (LOCATION: Division Street, Lancaster, California 93535)

DECLARATION OF RESTRICTIVE COVENANTS (AFFORDABLE HOUSING)

DECLARATION OF COVENANT

INSTRUCTIONS TO SELL/ASSIGN YOUR BOAT SLIP

WHEREAS, the parties hereto have mutually agreed to the terms of this Lease as hereinafter set out.

DLA Piper LLP (US) 6225 Smith Avenue Baltimore, Maryland

ALBERTA REGULATION 480/81 Land Titles Act FORMS REGULATION

ARAPAHOE COUNTY WATER AND WASTEWATER AUTHORITY CONVEYANCE AND ACCEPTANCE OF UTILITY LINES AND FACILITIES (NAME OF DEVELOPMENT)

CITY OF BREMERTON MULTI-FAMILY HOUSING LIMITED PROPERTY TAX EXEMPTION AGREEMENT

CONSENT TO LEASEHOLD DEED OF TRUST AND MODIFICATION OF LEASE THIS CONSENT TO LEASEHOLD DEED OF TRUST AND MODIFICATION OF LEASE

Municipality of Anchorage PURCHASE AND SALE AGREEMENT FOR HLB Parcel C in Chugiak, Alaska

This certification comes after periodic inspections of the work site, while work was being done and a final inspection of the completed work on.

DECLARATION OF RESTRICTIVE COVENANTS. THIS DECLARATION OF RESTRICTIVE COVENANTS made this day of, 200_, by ( Declarant ). RECITALS

REQUIREMENTS NEEDED FOR VARIANCE APPLICATIONS

TABLE OF CONTENTS. Amended and Restated Articles of Incorporation of WESTCHESTER GARDENS AT THE PLANTATION

NON-EXCLUSIVE ROADWAY AND UTILITY EASEMENT DEED AND AGREEMENT

DEEP SUMP CATCH BASIN OPERATION & MAINTENANCE AGREEMENT

Municipality of Anchorage PURCHASE AND SALE AGREEMENT FOR LOT 17, NEVILLA PARK SUBDIVISION

FORECLOSURE PROPERTY INFORMATION SHEET. Name/Address of CLIENT: FORECLOSURE PROPERTY ADDRESS: LAST known name of Property Owner(s):

City of Scotts Valley INTEROFFICE MEMORANDUM

COVENANT AGREEMENT BETWEEN THE CITY OF RAPID CITY AND GWH PROPERTIES, LLC TO PERMIT CERTAIN ENCROACHMENTS IN PEDESTRIAN AND UTILITY EASEMENT

Prepared by and after recording Mail to Dave Ruttle McKeown, Fitzgerald, Zollner, Buck Hutchinson & Ruttle 2455 GlenwoodAve.

15, CARDINAL GLENN, LOCATED IN THE NW 1/4 OF THE NE 1/4 OF SECTION 28, T 7 N, R 8 E, CITY OF MADISON, DANE COUNTY, WISCONSIN.

Easement Agreement--Ingress and Egress Camel s Back Park City of Boise/Alistair and Connie Macmillan

WATER LINE & INGRESS/EGRESS EASEMENT AGREEMENT WITNESSETH:

REAL PROPERTY PURCHASE AGREEMENT BETWEEN CITY OF RAPID CITY AND MAPLE GREEN LLC

We Appreciate Your Business and Look Forward to Serving You in the Future.

BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

A RESOLUTION APPROVING PURCHASE OF LOT 9 PRAIRIE PARK FIRST ADDITION TO WAVERLY, IOWA RESOLUTION NO

ESCROW AGREEMENT - MAINTENANCE

TOWNSHIP OF LOWER MERION Department of Public Works

DECLARATION OF PARTY WALL RIGHTS, COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS

DECLARATION OF ELEVATED PEDESTRIAN WALKWAY EASEMENT

LCCCA.com MEMORANDUM OF LEASE

PLANNING BOARD APPLICATION

Transcription:

BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO I N THE MATTER OF THE APPLICATION OF AZTEC EXPLORATION, LLC REGARDING THE DISPOSITION OF ORDER NO. 407-1899 REGARDING APPLICATION OF NONCONSENTING PENALTIES UNDER THE ORDER, LARIMER AND WELD COUNTIES, COLORADO CAUSE NO. 407 DOCKET NO. TYPE: POOLING Application for Hearing Pursuant to Commission Rule 503(b)(10),.Aztec Exploration, LLC ("Aztec"), by and through its attorneys, Davis Graf~am &Stubbs LLP, seeks relief from the Oil and Gas Conservation Commission of the State of Colorado ("Commission" or "COGCC") in matters related to the disposition of Order No. 407-1899, obtained by Great Western Operating Company, LLC ("Great Western") regarding application of the nonconsent penalties under the order. Aztec is submitting this Application because Great Western seeks to subject Aztec to statutory cost recovery penalties even though Aztec is willing to pay its proportionate share of the costs for a certain mineral lease that it has obtained in the lands. The lease was obtained from an unleased mineral owner who was improperly noticed of the pooling application leading to Order No. 407-1899's approval and also did not receive a written offer to lease from Great Western as required by Commission Rules. As explained below, imposition of the cost recovery penalties on Aztec would be inconsistent with the statutory language, contrary to the purpose of statutory pooling, and inequitable under the circumstances. Affected Interest 1. Aztec is a limited liability company duly authorized to conduct business in the State of Colorado. 2. Aztec has acquired and currently owns certain leasehold interests in the in the following lands: Township 6 North, Range 68 West, 6th P.M. Section 24: E'/ZNE'/4 lying South of the bank of the Cache La Poudre River, W'/zNE'/4, E'/zNW'/4, SE'/4 Containing 353.00 acres, more or less. Larimer County, Colorado. A portion of these lands are within the Application Lands covered by the Order 407-1899. 3. Great Western has not acknowledged Aztec's leasehold ownership or provided Aztec with the opportunity to participate in the well operations for which it is 4412641.1

entitled. Aztec is directly and adversely affected by such conduct and by the operation of Order 407-1899 and its leasehold interest are entitled to legal protection under the Oil and Gas Act, C.R.S. 34-60-101 et seq ("Act"). Background and Procedural History 1. On December 1, 2016, Great Western's filed an application ("Pooling Application") for an order to pool all interests in an approximate 1,715.781-acre drilling and spacing unit established for the below-described lands ("Application Lands"), for the development and operation of the Niobrara and Codell Formations, and to subject any nonconsenting interests to the cost recovery provisions of 34-60-116(7), C.R.S., for the drilling of the r~aindance FC 23-232HNX Weil, Raindanc~ FC 23-232HN '~i~il, Raindane~ FC 23-249HN Well, Raindance FC 23-272HC Well, Raindance FC 23-289HNX Well, Raindance FC 23-289HN Well, Raindance FC 23-312HN Well, Raindance FC 23-312HC Well, Raindance FC 23-329HNX Well, Raindance FC 23-352HN Well, Raindance FC 23-369HN Well, Raindance FC 23-369HC Well, Raindance FC 23-392HNX Well, Raindance FC 26-009HN Well, Raindance FC 26-032HN Well, Raindance FC 26-032HC Well, Raindance FC 26-049HN Well, Raindance FC 26-072HNX Well, Raindance FC 26-089HC Well, Raindance FC 26-089HN Well, Raindance FC 26-112HN Well, Raindance FC 26-112HNX Well, Raindance FC 26-129HC Well, Raindance FC 26-152HN Well, and the Raindance FC 26-169HN Well ("Raindance Wells"): Township 6 North, Range 67 West, 6t" P.M. Section 19: S'/2 Section 20: W'/ZSW'/4 Section 29: W'/2NW'/4 Section 30: N'/2 Weld County, Colorado Township 6 North, Range 68 West, 6t" P.M. Section 23: SE'/4 Section 24: S'/2 Section 25: N'/2 Section 26: NE'/4 Larimer County, Colorado 2. On March 20, 2017, the Commission entered order 407-1899 which approved the Pooling Application. General Allegations 1. This dispute concerns the interests of to the Ruth and Harold Schmidt Revocable. Trust (dated February 3, 2011) ("Schmidt Trust"). At the time the Pooling Application was submitted, the Schmidt Trust was an unleased owner in the tracts to be pooled. The Schmidt Trust has since leased its interest to Aztec.

2. The Commission requires that an applicant, here Great Western, demonstrate that it has served the application on all person's owning an interest in the mineral estate of the tracts to be pooled "by mailing a copy thereof, first-class postage prepaid, to the last known mailing address of the person to be served, or by personal delivery." Rule 503.e. (emphasis added). 3. The purpose of pooling and imposing nonconsent penalties, as proposed in the Pooling Application, is to encourage participation in well operations through the consolidation of mineral interests and to provide for the sharing of the risks and benefits of oil and gas developi`nent. See Bruce M. Kramer &Patrick H. Martin, The Law of Pooling and Unitization, 3rd Edition 3.02 (2016). To that end, the Act and Commission Rules establish the following framework for participation and pooling: a. "In the absence of voluntary pooling, the commission, upon the application of any interested person, may enter an order pooling all interests in the drilling unit for the development and operation thereof." C.R.S. 34-60- 116(6). b. Additionally, each pooling order entered by the Commission "shall be upon terms and conditions that are just and reasonable, and that afford to the owner of each tract or interest in the drilling unit the opportunity to recover or receive, without unnecessary expense, his just and equitable share." Id. c. "No order pooling an unleased nonconsenting mineral owner shall be entered by the commission...until the commission shall have received evidence that such unleased mineral owner shall have been tendered a reasonable offer to lease... at the time application for such order is made and that such unleased mineral owner shall have been furnished in writin such owner's share of the estimated drilling and completion cost of the well...." Id. at 34-60-116(7)(d) (emphasis added). d. "An unleased owner shall be deemed a nonconsenting owner if, after at least 35 days' written notice, the unleased owner has failed or refused a reasonable offer to lease." Rule 530.c. (emphasis added). e. "An owner shall be deemed a nonconsenting owner in the area to be pooled if, after at least 35 days' written notice of.[certain well and drilling cost information], the owner does not elect in writing to consent to participate in the cost of the well concerning which the pooling order is sought." Rule 530.b. (emphasis added). 4. Paragraph 10 of the Pooling Application certified that Great Western served the Pooling Application upon all person's owning an interest in the mineral estate of the tracts to be pooled. Additionally, testimony and exhibits submitted pursuant to Rule 511 in support of the Pooling Application filed by Great Western similarly certified that all owners received notice of the Spacing Application and any unleased owners received an offer to lease.

5. Exhibit 2 of Great Western's Rule 511 Testimony filed in support of the Pooling Application indicate that Great Western provided notice of the application and a lease offer to the Schmidt Trust at the following address: RUTH AND HAROLD SCHMIDT REVOCABLE TRUST (DATED FEBRUARY 3, 2011) 4621 E. COUNTY ROAD 40 FORT COLLINS, CO 80525 6. The address for the Schmidt Trust Great Western relied upon was neither the currefit address nor last known address of record for the trust. Fu. ther, sucr information was of record in Larimer County and should have reasonably been obtained by Great Western. 7. The current and last known address of record for the Schmidt Trust was 1010 Walnut St., Windsor, CO 80550, as referenced in a Memorandum of Oil and Gas Lease between the Schmidt Trust and Synergy Resources Corporation, recorded on September 30, 2013, at Reception No. 20130074411, of the records of Larimer County, Colorado ("Synergy Lease") which includes lands within the Application Lands to the Pooling Application and Order 407-1899. The Synergy Lease is attached an incorporated herein as Exhibit A. 8. The Synergy Lease was properly recorded providing notice of the Schmidt Trust's current address and would have been included in any title review of the Application Lands. Since Great Western failed to serve the Schmidt Trust at the its last known address of record or provide it with a written offer to lease or well elections as required by the Act and Commission Rules, the interests of the Schmidt Trust cannot be deemed nonconsenting under Order 407-1899. 9. On or about September 12, 2017, the Schmidt Trust accepted a lease offered by Aztec which is recorded at Reception No. 20170074744 of the records of Larimer County. Therefore, the right to consent to the operations proposed by Great Western has been assumed by Aztec. As a result, Aztec, as the lessee, is entitled to Rule 530.b. elections for its proportionate share of the costs for the Raindance Wells. 10. Aztec intends to pay its proportionate share of the costs and risk of drilling the Raindance Wells. 1 1. At the time of this filing, Great Western has not acknowledged Aztec's leasehold ownership or delivered election letters to Aztec providing it with the opportunity to participate in the Raindance Wells operations by paying its proportionate share of the costs for such wells. As a result, Great Western is prohibiting Aztec the opportunity to recover or receive it's just and equitable share of the resource from the Raindance Wells and violating Aztec's correlative rights. Aztec is filing this Application to protect its acquired leasehold interest and to ensure such interest are not subject to

the nonconsent penalty provisions of Order 407-1899 given Great Western's procedural defects in obtaining the order. 12. Aztec certifies that within seven days of filing, it will serve a copy of the Application upon all persons entitled to notice pursuant to Rule 503.e. Relief Requested Based on the foregoing, Aztec respectfully requests the following relief: 1. That the Commission deny the imposition of statutory cost recovery penalties against Aztec with respect to the intere~t~ of the ~~hmidt Trust provided that Aztec is given the opportunity to participate in the Raindance Wells operations by paying its proportionate share of the costs for such wells based upon Aztec's acquired leasehold interest; and 2. That the Commission grant any additional relief that it deems just and proper in this matter. DATED this 30th day of November 2017. Respectfully submitted: tec Exploration, LLC Greg Nib~,.~ Dave Neslin Davis Graham &Stubbs LLP Attorneys for Aztec 1550 Seventeenth Street, Suite 500 Denver, Colorado 80202 Aztec's Address: Aztec Exploration, LLC ATTN: Josh Witter P.O. Box 621925 Littleton, CO 80162

VERIFICATION STATE OF COLORADO ) CITY AND COUNTY OF DENVER ss. ) Joshua Witter, of lawful age, being first duly sworn upon oath, deposes and says that he is a Managing Member for Aztec Exploration, LLC and that he has read the foregoing Application and that the matters therein contained are true to the best of his knowledge, information and belief. AZTEC EXPLORATION, LLC ~ i~ Joshua Witter Managing Member Subscribed and sworn to before me this 3 (~ day of November, 2017. Witness my hand and official seal. My commission expires: ~ ( ~ 2G2~ KELLY MATTESOM NOTARY PUBLIC STATE ~F COLORADO Notary identification #2Qt64025069 My Commissan Expires 7!112020 Notary Public (Signed}:1~,~~'C!~ ( ~~_ ~- Notary Public

RECEPTION#: 20130074411, 09/30/2013 at 11:49:27 AM, 1 OF 1, R $11.00 TD Pgs: 0 Angela Myers, Clerk & Recorder, Larimer County, CO Exhibit A MEMORANDUM OF OIL AND GAS LEASE STATE OF COLORADO COUNTY OF LARIMER KNOW ALL MEN BY THESE PRESENTS: WHEREAS, on the 27th day of AUpUSf, 2013, an Oil and Gas Lease was made and entered into by and between Ruth and Harold Schmidt Revocable Trust (dated February 3 2011), whose address is 1010 Walnut St.. Windsor. CO 80550, as Lessor, and Svnergv Resources Corporation, whose address 20203 Hip way a eve e, 80651, as Lessee. Whereby Lessor granted an Oil and Gas Lease on the following lands in the County and State named above; TOWNSHIP 6 NORTH, RANGE 68 WEST. 6TH P.M. Section 24: E/2NE/4 lying South of the South bank of the Cache La Poudre River, W/2NE/4, EI2NW/4, SE/4 which lease is for a term of three (31 years from August 27, 2013, with a two 2 ear option to extend, and as long thereafter as oil or gas shall be produced or operations are continuously prosecuted. Executed copies of this Oil and Gas Lease are in the possession of the Lessor and Lessee. it is the purpose hereof to give record notice of such Oil and Gas Lease. Inconsideration of the foregoing and the consideration paid for execution of such Oil and Gas Lease, the undersigned Lessor does hereby lease, let and demise unto Lessee the lands described above upon all of the terms and conditions set forth in such Oil and Gas Lease. Dated this 16th day of September, 2013. Ruth and Harold Schmidt Revocable Trust dated February 3, 2011 Nancy Freas, ccessor Trustee of the Ruth and Harold Schmidt Revocable Trust dated February 3, 2011 ACKNOWLEDGEMENT STATE OF COLORADO 1 SS. County of LARlMER 1 On this 16th day of September, 2013, before me, the undersigned Notary Public in and for said county and state, personally appeared Nancy Freas, Successor Trustee of the Ruth and Harold Schmidt Revocable Trust dated February 3, 2011, known to me to be the person or persons whose names are subscribed to the foregoing instrument, and acknowledged that the same was executed and delivered as her tree and voluntary act for the purposes therein set forth. In witness whereof hereunto set my hand and official seal as of the date hereinabove stated. My Commission Expires ii/io/ia `~'~` '~ ~f~1~'`~v'' ```,~~~n~uorn~~~~~~~ Notary Public `\``~OQ``~ HANsp~ii~/ Addl'eSs: FortS~ollins~,eCo gg5211oor ~ O'( ~R y? p N~ p U 9~'~G Qe ~~~/ii,.f O F ~+...~~~ BOLD RESOURCES LLC a/ BN~BW 24 E2NE S of River W2NE E2NW SE SchmMt Rev Trust~RH -Synergy 082713 memo Ise 2 (2) 6816 W R~WLAND AVE LITTLETON, CO 80128