Opinion ID: 1140822
Heading Depth: 1
Heading Rank: 1

Heading: About the Grass Creek Field

Text: The Grass Creek Field was discovered in 1914. The principal producing formations are the Embar and Tensleep formations, and they have been productive since 1923. Most of the development occurred during the 1940's and early 1950's. Pan American owns a lease on an 80-acre tract known as the Meeteetse 15 lease, described as the W 1/2 SW 1/4 of Section 18, Township 46 N., R. 98 W., in the northwest portion of the field. Adjoining it on the north is Marathon's Ehrlich lease, covering the NW 1/4 of Section 18, and on the east is Marathon's Wiley lease covering the E 1/2 SW 1/4 of Section 18. Through the years four wells were drilled on Pan American's Meeteetse 15 lease and three were drilled on Marathon's Wiley lease. Two wells on Pan American's lease are no longer productive. At the end of this opinion is a plat, marked Appendix A. It shows the leases of Pan American and Marathon, the wells thereon, and the location of the proposed well. Another plat, marked Exhibit 13, shows contour lines, according to Pan American's geology, for the Tensleep formation. Contour lines for the Embar formation are shown on Exhibit 14. It is undisputed that water is encroaching in the productive formations and eliminating production at the lower formation elevations. If the contour maps presented in evidence are assumed to be correct, and if it is assumed water will first replace oil at the lower levels, it becomes apparent that Pan American will not recover its full share of oil without an additional well. If an additional well is drilled, the Commission would have authority under ch. 139, § 1, S.L. of Wyoming 1969, to limit the production from such well, if necessary, in order to protect correlative rights of Marathon. In doing so, however, it would of course give consideration to production already lost by Pan American since the date of its application for a permit to drill. Marathon has offered expert testimony for its theory that a fault and the direction from which the water comes alter the productive zones. It is hard for us to accept this testimony as sufficient to overcome the physical fact of gravity, and in that connection we call attention to our holdings in Terry v. Moore, Wyo., 448 P.2d 601, 605, and Oeland v. Neuman Transit Company, Wyo., 365 P.2d 806, 810. However, without attempting at this point to weigh the effect of such testimony, let us first look at the Commission's statutory authority and its Rule 302, as applied to a field already developed and existing prior to the Commission's statutory authority and prior to its adoption of Rule 302. The oil and gas conservation act was adopted in 1951 and Rule 302 was promulgated after that. All this was many years after the Grass Creek Field was developed.