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

 

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 1403-SP-2018

 

ORDER NO. 407-1000

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on April 28, 2014, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to establish an approximate 320-acre drilling and spacing unit for the N˝ of Section 8, Township 7 North, Range 65 West, 6th P.M. and to approve up to 6 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.

 

FINDINGS

 

The Commission finds as follows:

 

1.         DJ Resources, Inc. (“DJ Resources” or “Applicant”), as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

 

2.         Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

 

3.         The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order pursuant to the Oil and Gas Conservation Act.

 

4.         On April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule.  The N˝ of Section 8, Township 7 North, Range 65 West, 6th P.M., is subject to Rule 318A for the Codell-Niobrara Formations.

 

5.         On February 27, 2014 (Amended March 21, 2014), DJ Resources, by their attorneys, filed a verified amended application (“Amended Application”) pursuant to §34-60-116, C.R.S. for an order to establish an approximate 640-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to 6 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of the wellbore to be located no closer than 460 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:

 

                        Township 7 North, Range 65 West, 6th P.M.

                        Section 8:        N˝

 

 

 

6.         On April 15, 2014, DJ Resources, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits.  Sworn written testimony and exhibits were submitted in support of the Application.

 

7.         Land testimony and exhibits submitted in support of the Application by Sharon Crumb, Senior Landman for DJ Resources, showed the DJ Resources is an owner with the right to drill within the unit.

 

8.         Geologic testimony and exhibits submitted in support of the Application by Jack D. Rosenthal, Geoscience Supervisor for DJ Resources, showed the Codell and Niobrara Formations underlie the entirety of the Application Lands and the Niobrara Formation ranges from approximately 304 to 310 feet thick, while the Codell Formation is approximately 20 feet thick.  Further testimony showed the Niobrara Formation is a sequence of chalks, marls and limestones, while the Codell Formation is a very fine sandstone/siltstone and the Codell-Niobrara Formations are a common source of supply.

 

9.         Engineering testimony and exhibits submitted in support of the Application by Dominic J.  Bazile II, Executive Vice President and Chief Operating Officer for DJ Resources, showed that drilling and completing horizontal wells within the Codell and Niobrara Formations underlying the Application Lands is the most efficient and economic method of developing the resource.  Further testimony revealed the well drainage area for 320-acre laterals would accommodate up to six horizontal Codell-Niobrara wells, while protecting correlative rights of adjacent mineral owners.

 

10.       The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.

 

11.       DJ Resources agreed to be bound by oral order of the Commission. 

 

12.       Based on the facts stated in the verified Application, having received no protests, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to establish an approximate 320-acre drilling and spacing unit for the N˝ of Section 8, Township 7 North, Range 65 West, 6th P.M. and to approve up to 6 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 320-acre drilling and spacing unit for the below-described lands, is hereby established, and up to 6 horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of the wellbore to be located no closer than 460 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:

 

                       

                        Township 7 North, Range 65 West, 6th P.M.

                        Section 8:        N˝

 

IT IS FURTHER ORDERED:

 

1.         The provisions contained in the above order shall become effective immediately.

 

2.         The Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

 

3.         Under the State Administrative Procedure Act the Commission considers this Order to be final agency action for purposes of judicial review within 35 days after the date this Order is mailed by the Commission.

 

4.         An application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

 

 

            ENTERED this   23rd  day of May, 2014, as of April 28, 2014.                     

 

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary