BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE NIOBRARA FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 1404-SP-2032
ORDER NO. 407-1003 |
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: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 407-583 for Section 5, Township 6 North, Range 61 West, 6th P.M.; 2) vacate an approximate 640-acre drilling and spacing unit established by Order Nos. 407-827 and 535-387 for Section 8, Township 6 North, Range 61 West, 6th P.M.; 3) establish an approximate 1,280-acre drilling and spacing unit and approve a total of up to eight horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Bill Barrett Corporation (“BBC” 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 (As of February 1, 2014), the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule. Sections 5 and 8, Township 6 North, Range 61 West, 6th P.M. are subject to Rule 318A for the Niobrara Formation.
5. On April 16, 2012, the Commission entered Order No. 407-583 which established nine approximate 640-acre drilling and spacing units, and approved up to four horizontal wells for each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 5, Township 6 North, Range 61 West, 6th P.M. is subject to this Order.
6. On July 29, 2013 (amended March 19, 2014), the Commission entered Order Nos. 407-827 and 535-387 which established an approximate 640-acre drilling and spacing unit, and approved up to eight horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 8, Township 6 North, Range 61 West, 6th P.M. is subject to this Order.
7. On February 27, 2014, BBC, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 407-583 for Section 5, Township 6 North, Range 61 West, 6th P.M.; 2) vacate an approximate 640-acre drilling and spacing unit established by Order Nos. 407-827 and 535-387 for Section 8, Township 6 North, Range 61 West, 6th P.M.; 3) establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve a total of up to eight horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of the wellbore will 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, producing from the Niobrara Formation, without exception being granted by the Director.
Township 6 North, Range 61 West, 6th P.M.
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Applicant stated that the proposed wells be located from no more than four multi-well pads within the unit, subject to Rule 318.A. or on adjacent lands with consent of the landowner.
8. On April 17, 2014, BBC, 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.
9. Land testimony and exhibits submitted in support of the Application by Colleen Kennedy, Land Manager for BBC, showed that BBC owns substantial leasehold interests in the Application Lands.
10. Geologic testimony and exhibits submitted in support of the Application by Charles W. Campbell, Senior Geologist Advisor for BBC, showed that the Niobrara Formation underlies the entirety of the Application Lands and ranges from approximately 263 to 265 feet thick. Further testimony showed the Niobrara Formation is a sequence of chalks and limestones.
11. Engineering testimony and exhibits submitted in support of the Application by Kevin Bittel, Senior Reservoir Engineer for BBC, showed that drilling and completing horizontal wells within the Niobrara Formation underlying the Application Lands is the most efficient and economic method of developing the resource. Testimony concluded a 1,280-acre unit would accommodate up to eight horizontal Niobrara wells, while protecting correlative rights of adjacent mineral owners.
12. 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.
13. BBC agreed to be bound by oral order of the Commission.
14. 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: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 407-583 for Section 5, Township 6 North, Range 61 West, 6th P.M.; 2) vacate an approximate 640-acre drilling and spacing unit established by Order Nos. 407-827 and 535-387 for Section 8, Township 6 North, Range 61 West, 6th P.M.; 3) establish an approximate 1,280-acre drilling and spacing unit and approve a total of up to eight horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit established by Order No. 407-583 for Section 5 , Township 6 North, Range 61 West, 6th P.M. is hereby vacated.
2. An approximate 640-acre drilling and spacing unit established by Order Nos. 407-827 and 535-387 for Section 8 , Township 6 North, Range 61 West, 6th P.M. is hereby vacated.
3. An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to eight horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of the wellbore will 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 6 North, Range 61 West, 6th P.M.
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4. All permitted wells will be drilled from no more than four multi-well pads within the unit, subject to Rule 318A, or on adjacent lands with consent of the surface owner.
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