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 CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 1406-SP-2069
ORDER NO. 407-1035 |
REPORT OF THE COMMISSION
The Commission heard this matter on June 17, 2014, at the Rifle Branch Library, Garfield County Public Library District, 207 East Avenue, Rifle, Colorado, upon application for an order to: (1) maintain two approximate 640-acre drilling and spacing units established by Order Nos. 407-779 and 535-4 for Sections 35 and 36, Township 5 North, Range 62 West, 6th P.M., for the existing production of oil, gas, and associated hydrocarbons from the Niobrara Formation; (2) establish an approximate 1,280-acre drilling and spacing unit and approve up to 16 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; and (3) establish an approximate 1,280-acre drilling and spacing unit and approve up to four horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell 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, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule. Sections 35 and 36, Township 5 North, Range 62 West, 6th P.M. are subject to Rule 318A for the Codell and Niobrara Formations.
5. On February 22, 2011, the Commission entered Order Nos. 407-779 and 535-4 (corrected on April 4, 2013) which established 74 approximate 640-acre drilling and spacing units, and approved one horizontal well for each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 35 and 36, Township 5 North, Range 62 West, 6th P.M. are subject to this Order for the Codell and Niobrara Formations.
6. On April 17, 2014, BBC, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S. for an order to: (1) maintain two approximate 640-acre drilling and spacing units established by Order Nos. 407-779 and 535-4 for the below-described lands (“Application Lands”) for the existing production of oil, gas, and associated hydrocarbons from the Niobrara Formation; (2) establish an approximate 1,280-acre drilling and spacing unit and approve up to 16 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; (3) establish an approximate 1,280-acre drilling and spacing unit and approve up to four horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation; and (4) require 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 5 North, Range 62 West, 6th P.M.
Section 35: All
Section 36: All
Applicant states that proposed wells shall be located on no more than five multi-well pads within the drilling and spacing unit
7. On June 3, 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.
8. Land testimony and exhibits submitted in support of the Application by Will Vaughan, Landman for BBC, showed that the Applicant is an owner with the right to drill wells in the Application Lands.
9. Geologic testimony and exhibits submitted in support of the Application by John Roesink, Petroleum Geologist for BBC, showed that the thickness of the Niobrara Formation underlying the Application Lands ranges from approximately 258 feet to 260 feet and the thickness of the Codell Formation underlying the Application Lands is approximately 7 feet to 8 feet. Further testimony showed the Niobrara Formation is a sequence of chalks, marls and limestones and is a common source of supply, while the Codell Formation is a very fine sandstone/siltstone and is also a common source of supply.
10. 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 Codell and Niobrara Formations 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 16 horizontal Niobrara wells and four horizontal Codell wells, while protecting correlative rights of adjacent mineral owners.
11. 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.
12. BBC agreed to be bound by oral order of the Commission.
13. 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) maintain two approximate 640-acre drilling and spacing units established by Order Nos. 407-779 and 535-4 for Sections 35 and 36, Township 5 North, Range 62 West, 6th P.M., for the existing production of oil, gas, and associated hydrocarbons from the Niobrara Formation; (2) establish an approximate 1,280-acre drilling and spacing unit and approve up to 16 horizontal wells within the unit for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; and (3) establish an approximate 1,280-acre drilling and spacing unit and approve up to four horizontal wells within the unit for the production of oil, gas, and associated hydrocarbons from the Codell Formation.
ORDER
IT IS HEREBY ORDERED:
1. Two approximate 640-acre drilling and spacing units established by Order Nos. 407-779 and 535-4 for Sections 35 and 36, Township 5 North, Range 62 West, 6th P.M., are hereby maintained, for the existing production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
2. An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 16 horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated 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 from the Niobrara Formation, without exception being granted by the Director:
Township 5 North, Range 62 West, 6th P.M.
Section 35: All
Section 36: All
3. An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to four horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation, with the treated 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 from the Codell Formation, without exception being granted by the Director:
Township 5 North, Range 62 West, 6th P.M.
Section 35: All
Section 36: All
4. All wells permitted under this Order shall be drilled from no more than five multi-well pads within the unit, subject to Rule 318A.
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 __8th _ day of July, 2014, as of June 17, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary