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, ADAMS COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 1406-SP-2072
ORDER NO. 407-1038 |
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 establish an approximate 640-acre drilling and spacing unit for Section 14, Township 1 South, Range 67 West, 6th P.M., and approve up to 12 horizontal wells within the unit, for the production of oil, gas, associated hydrocarbons from the Codell and Niobrara Formations.
FINDINGS
The Commission finds as follows:
1. Ward Petroleum Corporation (“Ward” 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. Section 14, Township 1 South, Range 67 West, 6th P.M. is subject to Rule 318A for the Codell and Niobrara Formations.
5. On December 19, 1983, the Commission entered Order No. 407-1 (amended March 29, 2000) which, among other things, established 80-acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation underlying certain lands with the unit to be designated by the operator drilling the first well in the quarter section. Section 14, Township 1 South, Range 67 West, 6th P.M. is subject to Rule 318A for the Codell Formation.
6. On February 19, 1992, the Commission entered Order No. 407-87 (amended August 20, 1993) which established 80-acre drilling and spacing units for the production of oil and/or gas from the Codell and Niobrara Formations underlying certain lands, with the permitted well locations in accordance with the provisions of Order No. 407-1. Section 14, Township 1 South, Range 67 West, 6th P.M. is subject to Rule 318A for the Codell and Niobrara Formations.
7. On April 17, 2014, Ward, by its attorneys, filed with the Commission a verified concurrent application (“Concurrent Application”), Docket No. 1406-UP-186, for an order to pool all interests within an approximate 640-acre drilling and spacing unit for the development and operation of the Codell and Niobrara Formations.
8. On April 17, 2014, Ward, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S. for an order to establish an approximate 640-acre drilling and spacing unit for below-described lands (“Application Lands”), and approve up to 12 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 1 South, Range 67 West, 6th P.M.
Section 14: All
Applicant also requested to locate the surface facilities from the proposed wells on no more than two wellpads within the unit.
9. On June 3, 2014, Ward, 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.
10. Land testimony and exhibits submitted in support of the Application by Ben Schuessler, Contract Landman for Ward, showed that Ward holds oil and gas leasehold interests in the Application Lands.
11. Geologic testimony and exhibits submitted in support of the Application by Jordan Reveille, Geologist for Ward, showed that the Niobrara Formation is a series of chalks, organic marls and limestones deposits. The Codell Formation is a middle to upper shoreface sandstone deposits. Testimony further showed that the total thickness of the Niobrara Formations ranges from approximately 355-380 feet thick in the eastern portion of the proposed spacing unit and the total thickness of the Codell Formation ranges from 14 to 16 feet thick with the thickest area in the western portion of the proposed spacing unit. The Codell and Niobrara Formations are present under the Application Lands and are a common source of supply.
12. Engineering testimony and exhibits submitted in support of the Application by Mark Jopling, Vice-President of Operations for Ward, showed that the drainage area for analog horizontal Codell and Niobrara wells are estimated at 90 acres and 20 acres respectively, and 640-acre drilling and spacing units are therefore not less than the maximum area than can be efficiently, economically and effectively drained by a horizontal well producing oil, gas and associated hydrocarbons from the Codell or Niobrara Formations. Such testimony also indicated the proposed drilling and spacing unit will prevent or assist in preventing waste by ensuring that the pool as a whole may be efficiently and economically developed, without prejudice to the rights of other leasehold or mineral owners.
13. 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.
14. Ward agreed to be bound by oral order of the Commission.
15. 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 640-acre drilling and spacing unit for Section 14, Township 1 South, Range 67 West, 6th P.M., and approve up to 12 horizontal wells within the unit, for the production of oil, gas, associated hydrocarbons from the Codell and Niobrara Formations.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 12 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 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:
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Township 1 South, Range 67 West, 6th P.M.
Section 14: All
2. All proposed wells shall be located from no more than two multi-well pads within the unit.
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