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 NIOBRARA FORMATION, WATTENBERG  FIELD, WELD  COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 1406-UP-170

 

ORDER NO. 407-1065

 

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 an application for an order to pool all interests within an approximate 320-acre wellbore spacing unit established for Sections 21 and 28, Township 4 North, Range 67 West, 6th P.M., for the drilling of the SunMarke 28U-334 Well, for the development and operation of the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         PDC Energy, Inc (“PDC” 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 21 and 28, Township 4 North, Range 67 West, 6th P.M. are subject to Rule 318A for the Niobrara Formation.

 

5.         On February 19, 1992, Order No. 407-87 (amended August 20, 1993) 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. Sections 21 and 28, Township 4 North, Range 67 West, 6th P.M. are subject to this Order for the Niobrara Formation.

 

6.         On May 29, 2012, Order No. 407-655 pooled all interests in three wellbore spacing units for the development and operation of the Codell and Niobrara Formations.  Order No. 407-655 does not affect this Application.

 

7.         On November 15, 2012, Order No. 407-730 pooled all interests in a wellbore spacing unit for the development and operation of the Codell and Niobrara Formations.  Order No. 407-730 does not affect this Application.

 

8.         On May 6, 2013, Order No. 407-785 pooled all interests in a wellbore spacing unit for the development of the Codell-Niobrara Formation.  Order No. 407-785 does not affect this Application.

 

7.         On April 17, 2014, PDC, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to pool all interests in an approximate 320-acre wellbore spacing unit for the below-described lands (“Application Lands”), for the development and operation of the Niobrara Formation, for the drilling of the SunMarke 28U-334 Well (API No. 05-123-38900):

 

                        Township 4 North, Range 67 West, 6th P.M.

                        Section 21:      S½ S½

                        Section 28:      N½ N½

 

11.       On June 3, 2014, PDC, 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.

 

12.       Land testimony and exhibits submitted in support of the Application by Joshua B. Wagner, Regional Landman for PDC, confirmed that Commission Rule 530 does not apply as there are no working interest owners or unleased mineral interest owners subject to the Application, and Applicant is not seeking cost recovery pursuant to §34-60-116(7), C.R.S. for the Well.

 

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.       PDC 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 Unit review of the Application under Rule 511., the Commission should enter an order to pool all interests within an approximate 320-acre wellbore spacing unit established for Sections 21 and 28, Township 4 North, Range 67 West, 6th P.M. for the drilling of the SunMarke 28U-334 Well, for the development and operation of the Niobrara Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, all interests in the approximate 320-acre wellbore spacing unit  established for the below-described lands, are hereby pooled, for the development and operation of the Niobrara Formation, for the drilling of the SunMarke 28U-334 Well:

                       

                        Township 4 North, Range 67 West, 6th P.M.

                        Section 21:      S½ S½

                        Section 28:      N½ N½

 

2.         The production obtained from the wellbore spacing unit shall be allocated to each owner in the unit on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within the wellbore spacing unit; each owner of an interest in the wellbore spacing unit shall be entitled to receive its share of the production of the Well located on the wellbore spacing unit applicable to its interest in the wellbore spacing unit.

 

3.         Nothing in this order is intended to conflict with §34-60-116, C.R.S., as amended.  Any conflict that may arise shall be resolved in favor of the statute.

 

4.         The wellbore spacing unit described above, shall be considered a drilling and spacing unit established by the Commission for purposes of Rule 530.a.

 

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