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 |
) ) ) ) ) |
CAUSE NO. 407
DOCKET NO. 1406-UP-171
ORDER NO. 407-1066 |
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, including previously unlocatable interests, within an approximate 480-acre designated wellbore spacing unit established for Sections 13, 14, 15, 22, 23 and 24, Township 3 North, Range 68 West, 6th P.M., for the drilling of the Reynolds Cattle 30N-23HZ Well, for the development and operation of the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Kerr-McGee Oil & Gas Onshore LP (“Kerr-McGee” 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 13, 14, 15, 22, 23 and 24, Township 3 North, Range 68 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 Codell and Niobrara Formations. Sections 13, 14, 15, 22, 23 and 24, Township 3 North, Range 68 West, 6th P.M. are subject to this Order for the Niobrara Formation.
6. On April 28, 2014, the Commission entered Order No. 407-1012 which pooled all interests in an approximate 480-acre designated horizontal wellbore spacing unit established for the Application Lands, for the development and operation of the Niobrara Formation. Sections 13, 14, 15, 22, 23 and 24, Township 3 North, Range 68 West, 6th P.M. are subject to this Order for the Niobrara Formation.
7. On April 17, 2014, Kerr-McGee, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S. for an order to pool all interests, including previously unlocatable interests, in an approximate 480-acre designated wellbore spacing unit established for the below-described lands (“Application Lands”), for the drilling of the Reynolds Cattle 30N-23HZ Well (API No. 05-123-39135) (“Well”), for the development and operation of the Niobrara Formation:
Township 3 North, Range 68 West, 6th P.M.
Section 13: SW¼ SW¼
Section 14: S½ S½
Section 15: SE¼ SE¼
Section 22: NE¼ NE¼
Section 23: N½ N½
Section 24: NW¼ NW¼
8. On June 3, 2014, Kerr-McGee, 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 Nancy McDonald, Staff Landman for Kerr-McGee, stated that after the filing of the original pooling application in Docket No. 1404-UP-104 (Order No. 407-1012), Kerr-McGee located additional interested parties who are successors in interest to parties that had not been previously located because they appeared to be deceased individuals with no heirs and/or devisees. The interested parties had not previously received notice of the pooling application in Docket No. 1404-UP-104. At this time, Kerr-McGee has been unable to effect voluntary pooling of interests within the horizontal wellbore spacing unit. Accordingly, Kerr-McGee seeks an order pooling all interests in the horizontal wellbore spacing unit pursuant to the provisions of § 34-60-116(6), C.R.S., for the development and operation of the Niobrara Formation. Applicant stated Commission Rule 530.b and c. do not apply to the owners to be pooled by the application as Kerr-McGee is not seeking cost recovery penalties in the pending Application. Applicant stated that based upon examination of relevant contracts and records, all owners of an oil and gas interest in the tracts to be pooled (who could be located by Kerr-McGee) received timely notice of the Application. As of the date of this testimony, there are no pending objections or protests to the Application.
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. Kerr-McGee 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 upon a hearing by the Commission, the Commission may enter an order to pool all interests, including previously unlocatable interests, within an approximate 480-acre designated wellbore spacing unit established for Sections 13, 14, 15, 22, 23 and 24, Township 3 North, Range 68 West, 6th P.M., for the drilling of the Reynolds Cattle 30N-23HZ 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, including previously unnoticed interests, in the approximate 480-acre designated wellbore spacing unit established for the below-described lands, are hereby pooled, for the drilling of the Reynolds Cattle 30N-23HZ Well (API No. 05-123-39135), for the development and operation of the Niobrara Formation:
Township 3 North, Range 68 West, 6th P.M.
Section 13: SW¼ SW¼
Section 14: S½ S½
Section 15: SE¼ SE¼
Section 22: NE¼ NE¼
Section 23: N½ N½
Section 24: NW¼ NW¼
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.
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