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 & 535
DOCKET NO. 1407-SP-2077
ORDER NO. 407-1085 |
REPORT OF THE COMMISSION
The Commission heard this matter on July 28, 2014, at the Weld County Administration Building - Events Center, 1150 “O” Street, Greeley, CO, upon application for an order to: 1) vacate 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 61 West, 6th P.M.; and 2) establish an approximate 1,280-acre drilling and spacing unit for Sections 35 and 36, Township 5 North, Range 61 West, 6th P.M. and approve a total of up to 16 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, 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 61 West, 6th P.M. are subject to Rule 318A for the Niobrara Formation.
5. On February 22, 2011 (Corrected April 4, 2013), the Commission entered Order Nos. 407-779 and 535-4 which, among other things, established 74 approximate 640-acre drilling and spacing units, and approved one horizontal well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 35 and 36, Township 5 North, Range 61 West, 6th P.M. are subject to this Order for the Niobrara Formation.
6. On May 29, 2014, BBC, by its attorneys, filed with the Commission a verified application (“Application”) for an order to: 1) vacate 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 61 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and 2) establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve a total of up to 16 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 5 North, Range 61 West, 6th P.M.
Section 35: All
Section 36: All
Applicant states that any proposed wells to be drilled under this Application will be drilled from no more than four multi-well pads within the drilling unit, subject to Rule 318A.
7. On July 15, 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. 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.
9. 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 the thickness ranges from approximately 310 to 318 feet. Further testimony showed the Niobrara Formation is a sequence of chalks, marls and limestones and is a common source of supply.
10. 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. Further testimony revealed the well drainage area for 640-acre laterals would accommodate up to 16 horizontal Niobrara wells.
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 agrees 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) vacate 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 61 West, 6th P.M.; and 2) establish an approximate 1,280-acre drilling and spacing unit for Sections 35 and 36, Township 5 North, Range 61 West, 6th P.M. and approve a total of up to 16 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara 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 61 West, 6th P.M., are hereby vacated.
2. An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and 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 intervals of the wellbore of any permitted wells to be located not less than 460 feet from the outer boundary of the proposed unit and not less than 150 feet from the treated interval of any well being drilled or producing from the Niobrara Formation, without exception being granted by the Director:
Township 5 North, Range 61 West, 6th P.M.
Section 35: All
Section 36: All
3. The proposed wells shall be located on no more than four 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 13th day of August, 2014, as of July 28, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary