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 CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
) ) ) ) ) |
CAUSE NO. 407
DOCKET NO. 1410-SP-2139
ORDER NO. 407-1125 |
REPORT OF THE COMMISSION
The Commission heard this matter on October 27, 2014 at the Durango Public Library, 1900 E. 3rd Avenue, Durango, CO 81301, upon application for an order to: 1) maintain the approximate 80-acre drilling and spacing units established for Section 21, Township 1 North, Range 66 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations; 2) maintain the approximate 320-acre drilling and spacing units and the approximate 160-acre drilling and spacing unit established for Section 21, Township 1 North, Range 66 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations commingled or dually-completed to the Dakota or “J” Sand Formations; and 3) establish an approximate 640-acre drilling and spacing unit for Section 21, Township 1 North, Range 66 West, 6th P.M., and approve up to four horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
FINDINGS
The Commission finds as follows:
1. Carrizo Oil & Gas, Inc. (“Carrizo” or “Applicant”) 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 21, Township 1 North, Range 66 West, 6th P.M. is subject to this Rule for the Codell and Niobrara Formations.
5. On February 19, 1992 (amended August 20, 1993), the Commission entered Order No. 407-87 which established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the permitted well locations in accordance with the provisions of Order No. 407-1. Section 21, Township 1 North, Range 66 West, 6th P.M. is subject to this Order for the Codell and Niobrara Formations.
6. On November 16, 1992, the Commission entered Order No. 499-15 which established 320-acre drilling and spacing units for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations commingled or dually-completed with the Dakota or “J” Sand Formations. Section 21, Township 1 North, Range 66 West, 6th P.M. is subject to this Order for the Codell and Niobrara Formations.
7. On August 28, 2014, Carrizo, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: 1) maintain the approximate 80-acre drilling and spacing units established for the below-described lands (“Application Lands”), for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations; 2) maintain the approximate 320-acre drilling and spacing units and the approximate 160-acre drilling and spacing unit established for the Application Lands, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations commingled or dually-completed to the Dakota or “J” Sand Formations; and 3) establish an approximate 640-acre drilling and spacing unit for the Application Lands, and approve up to four 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
North, Range 66 West, 6th P.M.
Section 21: All
8. On October 14, 2014, Carrizo, 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 Ross D. Wardlaw, Senior Landman for Carrizo, showed that Carrizo holds oil and gas leasehold interests and has a right to drill in the Application Lands.
10. Geologic testimony and exhibits submitted in support of the Application by Paul Fears, DJ Basin Geologist for Carrizo, showed that the Codell and Niobrara Formations are contiguous under the Application Lands. The Niobrara Formation averages approximately 440 feet in thickness, generally increasing towards the southwest by approximately 180 feet, and is a common source of supply and the Codell Formation averages approximately 20 feet in thickness, generally increasing towards the northwest by approximately 10 feet, and is a common source of supply.
11. Engineering testimony and exhibits submitted in support of the Application by Andrew R. Agosto, Vice President of Business Development for Carrizo, showed that based on the drainage area for analog horizontal Codell and Niobrara Formations wells,640-acre drilling and spacing unit 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 and Niobrara Formations.
12. 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.
13. Carrizo agreed to be bound by oral order of the Commission.
14. 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 the approximate 80-acre drilling and spacing units established for Section 21, Township 1 North, Range 66 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations; 2) maintain the approximate 320-acre drilling and spacing units and the approximate 160-acre drilling and spacing unit established for Section 21, Township 1 North, Range 66 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations commingled or dually-completed to the Dakota or “J” Sand Formations; and 3) establish an approximate 640-acre drilling and spacing unit for Section 21, Township 1 North, Range 66 West, 6th P.M., and approve up to four horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
ORDER
IT IS HEREBY ORDERED:
1. The approximate 80-acre drilling and spacing units established for the below-described lands, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations, are hereby maintained.
Township 1
North, Range 66 West, 6th P.M.
Section 21: All
2. The approximate 320-acre and other existing drilling and spacing units established for the below-described lands, for the production of oil, gas, and associated hydrocarbons from existing wells producing from or completed to the Codell and Niobrara Formations commingled or dually-completed to the Dakota or “J” Sand Formations, are hereby maintained.
Township 1
North, Range 66 West, 6th P.M.
Section 21: All
3. An approximate 640-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 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:
Township 1
North, Range 66 West, 6th P.M.
Section 21: All
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 18th day of November, 2014, as of October 27, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Robert J. Frick, Secretary