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. 1410-SP-2167

 

ORDER NO. 407-1128

 

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 establish two approximate 320-acre drilling and spacing units for Section 25, Township 6 North, Range 62 West, 6th P.M., and approve up to eight horizontal wells within each 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”) 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.         Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that, on unspaced lands, wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and located not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply. Section 25, Township 6 North, Range 62 West, 6th P.M. is subject to this Rule for the Niobrara Formation. 

                                                                                                  

5.         On February 22, 2011, the Commission entered Order Nos. 407-779 and 535-4 (corrected April 4, 2013) which established 74 approximate 640-acre drilling and spacing units and approved one horizontal well in each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 25, Township 6 North, Range 62 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

6.         On March 25, 2013, the Commission entered Order No. 535-303 which vacated the approximate 640-acre drilling and spacing unit established by Order No. 535-4 and established an approximate 320-acre drilling and spacing unit and approved one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation. Section 25, Township 6 North, Range 62 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

7.         On August 28, 2014, BBC, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to establish two approximate 320-acre drilling and spacing units for the below-described lands (“Application Lands”) and to approve up to eight horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, 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 6 North, Range 62 West, 6th P.M.
Section 25:      All

 

Applicant also requested that all proposed wells be drilled from no more than five multi-well pads on the surface of the drilling unit, subject to Rule 318.a.

 

8.         On October 7, 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.

 

            9.         Land testimony and exhibits submitted in support of the Application by Collen M. Kennedy, Land Manager for BBC, showed that BBC 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 Charles W. Campbell, Sr. Geologist Advisor for BBC, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 261 feet to 265 feet thick, and is generally of uniform thickness throughout the Application Lands.

 

11.       Engineering testimony and exhibits submitted in support of the Application by Kevin Bittel, Senior Reservoir Engineer for BBC, showed that the drainage area for analog horizontal Niobrara Formation wells are estimated at 37 acres, and 320-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 Niobrara Formation.

 

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.       BBC 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 establish two approximate 320-acre drilling and spacing units for Section 25, Township 6 North, Range 62 West, 6th P.M. and to approve up to eight horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         Two approximate 320-acre drilling and spacing units for the below-described lands, is hereby established, and a total of up to eight horizontal wells within each unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:

 

 Township 6 North, Range 62 West, 6th P.M.
Section 25:      All

 

2.         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.

 

3.         The proposed wells shall be drilled from no more than five multi-well pads within the unit, subject to Rule 318.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 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