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
DOCKET NO. 1412-AW-27
ORDER NO. 407-1158 |
REPORT OF THE COMMISSION
The Commission heard this matter on December 15, 2014, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to approve an additional six horizontal wells, for a total of 10 horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 407-559 for Section 28, Township 7 North, Range 62 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Bonanza Creek Energy LLC (Operator No. 8960) (“Bonanza” 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 June 27, 2011 (Corrected February 14, 2012), the Commission entered Order No. 407-559 which established seven approximate 640-acre drilling and spacing units for certain lands including the Application Lands, and approve one horizontal well within each unit, for the production of gas and associated hydrocarbons from the Niobrara Formation.
5. On July 9, 2014 (Corrected on September 16, 2014), the Commission entered Order No. 407-660 which approved up to four horizontal wells within an approximate 640-acre drilling and spacing unit established for Section 28, Township 7 North, Range 62 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
6. On October 16, 2014, Bonanza, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to approve an additional six horizontal wells, for a total of up to ten horizontal wells, within an approximate 640-acre drilling and spacing unit established for the below-described lands (“Application Lands”), for production of oil, gas, and associated hydrocarbons from the Niobrara Formation, with the productive interval of any horizontal wellbore to be 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 7 North, Range 62 West, 6th P.M.
Section 28: All
7. On November 24, 2014, Bonanza, 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. Land testimony and exhibits submitted in support of the Application by Caroline Heuring, Landman for Bonanza, showed that both the surface and the mineral interest in the Application Lands is owned in fee, and that Bonanza owns a partial undivided leasehold ownership interest in the Application Lands.
9. Geoscience testimony and exhibits submitted in support of the Application by Jeffrey M. Schroeder, Petroleum Geologist with Bonanza, showed the Niobrara Formation is present throughout the Application Lands, is approximately 260 to 280 feet thick, and is generally of uniform thickness throughout the Application Lands.
10. Engineering testimony and exhibits submitted in support of the Application by Edward M. Polishuk, Senior Reservoir Engineer for Bonanza, showed that the drainage area for analogue horizontal Niobrara wells is not greater than 155 acres, and an approximate 640-acre drilling and spacing unit is 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. Bonanza 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 approve an additional six horizontal wells, for a total of 10 horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 407-559 for Section 28, Township 7 North, Range 62 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
ORDER
NOW, THEREFORE IT IS ORDERED, that:
1. An additional six horizontal wells, for a total of up to 10 horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 407-559 for the below described lands, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 7 North, Range 62 West, 6th P.M.
Section 28: All
2. The productive interval of the wellbore shall 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.
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 January, 2015, as of December 15, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Jill Dorancy, Acting Secretary