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 CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 150100029
ORDER NO. 407-1209 |
REPORT OF THE COMMISSION
The Commission heard this matter on January 26, 2015 at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to establish an approximate 320-acre drilling and spacing unit for the E˝ of Section 2, Township 7 North, Range 65 West, 6th P.M., and approve up to eight 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. DJ Resources, Inc. (Operator No. 10213) (“DJ” 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. The E˝ of Section 2, Township 7 North, Range 65 West, 6th P.M. is subject to this Rule for the Codell and Niobrara Formations.
5. On November 17, 2014, DJ, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to establish an approximate 320-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to eight 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 7 North, Range 65 West, 6th P.M.
Section 2: E˝
6. Applicant requests that the proposed wells be located on no more than two wellpads within the unit.
7. On January 5, 2015, DJ, 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 Sharon Crumb, Senior Landman for DJ, showed that DJ holds oil and gas leasehold interests and has a right to drill in the Application Lands.
9. Geologic testimony and exhibits submitted in support of the Application by Jack Rosenthal, Geoscience Supervisor for DJ, showed that the Codell and Niobrara Formations are present throughout the Application Lands, and are approximately 18 and 302 to 306 feet thick, and are generally of uniform thickness throughout the Application Lands.
10. Engineering testimony and exhibits submitted in support of the Application by Dominic Bazile, Executive Vice President for DJ, showed that the drainage area for analog horizontal Codell and Niobrara Formations wells are estimated at 168 acres for the Codell and 36.9 acres for the Niobrara Formation, and an appropriate 320-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 Codell and Niobrara Formations.
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. DJ agreed 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 establish an approximate 320-acre drilling and spacing unit for the E˝ of Section 2, Township 7 North, Range 65 West, 6th P.M., and to approve up to eight 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. An approximate 320-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to eight horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations:
Township 7 North, Range 65 West, 6th P.M.
Section 2: E˝
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 located on no more than two wellpads within the drilling and spacing 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 _____ day of February, 2015, as of January 26, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Jill Dorancy, Acting Secretary