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. 150100037
ORDER NO. 407-1212 |
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 1,120-acre drilling and spacing unit for Sections 7 and 18, Township 6 North, Range 65 West, 6th P.M. and Sections 12 and 13, Township 6 North, Range 66 West, 6th P.M., and approve up to nine 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. Noble Energy, Inc. (Operator No. 100322 ) (“Noble” 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.
5. On February 19, 1992 (amended August 20, 1993), the Commission entered Order No. 407-87 establishing 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.
6. On November 17, 2014, Noble, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to establish an approximate 1120-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to nine 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 6 North, Range 65 West, 6th P.M.
Section 7: SW¼NE¼, S½NW¼, SW¼, W½SE¼
Section 18: N½NW¼, NW¼NE¼
Township 6 North, Range 66 West, 6th P.M.
Section 12: S½N½, S½
Section 13: N½N½
7. Applicant states that the wells shall be drilled from no more than two well pads, without exception being granted by the Director.
8. On January 5, 2015, Noble, 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. On January 15, 2015, Noble, by its attorneys, and the Bureau of Land Management (“BLM”) agreed that the Application Lands contain federal leased minerals and/or unleased minerals. As such, Noble agrees to submit a Communitization Agreement (“CA”) to the BLM for any existing wells that contain federal acreage within the existing unit within 60 days of the entry of the order. Noble also agrees to submit a CA to the BLM within 90 days from the date of first production (as defined in the Commission Rules) from the initial horizontal well drilled within the drilling and spacing unit.
9. Land testimony and exhibits submitted in support of the Application by Julie T. Jenkins, Land Manager for Noble showed that Noble holds oil and gas leasehold interests and has a right to drill in the Application Lands. The land testimony further showed that the wells listed below may be producing from the lands to be included in the proposed 1,120–acre drilling and spacing unit and will remain subject to the currently applicable Commission approved drilling and spacing units and shall not become subject to the proposed 1,120-acre drilling and spacing unit:
|
Name |
API No. |
Operator |
Formation |
|
Bailey Federal 1 |
05-123-10934 |
Noble Energy, Inc. |
Codell-Niobrara |
|
Fagerberg 12-10G6 |
05-123-18543 |
Noble Energy, Inc. |
Codell |
|
Ottoson I 12-25 |
05-12329233 |
Noble Energy, Inc. |
Codell |
|
Ottoson I 12-12 |
05-123-29234 |
Noble Energy, Inc. |
Codell |
|
Southard I 12-06 |
05-123-29231 |
Noble Energy, Inc. |
Codell |
|
Ottoson 12-14G6 |
05-123-18233 |
Noble Energy, Inc. |
Codell-Niobrara |
|
Southard 2 |
05-123-12378 |
Noble Energy, Inc. |
Codell |
|
Farr 2 |
05-123-12141 |
Noble Energy, Inc. |
Codell |
|
Ottoson 3 |
05-123-12390 |
Noble Energy, Inc. |
Codell-Niobrara |
|
Moore 1 |
05-123-12379 |
Noble Energy, Inc. |
Codell |
|
Ottoson 1 |
05-123-12128 |
Noble Energy, Inc. |
Codell-Niobrara |
|
Haythorn 7-5G5 |
05-123-18114 |
Noble Energy, Inc. |
Codell |
|
Farr 4 |
05-123-12373 |
Noble Energy, Inc. |
Codell |
10. Geologic testimony and exhibits submitted in support of the Application by Joseph Boreman, Geologist for Noble, showed that the Codell Formation is present throughout the Application Lands, is approximately 250 feet thick, and is generally of uniform thickness throughout the Application Lands, and that the Niobrara Formation is present throughout the Application Lands, is approximately 18 to 22 feet thick, and is generally of uniform thickness throughout the Application Lands.
11. Engineering testimony and exhibits submitted in support of the Application by Christopher Lee, Production Engineer for Noble, and a review of the testimony provided in support of Orders 407-780 and 407-812, of which the Hearing Officer took administrative notice as requested by the applicant, showed that the drainage area for analog horizontal Codell Formation wells are estimated at 101 acres and Niobrara Formation wells are estimated at 39 acres, and an approximate 1,120-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by horizontal wells producing oil, gas and associated hydrocarbons from the Codell and Niobrara Formations. Said testimony by Christopher Lee also showed that with the productive interval of the wellbore should 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 which is in conformity with Commission Rule 318A.e.
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. Noble 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 an approximate 1120-acre drilling and spacing unit for Sections 7 and 18, Township 6 North, Range 65 West, 6th P.M. and Sections 12 and 13, Township 6 North, Range 66 West, 6th P.M., and to approve up to nine horizontal wells within the unit, with the wells to be drilled from no more than two well pads without exception being granted by the Director, for the production of oil, gas and associated hydrocarbons from the Codell and 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. Provided, however, that the wells listed in the chart above should remain subject to the currently applicable Commission approved drilling and spacing units and shall not become subject to the proposed 1,120-acre drilling and spacing unit.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 1120-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to nine horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formation:
Township 6 North, Range 65 West, 6th P.M.
Section 7: SW¼NE¼, S½NW¼, SW¼, W½SE¼
Section 18: N½NW¼, NW¼NE¼
Township 6 North, Range 66 West, 6th P.M.
Section 12: S½N½, S½
Section 13: N½N½
2. The wells listed below that may be producing from the lands included in the said 1,120–acre drilling and spacing unit will remain subject to the currently applicable Commission approved drilling and spacing units for said wells and shall not become subject to the said 1,120-acre drilling and spacing unit:
|
Name |
API No. |
Operator |
Formation |
|
Bailey Federal 1 |
05-123-10934 |
Noble Energy, Inc. |
Codell-Niobrara |
|
Fagerberg 12-10G6 |
05-123-18543 |
Noble Energy, Inc. |
Codell |
|
Ottoson I 12-25 |
05-12329233 |
Noble Energy, Inc. |
Codell |
|
Ottoson I 12-12 |
05-123-29234 |
Noble Energy, Inc. |
Codell |
|
Southard I 12-06 |
05-123-29231 |
Noble Energy, Inc. |
Codell |
|
Ottoson 12-14G6 |
05-123-18233 |
Noble Energy, Inc. |
Codell-Niobrara |
|
Southard 2 |
05-123-12378 |
Noble Energy, Inc. |
Codell |
|
Farr 2 |
05-123-12141 |
Noble Energy, Inc. |
Codell |
|
Ottoson 3 |
05-123-12390 |
Noble Energy, Inc. |
Codell-Niobrara |
|
Moore 1 |
05-123-12379 |
Noble Energy, Inc. |
Codell |
|
Ottoson 1 |
05-123-12128 |
Noble Energy, Inc. |
Codell-Niobrara |
|
Haythorn 7-5G5 |
05-123-18114 |
Noble Energy, Inc. |
Codell |
|
Farr 4 |
05-123-12373 |
Noble Energy, Inc. |
Codell |
3. 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.
4. The proposed wells shall be drilled from no more than two wellpads within the unit, subject to Rule 318A, without exception being granted by the Director.
5. Noble shall submit a Communitization Agreement (“CA”) to the BLM for any existing wells that contain federal acreage within the existing unit within 60 days of the entry of the order. Noble shall submit a CA to the BLM within 90 days from the date of first production (as defined in the Commission Rules) from the initial horizontal well drilled within the drilling and spacing unit.
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