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. 150100044
ORDER NO. 407-1216 |
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: (1) maintain two approximate 640-acre drilling and spacing units established for Sections 27 and 34, Township 5 North, Range 62 West, 6th P.M., for existing oil, gas and associated hydrocarbons produced from the Niobrara Formation; (2) establish an approximate 1,280-acre drilling and spacing unit for Sections 27 and 34, Township 5 North, Range 62 West, 6th P.M. and approve up to 16 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and (3) establish an approximate 1,280-acre drilling and spacing unit for Sections 27 and 34, Township 5 North, Range 62 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 Formation.
FINDINGS
The Commission finds as follows:
1. Bill Barrett Corporation (Operator No. 10071) (“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. On April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule. Sections 27 and 34, Township 5 North, Range 62 West, 6th P.M. are subject to this Rule for the Codell and Niobrara Formations.
5. On February 22, 2011 (corrected on April 4, 2013), the Commission entered Order Nos. 407-779 and 535-4 which established 74 approximate 640-acre drilling and spacing units for Townships 4, 5, and 6 North, Ranges 61 and 62, 6th P.M., and approved one horizontal well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
6. On November 17, 2014, BBC, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: (1) maintain the approximate 640-acre drilling and spacing units established for Sections 27 and 34, Township 5 North, Range 62 West, 6th P.M., for existing oil, gas and associated hydrocarbons produced from the Niobrara Formation; (2) establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”) and approve up to 16 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and (3) establish an approximate 1,280-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 Formation; (5) 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 5 North, Range 62 West, 6th P.M.
Section 27: All
Section 34: All
7. Applicant states that the proposed wells shall be drilled on no more than five multi-well pads within the unit, subject to Rule 318A.
8. On January 5, 2015, 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.
8. On January 7, 2015, the Bureau of Land Management (“BLM”) and BBC reached an agreement wherein BBC agreed to submit a Communitization Agreement (CA) to the BLM for any existing wells within 60 days of the entry of this order. BBC also agreed to submit a CA to the BLM within 90 days of the date of first production (as defined by in the COGCC Rules) from the initial well within the drilling and spacing unit. The Application Lands contain leased minerals managed by BLM.
9. Land testimony and exhibits submitted in support of the Application by Colleen 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 Scott J. Hampton, Geologist for BBC, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 258 feet thick, and is generally of uniform thickness throughout the Application Lands, and that the Codell Formation is present throughout the Application Lands, is approximately 8 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 Codell and Niobrara Formation wells are estimated at 79 acres, and an appropriate 1280-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 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. Bill Barrett 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 two approximate 640-acre drilling and spacing units established for Sections 27 and 34, Township 5 North, Range 62 West, 6th P.M., for existing oil, gas and associated hydrocarbons produced from the Niobrara Formation; (2) establish an approximate 1,280-acre drilling and spacing unit for Sections 27 and 34, Township 5 North, Range 62 West, 6th P.M. and approve up to 16 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and (3) establish an approximate 1,280-acre drilling and spacing unit for Sections 27 and 34, Township 5 North, Range 62 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 Formation.
ORDER
IT IS HEREBY ORDERED:
1. The approximate 640-acre drilling and spacing units established for Sections 27 and 34, Township 5 North, Range 62 West, 6th P.M., are hereby maintained, for existing oil, gas and associated hydrocarbons produced from the Niobrara Formation.
2. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 16 horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 5 North, Range 62 West, 6th P.M.
Section 27: All
Section 34: All
3. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 4 horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation:
Township 5 North, Range 62 West, 6th P.M.
Section 27: All
Section 34: All
4. 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.
5. The horizontal wells shall be drilled from no more than five multi-well pads subject to Rule 318A, without exception being granted by the Director.
6. BBC shall submit a Communitization Agreement (CA) to the BLM for any existing wells within 60 days of the entry of this order. BBC shall also submit a CA to the BLM within 90 days of the date of first production (as defined by in the COGCC Rules) from the initial well 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