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. 150100048
ORDER NO. 407-1219 |
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 an approximate 640-acre drilling and spacing unit established by Order Nos. 407-779 and 535-4 for Section 3, Township 6 North, Range 62 West, 6th P.M., for the production of existing oil, gas and associated hydrocarbons from the Niobrara Formation; 2) vacate Order No. 407-878, 3) vacate an approximate 1280-acre drilling and spacing unit established by Order No. 407-900 for Sections 1 and 2, Township 6 North, Range 62 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, 4) establish an approximate 1280-acre drilling and spacing unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation and 5) establish an approximate 1280-acre drilling and spacing unit for Sections 2 and 3, Township 6 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 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 2 and 3, Township 6 North, Range 62 West, 6th P.M., are subject to this Rule, for the production of oil, gas, and associated hydrocarbons from 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 October 28, 2013, the Commission entered Order No. 407-878 which approved an additional seven horizontal wells for a total of eight horizontal wells, within an approximate 640-acre drilling and spacing unit established for Section 3, Township 6 North, Range 62 West, 6th P.M. and established an approximate 640-acre drilling and spacing unit for Section 3, Township 6 North, Range 62 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Codell Formation;
7. On December 16, 2013, the Commission entered Order No. 407-900 which established an approximate 1280-acre drilling and spacing unit for Section 1 and 2, Township 6 North Range 62 West, 6th P.M., and approving up to sixteen horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation, and approved up to four horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation.
8. 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 an approximate 640-acre drilling and spacing unit established by Order Nos. 407-779 and 535-4 for Section 3, Township 6 North, Range 62 West, 6th P.M., for the production of existing oil, gas and associated hydrocarbons from the Niobrara Formation; 2) vacate Order No. 407-878; 3) vacate an approximate 1280-acre drilling and spacing unit established by Order No. 407-900 for Sections 1 and 2, Township 6 North, Range 62 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations; 4) establish an approximate 1280-acre drilling and spacing unit for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, and approve up to 16 horizontal wells within the unit; 5) establish an approximate 1280-acre drilling and spacing unit for the Application Lands, for the production of oil, gas and associated hydrocarbons from the Codell Formation and approve up to four horizontal wells within the unit; and 6) require 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 each unit; and
Township 6 North, Range 62 West, 6th P.M.
Section 2: All
Section 3: All
9. BBC requests that the proposed wells be drilled from no more than five multi-well pads within the unit, subject to Rule 318A.
10. 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.
11. 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.
12. Geologic testimony and exhibits submitted in support of the Application by Blaine Martin, Geologist for BBC, showed that the Codell and Niobrara Formations are present throughout the Application Lands, the Niobrara Formation is approximately 262 to 264 feet thick, and the Codell Formation is approximately 8 feet thick, and are generally of uniform thickness throughout the Application Lands.
13. 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 79 acres, the drainage area for analog horizontal Codell Formation wells are estimated at 207 acres, and an approximate 1280-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by the proposed horizontal wells producing oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
14. 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.
15. BBC agreed to be bound by oral order of the Commission.
16. 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 an approximate 640-acre drilling and spacing unit established by Order Nos. 407-779 and 535-4 for Section 3, Township 6 North, Range 62 West, 6th P.M., for the production of existing oil, gas and associated hydrocarbons from the Niobrara Formation; 2) vacate Order No. 407-878, 3) vacate an approximate 1280-acre drilling and spacing unit established by Order No. 407-900 for Sections 1 and 2, Township 6 North, Range 62 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, 4) establish an approximate 1280-acre drilling and spacing unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation and 5) establish an approximate 1280-acre drilling and spacing unit for Sections 2 and 3, Township 6 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 Codell Formation.
ORDER
IT IS HEREBY ORDERED:
1. The approximate 640-acre drilling and spacing unit established for Section 3, Township 6 North, Range 62 West, 6th P.M., is hereby maintained, for the existing oil, gas and associated hydrocarbons produced from the Niobrara Formation.
2. An approximate 1,280-acre drilling and spacing unit established by Order No. 407-900 for Sections 1 and 2, Township 6 North, Range 62 West, 6th P.M., is hereby vacated, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
3. Order No. 407-878 is vacated.
4. 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 6 North, Range 62 West, 6th P.M.
Section 2: All
Section 3: All
5. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to four horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation:
Township 6 North, Range 62 West, 6th P.M.
Section 2: All
Section 3: All
6. 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.
7. The proposed wells shall be drilled from no more than five multi-well pads within the unit, subject to Rule 318A, 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 _____ day of February, 2015, as of January 26, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Jill Dorancy, Acting Secretary