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. 150100046
ORDER NO. 407-1239 |
REPORT OF THE COMMISSION
The Commission heard this matter on March 2, 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 No. 407-779 for Section 23, Township 5 North, Range 62 West, 6th P.M., for the production of existing oil, gas and associated hydrocarbons from the Niobrara Formation; 2) vacate an approximate 640-acre drilling and spacing unit established by Order No. 407-779 for Section 22, Township 5 North, Range 62 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; 3) establish an approximate 1280-acre drilling and spacing unit for the Application Lands, and approve up to 16 horizontal wells for the Niobrara Formation within the unit 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 Application Lands, and approve up to four horizontal wells for the Codell Formation 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) (“Bill Barrett” 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 22, 2011, the Commission entered Order Nos. 407-779 and 535-4 (corrected on April 4, 2013) 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. Sections 22 and 23, Township 5 North, Range 62 West, 6th P.M. are subject to this Order for the Niobrara Formation.
6. On September 19, 2011, the Commission entered Order No. 407-479 which approved an additional horizontal well, for a total of two horizontal wells, within the unit established for Section 22, Township 5 North, Range 62 West, 6th P.M.
7. On November 17, 2014, Bill Barrett, 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 No. 407-779 for Section 23, Township 5 North, Range 62 West, 6th P.M., for the production of existing oil, gas and associated hydrocarbons from the Niobrara Formation; 2) vacate an approximate 640-acre drilling and spacing unit established by Order No. 407-779 for Section 22, Township 5 North, Range 62 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; 3) establish an approximate 1280-acre drilling and spacing unit for the Application Lands, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, and approve up to 16 horizontal wells for the Niobrara Formation within the unit; 4) 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 for the Codell Formation within the unit, 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 each unit, without exception being granted by the Director:
Township 5 North, Range 62 West, 6th P.M.
Section 22: All
Section 23: All
Applicant requests that the proposed wells be drilled from no more than five multi-well pads within the unit, subject to Rule 318A.
6. On February 9, 2015, Bill Barrett, 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.
7. Land testimony and exhibits submitted in support of the Application Colleen Kennedy, Land Manager for Bill Barrett, showed that Bill Barrett holds oil and gas leasehold interests and has a right to drill in the Application Lands.
8. Geologic testimony and exhibits submitted in support of the Application by Blaine Martin, Geologist for BBC, showed that the thickness of the Niobrara Formation underlying the Application Lands ranges from approximately 258 to 260 feet thick, and the thickness of the Codell Formation underlying the Application Lands is approximately 7.5 to 8.5 feet thick. Further testimony showed that the Niobrara Formation is a sequence of chalks, marls and limestones and is a common source of supply, while the Codell Formation is a very fine sandstone/siltstone and is also a common source of supply.
9. Engineering testimony and exhibits submitted in support of the Application by Anna Young, Manager of Engineering for Bill Barrett, showed that the average calculated drainage area for analog horizontal Codell and Niobrara Formation wells with laterals between 1 to 2 miles is estimated at 79 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 a horizontal well producing oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
10. 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.
11. Bill Barrett agreed to be bound by oral order of the Commission.
12. 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 No. 407-779 for Section 23, Township 5 North, Range 62 West, 6th P.M., for the production of existing oil, gas and associated hydrocarbons from the Niobrara Formation; 2) vacate an approximate 640-acre drilling and spacing unit established by Order No. 407-779 for Section 22, Township 5 North, Range 62 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; 3) establish an approximate 1280-acre drilling and spacing unit for the Application Lands, and approve up to 16 horizontal wells for the Niobrara Formation within the unit 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 Application Lands, and approve up to four horizontal wells for the Codell Formation within the unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit established by Order No. 407-779 for Section 23, Township 5 North, Range 62 West, 6th P.M., is hereby maintained, for the production of existing oil, gas and associated hydrocarbons from the Niobrara Formation;
2. An approximate 640-acre drilling and spacing unit established by Order No. 407-779 for Section 22, Township 5 North, Range 62 West, 6th P.M., is hereby vacated, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation;
3. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and up to 16 horizontal wells for the Niobrara Formation 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 22: All
Section 23: All
4. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and up to four horizontal wells for the Codell Formation 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 22: All
Section 23: All
5. 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 each unit, without exception being granted by the Director
6. The proposed wells shall be drilled from no more than five multi-well pads within the 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 16th day of March, 2015, as of March 2, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Jill Dorancy, Acting Secretary