BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
|
IN THE MATTER OF PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE CODELL AND NIOBRARA FORMATIONS, WELD COUNTY, COLORADO |
) ) ) ) )
|
CAUSE NO. 407
DOCKET NO. 150300110
ORDER 407-1265 |
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 modify Order No. 407-468 and allow 460-foot setbacks as to the unit boundaries of Section 8, Township 1 North, Range 64 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Verdad Oil & Gas Corporation (Operator No. 10485) (“Verdad” 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 which established 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. Section 8, Township 1 North, Range 64 West, 6th P.M., is subject to this Order for the Niobrara Formation.
6. On August 8, 2011, the Commission entered Order No. 407-468, which among other things, established an approximate 640-acre drilling and spacing unit for Section 8, Township 1 North, Range 64 West, 6th P.M., and approve one horizontal well within the unit, for the production of oil and gas, and associated hydrocarbons from the Niobrara Formation, with the productive interval of the wellbore to be located no closer than 600 foot setbacks from the unit boundary. Section 8, Township 1 North, Range 64 West, 6th P.M., is subject to this Order for the Niobrara Formation.
7. On December 22, 2014, Verdad, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S., for an order modifying Order No. 407-468 to allow 460 foot setbacks as to the unit boundaries in order for the production of oil, gas and associated hydrocarbons from the Niobrara Formation underlying the below-described lands, (“Application Lands”).
Township 1 North, Range 64 West, 6th P.M.
Section 8: All
8. On February 9, 2015, Verdad, 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.
9. Land testimony and exhibits submitted in support of the Application by Philip W. Davis, Landman for Verdad, showed that Verdad 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 Steven M. Goolsby, Senior Exploration Geologist for Foreland Resources, which is an affiliate of Verdad, showed the Niobrara Formation is present throughout the Application Lands, is approximately 324 to 365 feet thick, and is generally of uniform thickness throughout the Application Lands.
11. Engineering testimony and exhibits submitted in support of the Application by L. Arthur Beecherl, Vice-President of Operations for Verdad, demonstrated that the estimated drainage area of analog horizontal wells in the Niobrara Formation is 53 acres, and that the requested setbacks of 460 feet from the unit boundaries of the Application Lands will promote efficient drainage, protect correlative rights, and prevent waste.
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. Verdad 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 modify Order No. 407-468 and allow 460-foot setbacks as to the unit boundaries of Section 8, Township 1 North, Range 64 West, 6th P.M., for the production of the oil, gas, and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. Order No. 407-468, is hereby modified, to allow for 460-foot setbacks as to the unit boundaries of the below-described lands, for the production of the oil, gas, and associated hydrocarbons from the Niobrara Formation:
Township 1 North, Range 64 West, 6th P.M.
Section 8: All
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 30 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 18th day of March, 2015, as of March 2, 2015.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By: ____________________________________
Jill Dorancy, Acting Secretary