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-NIOBRARA FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 150300128
ORDER NO: 407-1307 |
REPORT OF THE COMMISSION
The Commission heard this matter on May 18, 2015, at Aims Community College, 260 College Avenue, Fort Lupton, Colorado, upon application for an order to: 1) amend Order No. 407-741 to authorize no more than one horizontal well within the approximate 640-acre drilling and spacing unit established by such order, for the development and operation of the Codell-Niobrara Formation, 2) establish an approximate 1,120-acre drilling and spacing unit, and 3) approve up to 21 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Great Western Operating Company, LLC (“Great Western” or “Applicant”), as applicant herein, 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, the Commission entered Order No. 407-87 (amended August 20, 1993) which, among other things, established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation underlying certain lands, including the Application Lands, with the permitted well locations in accordance with the provisions of Order No. 407-1.
6. On January 7, 2013, the Commission entered Order No. 407-741 which: 1) vacated the approximate 80-acre drilling and spacing units established by Order No. 407-87 for Section 16, Township 6 North, Range 67 West, 6th P.M.; 2) established an approximate 640-acre drilling and spacing unit consisting of Section 16, Township 6 North, Range 67 West, 6th P.M., and 3) approved up to seven horizontal wells within each unit, for the development and operation of the Codell-Niobrara Formation, with the productive interval of the horizontal wellbores to be 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. On July 29, 2013, the Commission entered Order No. 407-848, which pooled all interests in the approximate 640-acre drilling and spacing unit established by Order No. 407-741 for Section 16, Township 6 North, Range 67 West, 6th P.M., for the development and operation of the Codell-Niobrara Formation.
8. On September 15, 2014, the Commission entered Order No. 407-1107, which applied the cost recovery provisions of C.R.S. § 34-60-116(7) to any non-consenting owners within the approximate 640-acre drilling and spacing unit established by Order No. 407-741 for Section 16, Township 6 North, Range 67 West, 6th P.M. for the DeTienne FD 16-022HC Well (API No. 05-123-39630).
9. The Application Lands are the subject of a concurrently filed application pending before the Commission and set for hearing at the Commission’s May, 2015 hearing, to pool all interests within the proposed approximate 1,120-acre drilling and spacing unit.
10. On December 22, 2014 (Amended April 10, 2015), Great Western, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”), for an order to: 1) amend Order No. 407-741 to authorize no more than one horizontal well within the approximate 640-acre drilling and spacing unit established by such order, for the development and operation of the Codell-Niobrara Formation, 2) establish an approximate 1,120-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to 21 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara 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 horizontal wellbore located within the unit, without exception being granted by the Director.
Township 6 North, Range 67 West, 6th P.M.
Section 15: W½, NE¼
Section 16: All
11. On April 27, 2015, Great Western, 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.
12. Land testimony and exhibits submitted in support of the Application by Hal Writer, Land Manager for Great Western, showed that both the mineral and surface interests are owned in fee, and that Great Western owns a partial leasehold/mineral ownership interest in the Application Lands.
13. Geoscience testimony and exhibits submitted in support of the Application by Willis Wilcoxon, Geologist for Great Western, showed the Codell Formation is present throughout the Application Lands, is approximately 23-28 feet thick, and is generally of uniform thickness throughout the Application Lands. He also showed that the Niobrara Formation is present throughout the Application Lands, is approximately 265-320 feet thick, and is generally of uniform thickness throughout the Application Lands.
14. Engineering testimony and exhibits submitted in support of the Application by Sam Bradley, Petroleum Engineer for Great Western, showed that the proposed wells would increase the recovery factor to approximately 10.7% for the unit, and that the proposed 1120-acre drilling and spacing unit, with the requested setbacks, for the horizontal wells in the Codell-Niobrara Formation in the Application Lands, will promote efficient drainage, protect correlative rights, and prevent waste.
15. 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.
16. Great Western agreed to be bound by oral order of the Commission.
17. 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) amend Order No. 407-741 to authorize no more than one horizontal well within the approximate 640-acre drilling and spacing unit established by such order, for the development and operation of the Codell-Niobrara Formation, 2) establish an approximate 1,120-acre drilling and spacing unit, and 3) approve up to 21 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. Order No. 407-741 is amended to authorize no more than one horizontal well within the approximate 640-acre drilling and spacing unit established by such order, for the development and operation of the Codell-Niobrara Formation.
2) An approximate 1,120-acre drilling and spacing unit is hereby established for the below-described lands, and a total of up to 21 horizontal wells, are hereby approved, within the unit, for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation:
Township 6 North, Range 67 West, 6th P.M.
Section 15: W½, NE¼
Section 16: All
3) The productive interval of the horizontal wellbores shall be no closer than 460 feet from the unit boundaries, without exception being granted by the Director, 5) the treated interval of any horizontal wellbore permitted to a specific formation shall be no closer than 150 feet to the treated interval of any other vertical, directional or horizontal wellbore in the unit that is permitted to the same formation, 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 2nd day of June, 2015, as of May 18, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Julie Murphy, Secretary