BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, ADAMS COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO 1406-UP-189

 

ORDER NO. 407-1309

 

TYPE: POOLING

           

REPORT OF THE COMMISSION

 

The Commission heard this matter on July 20, 2015, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to: 1) establish an approximate 640-acre drilling and spacing unit for Section 15, Township 1 South, Range 67 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations; 2) approve up to 12 horizontal wells within the unit; 3) pool all interests within the approximate 640-acre drilling and spacing unit, and subject any nonconsenting interests to the cost recovery provisions of §34-60-116(7), C.R.S. for the Todd Creek Farms #15-2-4HN well and the Todd Creek Farms #15-2-3HC well, for the development and operation of the Codell and Niobrara Formations.

 

FINDINGS

 

The Commission finds as follows:

 

1.            Ward Petroleum Corporation (“Ward” or the “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, 1988, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule. Section 15, Township 1 South, Range 67 West, 6th P.M. is subject to this Rule for the Codell and Niobrara Formations.

 

5.            On December 19, 1983 (amended March 29, 2000), the Commission entered Order No. 407-1 which, among other things, established 80-acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation underlying certain lands with the unit to be designated by the operator drilling the first well in the quarter section. 

 

6.            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 and/or gas from the Codell and Niobrara Formations underlying certain lands, with the permitted well locations in accordance with the provisions of Order No. 407-1. 

 

7.            On April 17, 2014, Ward, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: 1) establish an approximate 640-acre drilling and spacing unit for the below-described lands (“Application Lands”); 2) approve up to 12 horizontal wells 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 the unit, without exception being granted by the Director, and 3) to pool all interests within the approximate 640-acre drilling and spacing unit, and subject any nonconsenting interests to the cost recovery provisions of §34-60-116(7), C.R.S. for the Todd Creek Farms #15-2-4HN well and the Todd Creek Farms #15-2-3HC well, for the development and operation of the Codell and Niobrara Formations.:

Township 1 South, Range 67 West, 6th P.M.
Section 15:  All

 

8.            On June 2, 2014 (Amended August 29, 2014) Todd Creek Farms LLC (“TCF”) filed a protest to the Application alleging that there was a title dispute regarding ownership of the Application Lands in the District Court in Adams County and requested the Commission stay or deny the Application pending resolution of the dispute.

 

9.            The parties agreed to continue the matter until the title dispute was resolved.

 

10.          On June 12, 2014, Michael A. McKimmey and Stephanie S. McKimmey (“McKimmey”) filed a protest to the Application.

 

11.          On July 14, 2014, the McKimmeys withdrew their protest to the Application.

 

12.          On April 21, 2015, the parties agreed that TCF’s protest should be dismissed, the Commission should proceed to hear the spacing request of the Application, and the Commission dismiss the pooling request of this Application, without prejudice.  

 

13.          On May 15, 2015, Ward, by its attorneys, filed with the Commission a written request to approve the Application, based on its merits, as to the spacing and well density requests, and to withdraw the pooling request of its Application.  Sworn written testimony and exhibits were submitted in support of the Application.

 

14.          Land testimony and exhibits submitted in support of the Application by Kent Craig, Landman for Ward, showed that Ward holds oil and gas leasehold interests and has the right to drill in the Application Lands.  Further testimony showed that certain nearby lands have been spaced on 640-acre basis for production of oil, gas and associated hydrocarbons from horizontal wells to the Codell and Niobrara Formations.  

 

15.          Geology testimony and exhibits submitted in support of the Application by Jordan Revielle, Geologist for Ward, showed that the Codell and Niobrara Formations are present throughout the Application Lands, and the Niobrara Formation is approximately 380 to 410 feet thick, the Codell formation is approximately 19 to 20 feet thick, and both are generally of uniform thickness throughout the Application Lands.

 

16.          Engineering testimony and exhibits submitted in support of the Application by Mark Jopling, Vice-President of Operations for Ward, showed that the drainage area for analog Codell and Niobrara wells are estimated at 90 acres for the Codell and less than 20 acres for the Niobrara Formation, and an approximate 640-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 or Niobrara Formations.

 

17.          The above-referenced testimony and exhibits show that granting the Application as to its spacing and well density requests will allow more efficient reservoir drainage, prevent waste, assure a greater ultimate recovery of oil and gas, and will not violate correlative rights.

 

18.          Ward agreed to be bound by the oral order of the Commission. 

 

19.          Based on the facts stated in the verified Application, having received no unresolved protests, and based on the Hearing Officer review of the verified Application under Rule 511, the Commission should enter an order to establish an approximate 640-acre drilling and spacing unit for Section 15, Township 1 South, Range 67 West, 6th P.M., and approve up to 12 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.

 

ORDER

 

IT IS THEREFORED ORDERED:

 

1.            An approximate 640-acre drilling and spacing unit for the below described lands is hereby established, and up to 12 horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations:  

Township 1 South, Range 67 West, 6th P.M.
Section 15:  All

2.            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.

3.            The proposed wells will be located on no more than two well pads within the unit, subject to Rule 318A.

 

IT IS FURTHER ORDERED:

 

1.            The provisions contained in the above order shall become effective forthwith.

 

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 of 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 31st day of July, 2015, as of July 20, 2015.

 

 

OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

 

 

By: __________________________________

            Julie Murphy, Secretary