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 NIOBRARA FORMATION WATTENBERG FIELD, WELD COUNTY,      COLORADO

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CAUSE NO. 407

 

DOCKET NO. 150900538

 

ORDER NO. 407-1448

 

TYPE: POOLING

REPORT OF THE COMMISSION

 

The Commission heard this matter on September 14, 2015, at the Western State Colorado University, University Center, South Ballroom, 600 North Adams Street, Gunnison, Colorado, upon application for an order to make Order No. 407-1367, which pooled all interests in an approximate 320-acre designated horizontal wellbore spacing unit established for portions of Section 18, Township 4 North, Range 67 West, 6th P.M., and subjected all nonconsenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., for the drilling of the Rieder #18T-321 Well, for the development and operation of the Niobrara Formation, applicable to previously unnoticed parties.

 

FINDINGS

 

The Commission finds as follows:

 

1.         PDC Energy, Inc. (Operator No. 69175) (“PDC” 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.   Section 18, Township 4 North, Range 67 West, 6th P.M. is subject to this Rule for the Niobrara Formation.

 

5.         On July 20, 2015, the Commission entered Order No. 407-1367, which pooled all interests in the designated horizontal wellbore spacing unit for the E½ of Section 18, Township 4 North, Range 67 West, 6th P.M., and subjected any owners with whom the Applicant has been unable to secure a lease or other agreement to participate in the drilling of the Rieder #18T-321 Well to the cost recovery provisions of §34-60-116(7), C.R.S., effective as of the earlier of the date of the Application, or the date the costs specified in §34-60-116(7)(b), C.R.S., are first incurred for the drilling of the Rieder #18T-321 Well, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.

 

  6.       On July 16, 2015, PDC, by its attorneys, filed a verified Application (“Application”) pursuant to §34-60-116, C.R.S., for an order to make Order No. 407-1367, which pooled all interests in an approximate 320-acre designated horizontal wellbore spacing unit established for the below-described lands (“Application Lands”), for the development and operation of the Niobrara Formation, and to subjected any nonconsenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., for the drilling of the Rieder #18T-321 Well (API No. 05-123-40565) (“Well”) applicable to previously unnoticed interest owners:

Township 4 North, Range 67 West, 6th P.M.

Section 18:      E½

 

7.         On August 24, 2015, Applicant, 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.

 

8.         Land testimony and exhibits submitted in support of the Application by Joshua B. Wagner, Senior Regional Landman for PDC, showed that Kent T. Bowden, a previously unnoticed interest owner, was notified of the Application.

                                                 

9.         Applicant confirmed that Commission Rules 530.b. and c. do not apply to Kent T. Bowden as he has agreed to participate in the Well, and Applicant is not seeking cost recovery from Kent T. Bowden pursuant to §34-60-116(7), C.R.S.

 

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.       PDC 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 make Order No. 407-1367, except for the cost recovery provisions, applicable to Kent T. Bowden, a previously unnoticed interest owner, for the drilling of the Rieder #18T-321 Well, for the development and operation of the Niobrara Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, Order No. 407-1367, except for the cost recovery provisions, is hereby made applicable to Kent T. Bowden, and his interest in an approximate 320-acre designated horizontal wellbore spacing unit established for the below-described lands is hereby pooled, for the development and operation of the Niobrara Formation, effective as of the earlier of the date of the Application, or the date that any of the costs specified in §34-60-116(7)(b)(II), C.R.S., are first incurred for the drilling of the Rieder #18T-321 Well (API No. 05-123-40565):

 

Township 4 North, Range 67 West, 6th P.M.

Section 18:      E½

 

2.         The production obtained from the designated horizontal wellbore spacing unit shall be allocated to each owner in the unit on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within the designated horizontal wellbore spacing unit; each owner of an interest in the designated horizontal wellbore spacing unit shall be entitled to receive its share of the production of the Well located on the designated horizontal wellbore spacing unit applicable to its interest in the designated horizontal wellbore spacing unit.

 

3.         Nothing in this order is intended to conflict with §34-60-116, C.R.S., as amended.  Any conflict that may arise shall be resolved in favor of the statute.

 

4.         The designated horizontal wellbore spacing unit described above shall be considered a drilling and spacing unit established by the Commission for purposes of Rule 530.a.

 

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 18th day of September, 2015, as of September 14, 2015.

           

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By____________________________________

Julie Murphy, Secretary