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-NIOBRARA FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 151200714

 

TYPE: POOLING

 

ORDER NO. 407-1560

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on December 8, 2015, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to pool all interests in an approximate 160-acre designated wellbore spacing unit established for portions of Sections 20 and 29, Township 6 North, Range 67 West, 6th P.M., for the drilling of the H-Y 29-21-3 Well, for the development and operation of 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 (amended August 20, 1993), the Commission entered Order No. 407-87 which, among other things, established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formations, the Codell Formation, and the 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 October 8, 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 pool all interests, in an approximate 160-acre wellbore spacing unit established for the below-described lands (“Application Lands”), for the development and operation of the Codell-Niobrara Formation, effective as of the earlier of the date of the Application or the date that the costs specified in §34-60-116(7)(b), C.R.S., are first incurred for the drilling of the H-Y 29-21-3 Well (API No. 05-123-35426) (“Well”):

 

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

Section 29:      NE¼NW¼, NW¼NE¼

Section 20:      SE¼SW¼, SW¼SE¼

 

7.         On November 13, 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.

 

8.         Land testimony and exhibits submitted in support of the Application by Hal Writer, Land Manager for Great Western, showed that Applicant has been unable to effect voluntary pooling of interests within the drilling and spacing unit established for the Application Lands, and that based upon examination of relevant contracts and records, all owners of an oil and gas interest in the tracts to be pooled received timely notice of the Application.

 

9.         Applicant confirmed that Commission Rule 530.b. and c. do not apply as there are no working interest owners or unleased mineral interest owners subject to the Application and Applicant is not seeking cost recovery 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.       Great Western 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 pool all interests in an approximate 160-acre designated wellbore spacing unit established for portions of Sections 20 and 29, Township 6 North, Range 67 West, 6th P.M., for the drilling of the H-Y 29-21-3 Well, for the development and operation of the Codell-Niobrara Formation.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that:

 

1.         Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, all interests in an approximate 160-acre wellbore spacing unit established for the below-described lands are hereby pooled, for the development and operation of the Codell-Niobrara Formation, effective as of the earlier of the date of the Application or the date that the costs specified in §34-60-116(7)(b), C.R.S., are first incurred for the drilling of the H-Y 29-21-3 Well (API No. 05-123-35426) (“Well”):

 

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

Section 29:      NE¼NW¼, NW¼NE¼

Section 20:      SE¼SW¼, SW¼SE¼

 

2.         The production obtained from the 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 wellbore spacing unit; each owner of an interest in the wellbore spacing unit shall be entitled to receive its share of the production of the Well located on the wellbore spacing unit applicable to its interest in the 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.         Any 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 16th day of December, 2015, as of December 8, 2015.       

                                                                             

 

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By__________________________________

Julie Murphy, Secretary