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 NIOBRARA AND CODELL FORMATIONS, WATTENBERG AND EATON FIELDS, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 160400177
TYPE: ADDITIONAL WELLS
ORDER NO. 407-1685 |
REPORT OF THE COMMISSION
The Commission heard this matter on April 18, 2016, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to approve a total of up to 15 horizontal wells within an approximate 1,120-acre drilling and spacing unit established by Order No. 407-1212 for Sections 7 and 18, Township 6 North, Range 65 West, 6th P.M. and Sections 12 and 13, Township 6 North, Range 66 West, 6th P.M., for the production of the oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.
FINDINGS
The Commission finds as follows:
1. Synergy Resources Corporation (Operator No. 10311) (“Synergy” 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 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 Formations, the Codell Formation, and the Niobrara Formation underlying certain lands, with the permitted well locations in accordance with the provisions of Order No. 407-1. Sections 7 and 18, Township 6 North, Range 65 West, 6th P.M. and Sections 12 and 13, Township 6 North, Range 66 West, 6th P.M., are subject to this Order for the production of the oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.
5. On January 26, 2015, the Commission entered Order No. 407-1212 which, among other things, established an approximate 1,120-acre drilling and spacing unit for Sections 7 and 18, Township 6 North, Range 65 West, 6th P.M. and Sections 12 and 13, Township 6 North, Range 66 West, 6th P.M., and authorized a total of up to nine horizontal wells within the unit for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations, with the productive interval of any horizontal wellbore 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, unless the Director grants an exception.
Township 6 North, Range 65 West, 6th P.M.
Section 7: SW¼NE¼, S½NW¼, SW¼, W½SE¼
Section 18: N½NW¼, NW¼NE¼
Township 6 North, Range 66 West, 6th P.M.
Section 12: S½N½, S½
Section 13: N½N½
7. On March 30, 2016, supplemented on April 6, 2016, Synergy, 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 David Baumbach, Senior Landman for Synergy, showed that Synergy holds oil and gas leasehold interests and has a right to drill in the Application Lands.
9. Geoscience testimony and exhibits submitted in support of the Application by Thomas Birmingham, Vice President, Exploration for Synergy, showed the Niobrara Formation is present throughout the Application Lands, is approximately 277 to 300 feet thick, and is generally of uniform thickness throughout the Application Lands. Further testimony showed that the Niobrara Formation is a sequence of chalks and marlstones and is a common source of supply. Geologic testimony also showed that the Codell Formation is present throughout the Application Lands, is approximately 20 to 22 feet thick, and is generally of uniform thickness throughout the Application Lands. Further testimony showed that the Codell Formation is a relatively shallow marine sandstone and is a common source of supply.
10. Engineering testimony and exhibits submitted in support of the Application by Brett Hall, Reservoir Engineer for Synergy, showed that Synergy is planning to drill 10 horizontal wells in the Niobrara Formation and four horizontal wells in the Codell Formation. Engineering testimony further showed that the drainage area for analog horizontal Niobrara Formation wells is estimated at 43 acres, the drainage area for analog horizontal Codell Formation wells is estimated at 94 acres, and an approximate 1,120-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by 10 horizontal wells producing oil, gas and associated hydrocarbons from the Niobrara Formation and four horizontal wells producing oil, gas and associated hydrocarbons from the Codell Formation.
11. Applicant states that any horizontal wells to be drilled under this Application will be drilled from no more than two multi-well pads, unless the Director grants an exception.
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. Synergy 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 approve a total of up to 10 horizontal wells for the production of the oil, gas, and associated hydrocarbons from the Niobrara and up to four horizontal wells for the production of the oil, gas, and associated hydrocarbons from the Codell Formation within an approximate 1,120-acre drilling and spacing unit established by Order No. 407-1212 for Sections 7 and 18, Township 6 North, Range 65 West, 6th P.M. and Sections 12 and 13, Township 6 North, Range 66 West, 6th P.M., and.
ORDER
IT IS HEREBY ORDERED:
1. A total of up to 10 horizontal wells within an approximate 1,120-acre drilling and spacing unit established by Order No. 407-1212 for the below described lands are hereby approved for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, and a total of up to four horizontal wells within an approximate 1,120-acre drilling and spacing unit established by Order No. 407-1212 for the below described lands are hereby approved for the production of oil, gas and associated hydrocarbons from the Codell Formation:
Township 6 North, Range 65 West, 6th P.M.
Section 7: SW¼NE¼, S½NW¼, SW¼, W½SE¼
Section 18: N½NW¼, NW¼NE¼
Township 6 North, Range 66 West, 6th P.M.
Section 12: S½N½, S½
Section 13: N½N½
2. The productive interval of any horizontal wellbore shall 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, unless the Director grants an exception.
3. All wells permitted under this Order shall be drilled from no more than two multi-well pads within the Application Lands, unless the Director grants an exception.
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 29th day of April, 2016, effective as of April 18, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Julie Murphy, Secretary