BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE APPLICATION OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 160400184
TYPE: POOLING
ORDER NO. 407-1689
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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 pool all interests in two approximate 466.265-acre designated horizontal wellbore spacing units, and to subject any non-consenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., for the drilling of the Tarin Federal 32Y-404 Well and the Tarin Federal 32Y-314 Well, for the development and operation of the Codell and Niobrara Formations.
FINDINGS
The Commission finds as follows:
1. PDC Energy, Inc. (“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. Sections 31 and 32, Township 4 North, Range 66 West, 6th P.M. and Sections 5 and 6, Township 3 North, Range 66 West, 6th P.M. are subject to this Rule for the Codell and Niobrara Formations.
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, Sections 31 and 32, Township 4 North, Range 66 West, 6th P.M. and Sections 5 and 6, Township 3 North, Range 66 West, 6th P.M, with the permitted well locations in accordance with the provisions of Order 407-1.
6. On February 18, 2016, PDC, by its attorney, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to pool all interests in two approximate 466.265-acre designated horizontal wellbore spacing units, for the development and operation of the Codell and Niobrara Formations, and to subject any non-consenting interests 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 that any of the costs specified in §34-60-116(7)(b), C.R.S., were first incurred for the drilling of the Tarin Federal 32Y-404 Well (API No. 05-123-40091), and the Tarin Federal 32Y-314 Well (API No. 05-123-40094) (“Wells”):
Township 4 North, Range 66 West, 6th P.M.
Section 31: S½SE¼
Section 32: S½S½
Township 3 North, Range 66 West, 6th P.M.
Section 5: N½N½
Section 6: N½NE¼
Wellbore Spacing Unit (“WSU”) Nos. 1 and 2
Tarin
Federal 32Y-404 Well (Codell Formation)
Tarin
Federal 32Y-314 Well (Niobrara Formation)
7. On March 28, 2016, PDC, 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 Josh Wagner, Senior Regional Landman for PDC, showed that Applicant has been unable to effect the voluntary pooling of certain interests for the units established for the Application Lands.
9. Land testimony showed the Applicant states that Rule 530 does not apply to the owners as PDC is not seeking cost recovery penalties in the Application pursuant to §34-60-116(7), C.R.S., for the Tarin Federal 32Y-404 Well and the Tarin Federal 32Y-314 Well.
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’s review of the Application under Rule 511, the Commission should enter an order to pool all interests in two approximate 466.265-acre designated horizontal wellbore spacing units, and to subject any non-consenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., for the drilling of the Tarin Federal 32Y-404 Well and the Tarin Federal 32Y-314 Well, for the development and operation of the Codell and Niobrara Formations.
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, all interests in two approximate 466.265-acre designated horizontal wellbore spacing units established for the below-described lands are hereby pooled, for the development and operation of the Codell and Niobrara Formations, effective as of the earlier of the date of the Application, for the drilling of the Tarin Federal 32Y-404 Well (API No. 05-123-40091), and the Tarin Federal 32Y-314 Well (API No. 05-123-40094)(“Wells”):
Township 4 North, Range 66 West, 6th P.M.
Section 31: S½SE¼
Section 32: S½S½
Township 3 North, Range 66 West, 6th P.M.
Section 5: N½N½
Section 6: N½NE¼
Wellbore Spacing Unit (“WSU”) Nos. 1 and 2
Tarin
Federal 32Y-404 Well (Codell Formation)
Tarin
Federal 32Y-314 Well (Niobrara Formation)
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 Wells 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 3rd day of May, 2016, as of April 18, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By:
Julie Murphy, Secretary