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, WELD COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 160700298

 

TYPE:  SPACING

 

ORDER NO. 407-1758

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on July 19, 2016, at the Glenwood Springs Community Center, 100 Wulfsohn Road, Sopris Rooms A & B, Glenwood Springs, Colorado, upon application for an order to establish an approximate 640-acre drilling and spacing unit for Sections 30 and 31, Township 1 North, Range 65 West, 6th P.M., and approve up to six horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations.

 

FINDINGS

 

The Commission finds as follows:

 

1.         HRM Resources II, LLC (Operator No. 10548) (“HRM” or “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, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule.   Sections 30 and 31, Township 1 North, Range 65 West, 6th P.M., are subject to this Rule for the Codell and Niobrara Formations.

 

8.         On May 19, 2016, HRM, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 640-acre drilling and spacing unit for the below described lands (“Application Lands”), and authorizing the drilling of up to six horizontal wells within the proposed unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the treated intervals of any horizontal well permitted under this Application located not less than 460 feet from the outer unit boundaries and not less than 150 feet from any other well producing or drilled from the Codell and Niobrara Formations, without exception being granted by the Director:

 

Township 1 North, Range 65 West, 6th P.M.
Section 30:      E˝

Section 31:      E˝

 

9.         On June 27, 2016, HRM, 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.

 

            10.       Land testimony and exhibits submitted in support of the Application by Janet Paul, Landman for HRM, showed that HRM holds oil and gas leasehold interests and has a right to drill in the Application Lands.

 

11.       Geologic testimony and exhibits submitted in support of the Application by Alicia Branch, Geologist for HRM, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 380 to 410 feet thick, and is generally of uniform thickness throughout the Application Lands.  The geologic testimony further showed that the Codell Formation is present throughout the Application Lands, is approximately 15 to 18 feet thick, and is generally of uniform thickness throughout the Application Lands. 

 

12.       Engineering testimony and exhibits submitted in support of the Application by Andy Peterson, Senior Vice President of Operations for Integrated Petroleum Technologies, on behalf HRM, showed that HRM is planning to drill six horizontal wells in the Niobrara Formation.  Engineering testimony further showed that the drainage area for analog approximately two-mile-long horizontal Codell-Niobrara Formation wells is estimated at 13 acres, 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 six horizontal wells producing oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.

 

13.       Applicant stated that the wells will be drilled from no more than two pads.

 

14.       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.

 

15.       HRM agreed to be bound by oral order of the Commission.

 

16.       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 establish an approximate 640-acre drilling and spacing unit for Sections 30 and 31, Township 1 North, Range 65 West, 6th P.M., and approve up to six horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations.

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 640-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to six 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 North, Range 65 West, 6th P.M.
Section 30:      E˝

Section 31:      E˝

 

2.         The productive interval of each 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 within the unit, unless the Director grants an exception.

 

3.         The wells shall be drilled from no more than two pads, 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 22nd day of July, 2016, as of July 19, 2016.           

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By__________________________________

            Julie Murphy, Secretary