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 CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO
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CAUSE NO. 407
DOCKET NO. 161000400
TYPE: SPACING
ORDER NO. 407-1810 |
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REPORT OF THE COMMISSION
The Commission heard this matter on October 24, 2016, at the Hayes Student Center Ballroom, Northeastern Junior College, 100 College Avenue, Sterling, Colorado, upon application for an order to establish an approximate 1,280-acre drilling and spacing unit for portions of Sections 32, 33, and 34, Township 7 North, Range 67 West, 6th P.M., and approve the drilling of up to 24 horizontal wells within the proposed unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
FINDINGS
The Commission finds as follows:
1. Extraction Oil & Gas LLC, Operator No. 10459, (“Extraction” 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 August 24, 2016, Extraction, by its attorneys, filed with the Commission a verified application (“Application”) for an order to establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to 24 horizontal wells within the proposed unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of the wellbore should be not less than 460 feet from the unit boundaries and no closer than 150 feet from the productive interval of a well producing from the Codell and Niobrara Formations, unless an exception is granted by the Director:
Township 7 North, Range 67 West, 6th P.M.
Section 32: E½
Section 33: All
Section 34: W½
Applicant states that all proposed wells drilled under this Application shall be located on no more than 4 multi-well pads, subject to Rule 318A, unless an exception is granted by the Director.
6. On October 3, 2016, Extraction, 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.
7. Testimony and exhibits submitted in support of the Application by Adam Sarvey, Landman for Extraction, showed that Extraction owns substantial leasehold interests in the Application Lands.
8. Testimony and exhibits submitted in support of the Application by Matt Volkmar, Petroleum Engineer for Extraction, showed that the thickness of the Niobrara Formation underlying the Application Lands ranges from approximately 230 to 245 feet thick, and the thickness of the Codell Formation underlying the Application Lands is approximately 20 to 30 feet thick. Further testimony showed that the Niobrara Formation is a hydrocarbon source rock and a reservoir, while the Codell Formation is a sandstone reservoir.
9. Engineering testimony and exhibits submitted in support of the Application by John Tonello, Engineering Manager for Extraction, showed that drilling and completing horizontal wells within the Codell and Niobrara Formations underlying the Application Lands is an efficient and economic method of developing the resource. Testimony concluded a 1,280-acre unit would accommodate the drilling of twenty-four (24) horizontal wells drilled to the Codell or Niobrara Formations, while protecting correlative rights of adjacent mineral owners.
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. Extraction agrees 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 establish an approximate 1,280-acre drilling and spacing unit for portions of Sections 32, 33, and 34, Township 7 North, Range 67 West, 6th P.M., and approve the drilling of up to 24 horizontal wells within the proposed unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and up to twenty-four (24) horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of the wellbore to be located not less than 460 feet from the unit boundaries, and no closer than 150 feet from the productive interval of a well producing from the Codell and Niobrara Formations, unless exception is granted by the Director:
Township 7 North, Range 67 West, 6th P.M.
Section 32: E½
Section 33: All
Section 34: W½
2. Any horizontal wells to be drilled under this Application will be drilled from no more than four multi-well pads subject to Rule 318A, unless an exception is granted by the Director.
IT IS FURTHER ORDERED:
1. The provisions contained in the above order shall become effective immediately.
2. The Commission expressly reserves the 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 4th day of November, 2016, as of October 24, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Julie Murphy, Secretary