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, ADAMS COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 161000391
TYPE: SPACING
ORDER NO. 407-1870 |
REPORT OF THE COMMISSION
The Commission heard this matter on January 30, 2017, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to establish an approximate 1279.10-acre drilling and spacing unit for Sections 8 and 17, Township 1 South, Range 67 West, 6th P.M., and approve up to 21 horizontal wells in the proposed drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
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 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 and Niobrara Formations, with permitted well locations in accordance with the provisions of Order No. 407-1
5. On April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule.
Township 1 South, Range 67 West, 6th P.M.
Section 8: All
Section 17: All
7. On September 23, 2016, Extraction Oil and Gas, LLC (“Extraction” or “Protestant”) filed a protest to the Application. On January 9, 2017, Extraction withdrew its protest to the Application.
8. On January 10, 2017, 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 Matt Acree, Senior Landman for Great Western, showed that both the mineral and surface interests in the Application Lands are owned in fee, and that Great Western owns a partial undivided leasehold ownership interest in the Application Lands.
9. Geoscience testimony and exhibits submitted in support of the Application by Willis Wilcoxon, Geologist for Great Western, showed the Codell Formation is present throughout the Application Lands and is approximately 20 to 22 feet thick, and the Niobrara Formation is present throughout the Application Lands and is approximately 373 to slightly less than 381 feet thick.
10. Engineering testimony and exhibits submitted in support of the Application by Lewis S. Wandke, Senior Engineer at Petrotek Engineering Corporation, demonstrated that the hydrocarbons under the Application Lands would not be fully recovered without the application of horizontal well technology, that the estimated drainage for a 9,640’ horizontal Niobrara well is approximately 64 acres and for a 9,640’ horizontal Codell well is approximately 192 acres, and that the proposed 640-acre drilling and spacing unit, with the requested setbacks, and with the requested number of horizontal wells in the Codell and Niobrara Formations in the Application Lands, will promote efficient drainage, protect correlative rights, and prevent waste.
11. Applicant stated that the wells will be drilled from no more than one wellpad within the drilling and spacing unit, unless an exception is granted by the Director.
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. Great Western agreed to be bound by oral order of the Commission.
14. Based on the facts stated in the verified Application, having resolved the protest, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to establish an approximate 1279.10-acre drilling and spacing unit for Sections 8 and 17, Township 1 South, Range 67 West, 6th P.M., and approve up to 21 horizontal wells in the proposed drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 1279.10-acre drilling and spacing unit for the below-described lands is hereby established, and up to 21 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 South, Range 67 West, 6th P.M.
Section 8: All
Section 17: All
2. The productive interval of the wellbore of each well 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 one wellpad, 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 31st day of January, 2017, as of January 30, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By ____________________________________
Julie Murphy, Secretary