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 FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 170300110
TYPE: ADDITIONAL WELLS
ORDER NO. 407-1906 |
REPORT OF THE COMMISSION
The Commission heard this matter on March 20, 2017, at the Larimer County Conference Center at The Ranch, First National Bank Building, 5280 Arena Circle, Loveland, Colorado, upon application for an order to approve a total of up to 12 horizontal wells within an approximate 640-acre drilling and spacing unit established by Order No. 407-1778 for Sections 2 and 3, Township 4 North, Range 67 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. Great Western Operating Company, LLC (Operator No. 10110) (“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, 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 and Niobrara Formations underlying certain lands, with the permitted well locations in accordance with the provisions of Order No. 407-1. Sections 2 and 3, Township 4 North, Range 67 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 April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule. Sections 2 and 3, Township 4 North, Range 67 West, 6th P.M., are subject to this Rule for the Niobrara and Codell Formations.
6. On August 29, 2016, the Commission entered Order No. 407-1778 which, among other things, established an approximate 640-acre drilling and spacing unit and approved up to 10 horizontal wells within the unit for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations on the Application Lands, providing that the productive interval of the wellbore shall be located no closer than 460 feet from the unit boundaries and no closer than 150 feet from the productive interval of any other wellbore in the unit, unless an exception is granted by the Director, and further providing that the proposed wells shall be located on no more than one well pad within the drilling and spacing unit, subject to Rule 318A, unless the Director grants and exception. Sections 2 and 3, Township 4 North, Range 67 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.
Township 4 North, Range 67 West, 6th P.M.
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Section 3: S˝
8. Applicant stated that any horizontal wells to be drilled under this Application will be drilled from no more than one multi-well pad within the unit or adjacent thereto, unless the Director grants an exception.
9. On February 27, 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.
10. Land testimony and exhibits submitted in support of the Application by Santiago Rodriguez, Senior Landman for Great Western, showed that Grizzly Petroleum Company, LLC holds oil and gas leasehold interests in the Application Lands, and that Great Western has authority to operate the oil and gas leasehold interests of Grizzly Petroleum Company, LLC and has a right to drill in the Application Lands.
11. Geoscience testimony and exhibits submitted in support of the Application by Willis E. Wilcoxon, Geologist for Great Western, showed the Niobrara Formation is present throughout the Application Lands, is approximately 290 to 320 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 26 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.
12. Engineering testimony and exhibits submitted in support of the Application by Lewis S. Wandke, Senior Engineer at Petrotek Engineering Corporation, showed that Great Western is planning to drill 12 horizontal wells in the Niobrara Formation and Codell Formations. Engineering testimony further showed that the drainage area for analog horizontal Niobrara Formation wells is estimated at 45 acres, the drainage area for analog horizontal Codell Formation wells is estimated at 147 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 12 horizontal wells producing oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.
13. 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.
14. Great Western agreed to be bound by oral order of the Commission.
15. 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 12 horizontal wells for the production of the oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations within an approximate 640-acre drilling and spacing unit established by Order No. 407-1778 for Sections 2 and 3, Township 4 North, Range 67 West, 6th P.M.
ORDER
IT IS HEREBY ORDERED:
1. A total of up to 12 horizontal wells within an approximate 640-acre drilling and spacing unit established by Order No. 407-1778 for the below described lands are hereby approved for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations within an approximate 640-acre drilling and spacing unit established by Order No. 407-1778 for the below described lands are hereby approved for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:
Township 4 North, Range 67 West, 6th P.M.
Section 2: S˝
Section 3: S˝
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 one multi-well pad within the Application Lands within the unit or adjacent thereto, subject to Rule 318A, 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 27th day of March, 2017, effective as of March 20, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Peter Gowen, Acting Secretary