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. 170300111
TYPE: ADDITIONAL WELLS
ORDER NO. 407-1907 |
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 19 horizontal wells within an approximate 640-acre drilling and spacing unit established by Order No. 407-833 for Section 11, Township 3 North, Range 68 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. Section 11, Township 3 North, Range 68 West, 6th P.M., is 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. Section 11, Township 3 North, Range 68 West, 6th P.M., is subject to this Rule for the Niobrara and Codell Formations.
6. On July 29, 2013, the Commission entered Order No. 407-833 which, among other things, established an approximate 640-acre horizontal drilling and spacing unit for the Application Lands, and approved up to twelve horizontal wells within the drilling and spacing unit for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation, with the treated interval of the wellbore to be located no closer than 460 feet from the unit boundaries and no closer than 150 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director, and providing that Applicant may use its existing surface blanket bond to locate the wellpads for the proposed horizontal wells at a surface location outside the applicable GWA drilling window within the unit. Section 11, Township 3 North, Range 68 West, 6th P.M., is subject to this Order for the production of the oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.
Township 3 North, Range 68 West, 6th P.M.
Section 11: All
8. Applicant stated that any horizontal wells to be drilled under this Application will be drilled from no more than two multi-well pads 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 262 to 272 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 21 to 23 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 for Petrotek Engineering Corporation, showed that Great Western is planning to drill 19 horizontal wells in the Niobrara and Codell Formations. Engineering testimony further showed that the drainage area for analog horizontal Niobrara Formation wells is estimated at 20 acres, the drainage area for analog horizontal Codell Formation wells is estimated at 65 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 19 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 19 horizontal wells for the production of the oil, gas, and associated hydrocarbons from the Niobrara and Formations within an approximate 640-acre drilling and spacing unit established by Order No. 407-833 for Section 11, Township 3 North, Range 68 West, 6th P.M.
ORDER
IT IS HEREBY ORDERED:
1. A total of up to 19 horizontal wells within an approximate 640-acre drilling and spacing unit established by Order No. 407-833 for the below described lands are hereby approved for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:
Township 3 North, Range 68 West, 6th P.M.
Section 11: All
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 two multi-well pads 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