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. 170100090
TYPE: SPACING
ORDER NO. 407-1939 CORRECTED
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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 establish an approximate 2,240-acre drilling and spacing unit for portions of Sections 22, 23, and 24, Township 6 North, Range 64 West, 6th P.M., and Sections 19, 20, and 21, Township 6 North, Range 63 West, 6th P.M., and approve up to 16 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. Noble Energy, Inc. (Operator No. 100322) (“Noble” 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 February 19, 1992, the Commission issued Order No. 407-87 (amended August 20, 1993), which among other things, established 80-acre drilling and spacing units for the production of oil and/or gas 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 22, 23, and 24, Township 6 North, Range 64 West, 6th P.M., and Sections 19, 20, and 21, Township 6 North, Range 63 West, 6th P.M., are subject to this Order for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations.
5. On April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule. Sections 22, 23, and 24, Township 6 North, Range 64 West, 6th P.M., and Sections 19, 20, and 21, Township 6 North, Range 63 West, 6th P.M., are subject to this Rule for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations.
6. On December 5, 2016, Noble, by its attorneys, filed with the Commission a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 2,240-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to 16 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations, with the productive interval of the wellbore to 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 located in the unit, without exception being granted by the Director:
Township 6 North, Range 64 West, 6th P.M.
Section 22: E½E½
Section 23: All
Section 24: All
Township 6 North, Range 63 West, 6th P.M.
Section 19: W½NW¼, S½
Section 20: S½
Section 21: W½SW¼
7. Applicant states that any horizontal wells to be drilled under this Application will be drilled from no more than three multi-well pads, subject to Rule 318A, without exception being granted by the Director.
8. On January 13, 2017, Bayswater Exploration & Production, LLC filed a protest. On March 16, 2017, Bayswater withdrew its protest.
9. On February 24, 2017, amended March 16, 2017, Noble, 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 Julie T. Jenkins, Land Manager for Noble, showed that Noble 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 Dr. Heather LaReau, Sr. Geologist for Noble, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 235 to 250 feet thick, and is generally of uniform thickness throughout the Application Lands. Further testimony showed that the Niobrara Formation is a sequence of chalks, marls and limestones and is a common source of supply. Geologic testimony also showed that the Codell Formation is present throughout the Application Lands, is approximately 17 to 18 feet thick, and is generally of uniform thickness throughout the Application Lands. Further testimony showed that the Codell Formation is made up of sandstone and is a common source of supply.
12. Engineering testimony and exhibits submitted in support of the Application by Scott McEntyre, Engineering Team Lead for Noble, showed that the drainage area for analog horizontal Niobrara Formation wells are estimated at 131 acres, and an approximate 2,240-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by a horizontal well producing oil, gas and associated hydrocarbons from the Niobrara Formation. Engineering testimony also showed that the drainage area for analog horizontal Codell Formation wells are estimated at 184 acres, and an approximate 2,240-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by a horizontal well producing oil, gas and associated hydrocarbons from the Codell Formation.
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. Noble 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 enter an order to establish an approximate 2,240-acre drilling and spacing unit for portions of Sections 22, 23, and 24, Township 6 North, Range 64 West, 6th P.M., and Sections 19, 20, and 21, Township 6 North, Range 63 West, 6th P.M., and approve up to 16 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 2,240-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 16 horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations:
Township 6 North, Range 64 West, 6th P.M.
Section 22: E½E½
Section 23: All
Section 24: All
Township 6 North, Range 63 West, 6th P.M.
Section 19: W½NW¼, S½
Section 20: S½
Section 21: W½SW¼
2. The productive interval of the wellbore will 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 producing from the same source of supply within the unit, unless the Director grants an exception.
3. All wells permitted under this Order shall be drilled from no more than three multi-well pads within the Application Lands, 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 28th day of March, 2017, as of March 20, 2017.
CORRECTED this 19th day of June, 2017, as of March 20, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By______________________________________
Peter Gowen, Acting Secretary