BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

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. 170300095

 

TYPE:  SPACING

 

ORDER NO. 407-1952

REPORT OF THE COMMISSION

 

            The Commission heard this matter on May 1, 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 320-acre drilling and spacing unit for Section 26, Township 1 North, Range 66 West, 6th P.M., and approve up to 12 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.         Ward Petroleum Corporation, (Operator No. 10359) (“Ward” 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 (amended August 20, 1993), the Commission issued Order 407-87, which, among other things, established 80-acre drilling and spacing units for production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the permitted well locations to be in accordance with Order No 407-1.  Section 26, Township 1 North, Range 66 West, 6th P.M., is 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.  Section 26, Township 1 North, Range 66 West, 6th P.M., is subject to this Rule for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations.

 

6.         On December 22, 2016, Ward, 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 320-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to 12 horizontal wells within the unit, 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 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 1 North, Range 66 West, 6th P.M.
Section 26:      W˝

 

7.         Applicant states that any horizontal wells to be drilled under this Application will be drilled from no more than one multi-well pad, subject to Rule 318A, without exception being granted by the Director.

 

8.         On March 6, 2017, Kerr-McGee Oil & Gas Onshore LP filed a Protest.  On April 28, 2017, Kerr-McGee Oil & Gas Onshore LP withdrew its Protest.

 

9.         On February 27, 2017, Ward, 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 Kent Craig, Landman - Rockies for Ward, showed that Ward 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 Jordan K. Revielle, Geologist for Ward, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 300 to 370 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 14 to 16 feet thick, and is generally of uniform thickness throughout the Application Lands. Further testimony showed that the Codell Formation is made up of sandstone is a common source of supply. 

 

12.       Engineering testimony and exhibits submitted in support of the Application by Kimberly Mitchell, Reservoir Engineer for Ward, showed that the drainage area for analog horizontal Niobrara Formation wells are estimated at 29 acres, and an approximate 320-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 104 acres, and an approximate 320-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.       Ward agreed to be bound by oral order of the Commission.

 

15.       Based on the facts stated in the verified Application, the protest having been withdrawn, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to establish an approximate 320-acre drilling and spacing unit for Section 26, Township 1 North, Range 66 West, 6th P.M., and approve up to 12 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 320-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 12 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 North, Range 66 West, 6th P.M.
Section 26:      W˝

 

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 one multi-well pad 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 3rd day of May, 2017, as of May 1, 2017.

           

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

By____________________________________

Peter Gowen, Acting Secretary