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 FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 170500244
TYPE: SPACING
ORDER NO. 407-2050 |
REPORT OF THE COMMISSION
The Commission heard this matter on June 12, 2017, at the Rio Blanco County Courthouse, 555 Main Street, Meeker, Colorado, upon application for an order to vacate one approximate 640-acre drilling and spacing unit established by Order Nos. 407-779 and 535-4 for Section 34, Township 5 North, Range 61 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, and to establish an approximate 1,280-acre drilling and spacing unit for Sections 33 and 34, Township 5 North, Range 61 West, 6th P.M., and approve up to 16 horizontal wells in the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Bill Barrett Corporation (“BBC” 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 April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule. The Application Lands are subject to this Rule for the Niobrara Formation.
5. On February 22, 2011 (Corrected April 4, 2013), the Commission entered Order No. 407-779 and 535-4 that established 74 approximate 640-acre drilling and spacing units for the Application Lands, among others, and approved one horizontal well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the permitted wellbore to be located no closer than 460 feet from the boundaries of the established units.
6. On March 2, 2017, BBC, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to vacate one approximate 640-acre drilling and spacing unit established by Order Nos. 407-779 and 535-4 for Section 34, Township 5 North, Range 61 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, and to establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”) and approve up to 16 horizontal wells in the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of any horizontal well to be no closer than 460 feet from the unit boundaries, and not less than 150 feet from the productive interval of another well within the unit, unless an exception is granted by the Director:
Township 5 North, Range 61 West, 6th P.M.
Section 33: All
Section 34: All
7. On May 22, 2017, BBC, 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 Leslie Mann, Landman I for BBC, showed that both the mineral and surface interests in the Application Lands are owned in fee, federal and State, and that BBC has a partial undivided leasehold interest in the Application Lands.
9. Geoscience testimony and exhibits submitted in support of the Application by Dan Moore, Geologist 2 BBC, showed the Niobrara Formation is present throughout the Application Lands and is approximately 307 to 315 feet thick.
10. Engineering testimony and exhibits submitted in support of the Application by Sean Stewart, Senior Reservoir Engineer at BBC, demonstrated that average drainage width yields 625’ of drainage width per lateral within a Niobrara bench, that extended reach lateral development is the preferred method of development, and that the drilling and completion of horizontal wells in the Niobrara Formation underlying the Application Lands is the most efficient and economic method to develop the resource potential of this formation and will reduce waste and surface disturbance, will promote efficient drainage, and protect correlative rights.
11. Applicant stated that the wells will be drilled from no more than three well pads within the drilling and spacing unit, or adjacent thereto, 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. BBC agreed to be bound by oral order of the Commission.
14. 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 vacate one approximate 640-acre drilling and spacing unit established by Order Nos. 407-779 and 535-4 for Section 34, Township 5 North, Range 61 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, and to establish an approximate 1,280-acre drilling and spacing unit for Sections 33 and 34, Township 5 North, Range 61 West, 6th P.M., and approve up to 16 horizontal wells in the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1) An approximate 640-acre drilling and spacing unit established by Order No. 407-779 and 535-4 for Section 34, Township 5 North, Range 61 West, 6th P.M., is hereby vacated, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation;
2) An approximate 1,280-acre drilling and spacing unit is hereby established for the below-described lands, and up to 16 horizontal wells are hereby approved in the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of any horizontal well to be no closer than 460 feet from the unit boundaries, and not less than 150 feet from the productive interval of another well within the unit, unless an exception is granted by the Director:
Township 5 North, Range 61 West, 6th P.M.
Section 33: All
Section 34: All
3) The approved wells shall be located on no more than three well pads within the unit, or adjacent thereto, unless an exception is granted by the Director.
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 23rd day of June 2017, effective as of June 12, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Peter Gowen, Acting Secretary