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, ADAMS COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 170700443

 

TYPE:  SPACING

 

ORDER NO. 407-2126

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on July 24, 2017, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado 80203, upon application for an order to establish an approximate 1,261.6-acre drilling and spacing unit for Sections 19 and 20, Township 1 South, Range 67 West, 6th P.M., and approve up to 26 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.         Great Western Operating Company, LLC (Operator No. 10110) (“Great Western” 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 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 Order for the Codell and Niobrara Formations.

 

5.         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, with permitted well locations in accordance with the provisions of Order No. 407-1.  The Application Lands are subject to this Order for the Codell and Niobrara Formations.

 

6.         On May 25, 2017, Great Western, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 1,261.6-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to 26 horizontal wells in the proposed unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of any horizontal well to be no closer than 460 feet from the boundaries of the unit 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 1 South, Range 67 West, 6th P.M.

Section 19:      All   

Section 20:      All

 

Applicant states that any wells permitted under this Order shall be located on no more than two well pads in the unit, subject to Rule 318A.

 

7.     On or about July 6-10, 2017, Kurt and Wendy Engelmann, Nicolas and Sonia Azar, Ben Murphy, Mark Gormley, George Hoen, Elaine Logue, Shari and Frederick Sanchez, Johnny and Pamela Trujillo, Benjamin and Sharon Whitmarsh, Martin and Michelle Wickline (collectively, “Protestants”) each filed a letter of protest to the Application for various reasons relating to public health, safety and welfare as well as the concerns relating to the environment and property values. 

 

8.         On July 18, 2017, a prehearing conference was held at which time the Protestants had the opportunity to be heard. 

 

9.         On July 19, 2017, the Hearing Officer converted the letters of protests to Rule 510 statements.

 

10.       On or before July 3, 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.

 

            11.       Land testimony and exhibits submitted in support of the Application by Matthew Acree, Senior Landman for Great Western, showed that Great Western holds oil and gas leasehold interests and has a right to drill in the Application Lands.

 

12.       Geologic testimony and exhibits submitted in support of the Application by Willis Wilcoxon, Geologist for Great Western, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 312 to 315 feet thick, and that the Codell Formation is present throughout the Application Lands, is approximately 18.5 to 19.5 feet thick.

 

13.       Engineering testimony and exhibits submitted in support of the Application by Lewis Wandke, Senior Engineer for Petrotek Engineering Corporation retained by Great Western, showed that the drainage area for 9,640’ Niobrara Formation wells is estimated at 46 acres, and that the drainage area for 9,640’ Codell Formation wells is estimated at 155 acres,  and an approximate 1,261.6-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by 26 horizontal wells producing oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.

 

14.       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.       Great Western agreed to be bound by oral order of the Commission.

 

14.       Based on the facts stated in the verified Application, having resolved all protests, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to establish an approximate 1,261.6-acre drilling and spacing unit for Sections 19 and 20, Township 1 South, Range 67 West, 6th P.M., and approve up to 26 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 1,261.6-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 26 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 South, Range 67 West, 6th P.M.

Section 19:      All   

Section 20:      All

 

2.         The productive interval of each 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 within the unit, unless the Director grants an exception.

 

3.         The wells shall be drilled from no more than two multi-well pads in the unit or adjacent thereto, 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 16th day of August, 2017, as of July 24, 2017.        

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By__________________________________

            James Rouse, Acting Secretary