BEFORE THE OIL & 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, LARIMER COUNTY, COLORADO.

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CAUSE NO. 407

   

DOCKET NO. 170700473

 

TYPE: SPACING

 

ORDER NO.  407-2138

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on July 24, 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 480-acre drilling and spacing unit for the SE¼ of Section 34 and the S½ of Section 35, Township 5 North, Range 68 West, 6th P.M., for the development and production from the Codell and Niobrara Formations.

 

            The Commission finds as follows:

 

1.            Petro Operating Company, LLC, Operator No. 10583 (“Petro” or “Applicant”), is an interested party in the subject matter of the above referenced hearing.

 

2.            Due notice of 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 the parties interested therein, and has authority 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.

 

5.            There are directional wells within the 480-acre drilling and spacing unit producing from, inter alia, the Codell and Niobrara formations. These wells will not be affected by the drilling and spacing unit and will remain subject to applicable Commission rules and spacing order such that proceeds from the sale of oil or gas from those wells shall continue to be distributed based on the applicable rules and spacing orders.

 

6.            On May 25, 2017, Petro, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 480-acre drilling and spacing unit for  the below-described lands (“Application Lands”) and approve up to eight horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of each wellbore be no closer than 150 feet from the productive interval of any other wellbore producing from the Codell and Niobrara Formations, and no closer than 460 feet from a unit boundary, unless an exception is granted by the Director:

 

 

Township 5 North, Range 68 West, 6th P.M.

Section 34:      SE¼

Section 35:      S½

 

7.            On June 30, 2017, Petro, 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 testimony and exhibits were submitted in support of the Application.

 

8.            Land testimony and exhibits submitted in support of the Application by Peter K. Scott Landman for Petro, showed that Petro holds oil and gas leasehold interests and has a right to drill in the Application Lands.

 

9.            Geologic testimony and exhibits submitted in support of the Application by Michael A. Domenick, P.G., Geologist for Petro showed that the Niobrara and Codell Formations are present throughout the Application Lands, are approximately 330 to 365 feet thick from the top of the Niobrara through the base of the Codell.

 

10.          Engineering testimony and exhibits submitted in support of the Application by Kent B. Lina, Petroleum Engineer for Petro, showed that the drainage area for analogous horizontal Codell and Niobrara Formation wells are estimated at 64 acres and 20 acres, respectively, and an approximate 480-acre drilling and spacing unit is therefore not less than the maximum area that can be efficiently, economically and effectively drained by eight horizontal wells producing oil, gas and associated hydrocarbons from the benches of the Codell and Niobrara Formations.

 

11.          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.

 

12.          Petro agreed to be bound by oral order of the Commission.

 

13.          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 480-acre drilling and spacing unit for the SE¼ of Section 34 and the S½ of Section 35, Township 5 North, Range 68 West, 6th P.M., for the development and production from the Codell and Niobrara Formations.

 

ORDER

 

            IT IS HEREBY ORDERED:

 

1.            One approximate 480-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to eight horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations:

 

Township 5 North, Range 68 West, 6th P.M.

Section 34:      SE¼

Section 35:      S½

 

2.            The productive interval of the wellbore shall be no closer than 150 feet from the productive interval of any other wellbore producing from the Codell and Niobrara Formations, and no closer than 460 feet from the unit boundary, unless an exception is granted by the Director.

 

3.            The wells will be drilled from no more than one well pad within the unit, or at legal location on adjacent lands, subject to Rule 318A, 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 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