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 AND CODELL FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407 DOCKET NO. 170900574 TYPE: POOLING ORDER NO. 407-2180 |
REPORT OF THE COMMISSION
The Commission heard this matter on September 11, 2017, at the Durango Public Library, 1900 East Third Avenue, Durango, Colorado, upon application for an order to pool all interests in two approximate 280-acre wellbore spacing units and eight approximate 560-acre wellbore spacing units designated for portions of Sections 10, 11, 14, 15, 22, and 23, Township 1 North, Range 67 West, 6th P.M., established for the Wagner 28N-W10HZ well, the Wagner 28N-E10HZ well, the Marrs 28N-10HZ well, the Wagner 2C-10HZ well, the Wagner 27C-10HZ well, the Wagner 2N-10HZ well, the Wagner 27N-10HZ well, the Wagner 1N-W10HZ well, the Wagner 1N-E10HZ well, and the Wagner 26C-10HZ well, for development and operation of the Niobrara and Codell Formations.
FINDINGS
The Commission finds as follows:
1. Kerr-McGee Oil & Gas Onshore LP, Operator No. 47120 (“Kerr-McGee” 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.
5. On February 19, 1992 (amended August 20, 1993), the Commission entered Order No. 407-87 which established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations, with the permitted well locations in accordance with the provisions of Order No. 407-1.
6. On July 13, 2017, Applicant, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S. for an order to pool all interests in two approximate 280-acre wellbore spacing units and eight approximate 560-acre wellbore spacing units established for below-described lands (“Application Lands”), for the development and operation of the Niobrara and Codell Formations, for the drilling of the Wagner 28N-W10HZ well (API No. 05-123-43472), the Wagner 28N-E10HZ well (API No. 05-123-43469), the Marrs 28N-10HZ well (API No. 05-123-43270), the Wagner 2C-10HZ well (API No. 05-123-43473), the Wagner 27C-10HZ well (API No. 05-123-43474), the Wagner 2N-10HZ well (API No. 05-123-43471), the Wagner 27N-10HZ well (API No. 05-123-43470), the Wagner 1N-W10HZ well (API No. 05-123-43476), the Wagner 1N-E10HZ well (API No. 05-123-43475), and the Wagner 26C-10HZ well (API No. 05-123-43477) (“Wells”):
Township
1 North, Range 67 West, 6th P.M.
Section 10: SW¼SE¼, SE¼SW¼
Section 15: W½E½, E½W½
Section 22: W½NE¼, E½NW¼
Wellbore Spacing Unit (“WSU”) Nos. 1 thru 3 (560-acres):
Wagner
28N-W10HZ well (Niobrara Formation)
Wagner 28N-E10HZ well (Niobrara Formation)
Marrs 28N-10HZ well (Niobrara Formation)
Township 1
North, Range 67 West, 6th P.M.
Section 10: SW¼SE¼
Section 15: W½E½
Section 22: W½NE¼
WSU No. 4 (280-acres):
Wagner 2C-10HZ well (Codell Formation)
Township 1
North, Range 67 West, 6th P.M.
Section 10: S½SE¼
Section 15: E½
Section 22: NE¼
WSU Nos. 5 thru 7 (560-acres):
Wagner
27C-10HZ well (Codell Formation)
Wagner 2N-10HZ well (Niobrara Formation)
Wagner 27N-10HZ well (Niobrara Formation)
Township 1
North, Range 67 West, 6th P.M.
Section 10: SE¼SE¼
Section 15: E½E½
Section 22: E½NE¼
WSU No. 8 (280-acres):
Wagner 1N-W10HZ well (Niobrara Formation)
Township 1
North, Range 67 West, 6th P.M.
Section 10: SE¼SE¼
Section 11: SW¼SW¼
Section 14: W½W½
Section 15: E½E½
Section 22: E½NE¼
Section 23: W½NW¼
WSU Nos. 9 thru 10 (560-acres):
Wagner
1N-E10HZ well (Niobrara Formation)
Wagner 26C-10HZ well (Codell Formation)
7. On August 21, 2017, Applicant, 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 Austin Brewer, Landman for Kerr-McGee showed that Kerr-McGee has been unable to unable to unable to effect the voluntary pooling of all interest within the two approximate 280-acre wellbore spacing units and eight approximate 560-acre wellbore spacing units established for the Application lands and that based upon an examination of relevant contracts and records, all owners of an oil and gas interests in the tracts to be pooled(who could be located by Kerr-McGee) received timely notice of the Application.
9. Applicant confirmed that Commission Rules 530.b. and c. do not apply as it is not seeking statutory cost recovery provisions of § 34-60-116(7), C.R.S. against working interest owners or unleased mineral interest owners in this Application.
10. 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.
11. Applicant agreed to be bound by oral order of the Commission.
12. Based on the facts stated in the verified Application, having received no protests, and based on the Hearing Unit review of the Application under Rule 511., the Commission should enter an order to pool all interests in the in two approximate 280-acre wellbore spacing units and eight approximate 560-acre wellbore spacing units designated for portions of Sections 10, 11, 14, 15, 22, and 23, Township 1 North, Range 67 West, 6th P.M., for the development and operation of the Niobrara and Codell Formations.
ORDER
IT IS HEREBY ORDERED:
1. Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, all interests in in two approximate 280-acre wellbore spacing units and eight approximate 560-acre wellbore spacing units established for the below-described lands, are hereby pooled, for the development and operation of the Niobrara and Codell Formations, effective as of the date of the Application, for the drilling of the Wagner 28N-W10HZ well (API No. 05-123-43472), the Wagner 28N-E10HZ well (API No. 05-123-43469), the Marrs 28N-10HZ well (API No. 05-123-43270), the Wagner 2C-10HZ well (API No. 05-123-43473), the Wagner 27C-10HZ well (API No. 05-123-43474), the Wagner 2N-10HZ well (API No. 05-123-43471), the Wagner 27N-10HZ well (API No. 05-123-43470), the Wagner 1N-W10HZ well (API No. 05-123-43476), the Wagner 1N-E10HZ well (API No. 05-123-43475), and the Wagner 26C-10HZ well (API No. 05-123-43477):
Township
1 North, Range 67 West, 6th P.M.
Section 10: SW¼SE¼, SE¼SW¼
Section 15: W½E½, E½W½
Section 22: W½NE¼, E½NW¼
Wellbore Spacing Unit (“WSU”) Nos. 1 thru 3 (560-acres):
Wagner
28N-W10HZ well (Niobrara Formation)
Wagner 28N-E10HZ well (Niobrara Formation)
Marrs 28N-10HZ well (Niobrara Formation)
Township 1
North, Range 67 West, 6th P.M.
Section 10: SW¼SE¼
Section 15: W½E½
Section 22: W½NE¼
WSU No. 4 (280-acres):
Wagner 2C-10HZ well (Codell Formation)
Township 1
North, Range 67 West, 6th P.M.
Section 10: S½SE¼
Section 15: E½
Section 22: NE¼
WSU Nos. 5 thru 7 (560-acres):
Wagner
27C-10HZ well (Codell Formation)
Wagner 2N-10HZ well (Niobrara Formation)
Wagner 27N-10HZ well (Niobrara Formation)
Township 1
North, Range 67 West, 6th P.M.
Section 10: SE¼SE¼
Section 15: E½E½
Section 22: E½NE¼
WSU No. 8 (280-acres):
Wagner 1N-W10HZ well (Niobrara Formation)
Township 1
North, Range 67 West, 6th P.M.
Section 10: SE¼SE¼
Section 11: SW¼SW¼
Section 14: W½W½
Section 15: E½E½
Section 22: E½NE¼
Section 23: W½NW¼
WSU Nos. 9 thru 10 (560-acres):
Wagner
1N-E10HZ well (Niobrara Formation)
Wagner 26C-10HZ well (Codell Formation)
2. The production obtained from each wellbore spacing unit shall be allocated to each owner in the unit on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within the wellbore spacing unit; each owner of an interest in the drilling and spacing unit shall be entitled to receive its share of the production of the Well located within the wellbore spacing unit applicable to its interest in the wellbore spacing unit.
3. Nothing in this order is intended to conflict with §34-60-116, C.R.S., as amended. Any conflict that may arise shall be resolved in favor of the statute.
4. The wellbore spacing units described above shall be considered drilling and spacing unit established by the Commission for purposes of Rule 530.a.
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 22nd day of September, 2017, as of September 11, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
James Rouse, Acting Secretary