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 CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 170900587
TYPE: SPACING
ORDER NO. 407-2188 |
REPORT OF THE COMMISSION
The Commission heard this matter on September 11, 2017, at the Durango Public Library, Program Room #2, 1900 East Third Avenue, Durango, Colorado, upon application for an order to establish an approximate 1,280-acre drilling and spacing unit for Sections 5 and 6, Township 7 North, Range 65 West, 6th P.M., and approve a total of eight horizontal wells within this proposed 1,280-acre drilling and spacing unit, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations.
FINDINGS
The Commission finds as follows:
1. Enerplus Resources (USA) Corporation (Operator No. 10177) (“Enerplus” 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. Sections 5 and 6, Township 7 North, Range 65 West, 6th P.M. are subject to Rule 318A for the Codell and Niobrara Formations.
5. On July 13, 2017, Enerplus, 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 approximate1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve eight 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 7 North, Range 65 West, 6th P.M
Section 5: All
Section 6: All
Applicant stated that any horizontal wells to be drilled will be drilled from no more than two multi-well pads on the surface of the drilling unit, or on adjacent lands with consent of the landowner, unless an exception is granted by the Director.
6. On August 18, 2017, Enerplus, 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.
7. Land testimony and exhibits submitted in support of the Application by Sean Gallagher, Senior Landman for Enerplus, showed that Enerplus holds oil and gas leasehold interests and has a right to drill in the Application Lands.
8. Geologic testimony and exhibits submitted in support of the Application by Jill Haynie, Senior Geoscientist for Enerplus, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 295 to 310 feet thick, and is generally of uniform thickness throughout the Application Lands and the Codell Formation is present throughout the Application Lands, is approximately 16 to 20 feet thick, and is generally of uniform thickness throughout the Application Lands. Further geologic testimony showed that the Niobrara and Codell Formations are both common sources of supply underlying the Application Lands.
9. Engineering testimony and exhibits submitted in support of the Application by Cody Clickner, Reservoir Engineer for Enerplus, showed that the drainage area for analog horizontal Codell Formation wells is estimated at 212 acres and for analog horizontal Niobrara Formation wells is estimated at 568 acres and that an approximate 1,280-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 and Niobrara Formations.
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. Enerplus 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 Officer review of the Application under Rule 511, the Commission should enter an order to establish an approximate 1,280-acre drilling and spacing unit for Sections 5 and 6, Township 7 North, Range 65 West, 6th P.M., and approve eight 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 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of 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 7 North, Range 65 West, 6th P.M
Section 5: All
Section 6: All
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, without exception being granted by the Director.
3. Any horizontal wells to be drilled shall be drilled from no more than two multi-well pads on the surface of the drilling unit, or on adjacent lands with consent of the landowner, 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 22nd day of September, 2017, as of September 11, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
James P. Rouse, Acting Secretary