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-NIOBRARA FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 170900590
TYPE: SPACING
ORDER NO. 407-2189
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REPORT OF THE COMMISSION
The Commission heard this matter on September 11, 2017, at the Durango Public Library, Program Room #2, 1900 East 3rd Avenue, Durango, Colorado, 81301, upon application for an order to establish an approximate 640-acre drilling and spacing unit for Sections 9 and 10, Township 7 North, Range 67 West, 6th P.M., and approve up to ten horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell-Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Extraction Oil & Gas, Inc. (Operator No. 10459) (“Extraction” 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 9 and 10, Township 7 North, Range 67 West, 6th P.M., are subject to this Rule for the Codell-Niobrara Formation.
5. On July 13, 2017, Extraction, 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 approximate 640-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to ten horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation, 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 67 West, 6th P.M.
Section 9: N½
Section 10: N½
6. Applicant states that any horizontal wells to be drilled under this Application will be drilled from no more than two multi-well pads subject to Rule 318A, without exception being granted by the Director.
7. On August 21, 2017, Extraction, 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 Sean Flanagan, Landman for Applicant, showed that Extraction 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 Alicia Branch, Geologist for Applicant, showed that the Codell-Niobrara Formation is present throughout the Application Lands, that the Codell Formation is approximately 20 to 22 feet thick and the Niobrara Formation is approximately 250 to 260 feet thick, and are generally of uniform thickness throughout the Application Lands. Further testimony showed that the Codell Formation is sandstone and the Niobrara Formation is a sequence of chalks, marls and limestones, and both are a common source of supply.
10. Engineering testimony and exhibits submitted in support of the Application by Boyd McMaster, Petroleum Engineer for Applicant, showed that the drainage area for analog horizontal Codell Formation wells is estimated at 47 acres and the drainage area for analog horizontal Niobrara Formation wells is estimated at 24 acres, and an approximate 640-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by ten horizontal wells producing oil, gas and associated hydrocarbons from the Codell-Niobrara Formation.
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. Extraction 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 640-acre drilling and spacing unit for Sections 9 and 10, Township 7 North, Range 67 West, 6th P.M., and approve up to ten horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell-Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to ten horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation:
Township
7 North, Range 67 West, 6th P.M.
Section 9: N½
Section 10: N½
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, unless the Director grants an exception.
3. All wells permitted under this Order shall be drilled from no more than two multi-well pads within the Application Lands, or on lands adjoining the Application Lands by landowner consent, subject to Rule 318A, 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 2nd day of October, 2017, as of September 11, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
James P. Rouse, Acting Secretary