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 IN THE NIOBRARA AND CODELL FORMATIONS, WATTENBERG FIELD, WELD County, Colorado.

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CAUSE NO. 407

 

DOCKET NO. 170700472     

 

TYPE: SPACING

 

ORDER NO. 407-2210

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on October 30, 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 640-acre drilling and spacing unit for certain lands in Sections 29 and 32, Township 7 North, Range 65 West, 6th P.M., and approve up to eight horizontal wells within the proposed unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations. 

 

FINDINGS

 

The Commission finds as follows:

 

1.            Bayswater Exploration & Production, LLC (Operator No. 10261) (“Bayswater” 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, 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 29 and 32, Township 7 North, Range 65 West, 6th P.M., are subject to this Rule for the Codell and Niobrara Formations.

 

5.            On May 25, 2017 (Amended July 12, 2017), Bayswater, by its attorneys, filed 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 approve up to eight horizontal wells to be drilled in the unit, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of each wellbore being 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, without exception being granted by the Director:

 

Township 7 North, Range 65 West, 6th P.M.

Section 29:      W˝      

Section 32:      W˝

 

6.            Applicant states that any horizontal wells to be drilled under this Application will be drilled from no more than one multi-well pad subject to Rule 318A, without exception being granted by the Director.

 

7.            On August 21, 2017, Bayswater, 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 Blake Leavitt, Landman for Bayswater, showed that Bayswater holds oil and gas interests and has a right to drill in the Application Lands.

 

9.            Geologic testimony and exhibits submitted in support of the Application by David Brewster, Senior Vice President of Exploration for Bayswater, showed that the Niobrara and Codell Formations are consistently present throughout the Application Lands, and are approximately 272 to 282 feet thick from the top of the Niobrara Formation through the base of the Codell Formation.

 

10.          Engineering testimony and exhibits submitted in support of the Application by John Arsenault, Senior Vice President for Reservoir Engineering for Bayswater, showed that the estimated drainage area for the proposed Codell and Niobrara Formation wells are estimated at 198 acres and 67 acres, respectively, and an approximate 640-acre spacing unit is therefore not less than the maximum area that can be efficiently, economically, and effectively drained by eight horizontal well 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 for more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.

 

12.          Bayswater 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 the W˝  of Section 29 and the W˝ of Section 32, Township 7 North Range 65 West, 6th P.M., and approve up to eight horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.            One approximate 640-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 7 North, Range 65 West, 6th P.M.

Section 29:      W˝ 

Section 32:      W˝  

 

2.            The productive interval of each wellbore being 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, without exception being granted by the Director 

 

3.         The wells will be drilled from no more than one well pad within the unit or at a legal location on adjacent lands, 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 30 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 29th day of November, 2017, as of October 30, 2017.

           

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By_______________________________________ 

                  Julie Spence Prine, Secretary