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 FOR THE NIOBRARA AND CODELL FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
) ) ) ) ) ) ) |
CAUSE NO. 407
DOCKET NO. 171000697
TYPE: SPACING
ORDER NO. 407-2238 |
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 800-acre drilling and spacing unit for Sections 1, 2, and 3, Township 5 North, Range 65 West, 6th P.M., and approve up to five horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.
FINDINGS
The Commission finds as follows:
1. Noble Energy, Inc. (Operator No. 100322) (“Noble” 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 February 19, 1992, the Commission issued Order No. 407-87 (amended August 20, 1993), which among other things, 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. Sections 1, 2, and 3, Township 5 North, Range 65 West, 6th P.M., are subject to this Order for the Niobrara and Codell Formations.
5. On April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule. Sections 1, 2, and 3, Township 5 North, Range 65 West, 6th P.M., are subject to this Rule for the Niobrara and Codell Formations.
6. On August 31, 2017, Noble, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 800-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to five horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell 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 5 North, Range 65 West, 6th P.M.
Section 1: SW¼
Section 2: S½
Section 3: S½
Applicant stated that the proposed wells shall be located on no more than two new multi-well pads within the drilling and spacing unit, or on lands adjacent thereto, subject to Rule 318A, unless the Director grants an exception.
7. On October 4, 2017, Noble, 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 Ryan Antonio, Land Manager for Noble, showed that Noble has the authority to operate a majority partial undivided leasehold interest in the Application Lands.
9. Geologic testimony and exhibits submitted in support of the Application by Emerson Palmer, Senior Geologist for Noble, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 257 to 268 feet thick, and is generally of uniform thickness throughout the Application Lands. Geologic testimony also showed that the Niobrara Formation is a sequence of chalks, marls, and limestones. The geologic testimony also showed that the Codell Formation is present throughout the Application Lands, is approximately 17 to 18 feet thick, and is generally of uniform thickness throughout the Application Lands. Geologic testimony also showed that the Codell Formation consists of sandstone.
10. Engineering testimony and exhibits submitted in support of the Application by Seth Prince, Reservoir Engineer III for Noble, showed that the drainage area for analog horizontal Niobrara Formation wells normalized to a 9,490 foot lateral length is estimated at 78 acres, and an approximate 800-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 Niobrara Formation. The engineering testimony also showed that the drainage area for analog horizontal Codell Formation wells normalized to a 9,490 foot lateral length is estimated at 74 acres, and an appropriate 800-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 Formation. In addition, the engineering testimony showed that the average drainage radius for Niobrara wells is 202 feet and the average drainage radius for Codell wells is 192 feet, both of which are less that the requested 460-foot setback from the unit boundaries.
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. Noble 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 800-acre drilling and spacing unit for Sections 1, 2, and 3, Township 5 North, Range 65 West, 6th P.M., and approve up to five 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. An approximate 800-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to five horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:
Township 5 North, Range 65 West, 6th P.M.
Section 1: SW¼
Section 2: S½
Section 3: S½
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 located in the unit, unless the Director grants an exception.
3. The proposed wells shall be located on no more than two new multi-well pads within the drilling and spacing unit, or on lands adjacent thereto, 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 21st day of November, 2017, as of October 30, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Julie Spence Prine, Secretary