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. 171200808
TYPE: SPACING
ORDER NO. 407-2277 CORRECTED
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REPORT OF THE COMMISSION
The Commission heard this matter on December 11, 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 1,440-acre drilling and spacing unit for certain portions of Section 6, Township 5 North, Range 66 West, 6th P.M. and Sections 1 and 2, Township 5 North, Range 67 West, 6th P.M., and approve up to 20 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. SRC Energy Inc., Operator No. 10311 (“SRC” 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. Section 6, Township 5 North, Range 66 West, 6th P.M. and Sections 1 and 2, Township 5 North, Range 67 West, 6th P.M., are subject to this Rule for the Niobrara and Codell Formations.
5. On October 11, 2017, amended October 20, 2017, SRC, 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 1,440-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to 20 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 northern, southern, and eastern boundaries of the proposed unit, and no closer than 150 feet from the western boundary of the proposed unit, 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 66 West, 6th P.M.
Section 6: W˝W˝
Township 5 North, Range 67 West, 6th P.M.
Section 1: All
Section 2: All
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 November 20, 2017, SRC, 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 Matt Miller, Vice President of Land for SRC, showed that SRC owns an unleased mineral interest and has a right to drill in the Application Lands. Furthermore, the land testimony indicated the wellbore orientation of each well drilled under this Application will be drilled in an east/west direction.
9. Geologic testimony and exhibits submitted in support of the Application by Thomas Birmingham, Geologist for SRC, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 250 to 290 feet thick, and is generally of uniform thickness throughout the Application Lands. The geologic testimony also showed that the Codell Formation is present throughout the Application Lands, is approximately 19 to 24 feet thick, and is generally of uniform thickness throughout the Application Lands. Geologic exhibits showed that SRC is planning to drill the horizontal wells in an east-west orientation.
10. Engineering testimony and exhibits submitted in support of the Application by Brett Hall, Reservoir Engineer for SRC, showed that the drainage area for analog horizontal Niobrara Formation wells is estimated at 95 acres, and an approximate 1,440-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 is estimated at 169 acres, and an appropriate 1,440-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.
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. SRC 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 1,440-acre drilling and spacing unit for certain portions of Section 6, Township 5 North, Range 66 West, 6th P.M. and Sections 1 and 2, Township 5 North, Range 67 West, 6th P.M., and to approve up to 20 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 1,440-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 20 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 66 West, 6th P.M.
Section 6: W˝N˝
W˝W˝
Township 5 North, Range 67 West, 6th P.M.
Section 1: All
Section 2: All
2. The productive interval of the wellbore will be located no closer than 460 feet from the northern, southern, and eastern boundaries of the proposed unit, and no closer than 150 feet from the western boundary of the proposed unit, 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 horizontal wells approved under this Order shall be drilled from no more than two multi-well pads within the Application Lands, subject to Rule 318A, unless the Director grants an exception.
4. All horizontal wells approved under this Order shall be drilled in an east-west orientation.
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 December, 2017, as of December 11, 2017.
CORRECTED this 3rd day of May, 2018, as of December 11, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Julie Spence Prine, Secretary