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 AND GREENHORN FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 171200887
TYPE: SPACING
ORDER NO. 407-2301
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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: 1) amend Order No. 407-1824 to add the Greenhorn Formation to an approximate 1,120-acre drilling and spacing unit established for portions of Sections 25 and 26, Township 6 North, Range 67 West, 6th P.M., and 2) amend Order No. 407-1880 to add the Greenhorn Formation to the reduced subsurface setbacks approved for the drilling and spacing unit established for portions of Sections 25 and 26, Township 6 North, Range 67 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Codell, Niobrara, and Greenhorn Formations.
FINDINGS
The Commission finds as follows:
1. Great Western Operating Company, LLC (Operator No. 10110) (“Great Western” 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 25 and 26, Township
6 North, Range 67 West, 6th P.M., are subject to this Rule for the
Greenhorn Formation.
5. On February 19, 1992 (amended August 20, 1993), the Commission entered Order No. 407-87 which, among other things, established 80-acre drilling and spacing units for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations underlying certain lands, with permitted well locations in accordance with the provisions of Order No. 407-1. Sections 25 and 26, Township 6 North, Range 67 West, 6th P.M., are subject to this Order for the Greenhorn Formation.
6. On October 24, 2016, the Commission entered Order No. 407-1824 which, among other things, established an approximate 1,120-acre drilling and spacing unit for portions of Sections 25 and 26, Township 6 North, Range 67 West, 6th P.M., and approved up to 21 horizontal wells for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations, providing that the productive interval of the wellbore of each well shall be no closer than 460 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located within the unit, unless an exception is granted by the Director, and providing that the wells shall be drilled from no more than two well pads, unless an exception is granted by the Director.
7. On January 30, 2017, the Commission entered Order No. 407-1880 which, among other things, modified the setbacks for the approximate 1,120-acre drilling and spacing unit established by Order No. 407-1824 for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations, such that the productive interval of any permitted well within the unit be no less than 460 feet from the northern, southern and western boundaries of the unit, and no less than 150 feet from the eastern boundary of the unit, without exception being granted by the Director.
8. On March 20, 2017, the Commission entered Order No. 407-1915 which, among other things, pooled all interests within the approximate 1,120-acre drilling and spacing unit established for portions of Sections 25 and 26, Township 6 North, Range 67 West, 6th P.M., for the development and operation of the Codell and Niobrara Formations, and subjected any non-consenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., effective as of the earlier of the date of the Application, or the date that any of the costs specified in §34-60-116(7)(b), C.R.S., are first incurred for the drilling of certain defined “Kodak North” and “Kodak South” wells.
9. On October 12, 2017, Great Western, by its attorneys, filed a verified Application (“Application”) pursuant to §34-60-116, C.R.S., for an order to: 1) amend Order No. 407-1824 to add the Greenhorn Formation to an approximate 1,120-acre drilling and spacing unit established for the below-described lands (“Application Lands”), and 2) to amend Order No. 407-1880 to provide that the productive interval any horizontal well in the Greenhorn Formation shall be no closer than 460 feet from the northern, southern and western boundaries of the unit and 150 feet from the eastern boundary of the unit, and not less than 150 feet from the treated interval of another well within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell, Niobrara and Greenhorn Formations, and authorize up to two well pads in the unit subject to Rule 318A or adjacent thereto, unless an exception is granted by the Director:
Township 6 North, Range 67 West, 6th P.M.
Section 25: All
Section 26: E˝; E˝W˝
10. On November 20, 2017, Great Western, 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.
11. Land testimony and exhibits submitted in support of the Application by Michael Tucker, Senior Landman for Great Western, showed that Great Western holds oil and gas leasehold interests and has a right to drill in the Application Lands.
12. Geologic testimony and exhibits submitted in support of the Application by Willis Wilcoxon, Geologist for Great Western, showed that the Greenhorn Formation is present throughout the Application Lands, and ranges from approximately 230 to 238 feet in thickness.
13. Engineering testimony and exhibits submitted in support of the Application by Lewis Wandke, Senior Engineer for Petrotek Engineering Corporation retained by Great Western, showed that an,360’ Greenhorn horizontal well is expected to drain approximately 117 acres. Accordingly, total drainage from the requested well count (21) should not exceed the 1,120-acre unit size, and an approximate 1,120-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by the horizontal wells producing oil, gas, and associated hydrocarbons from the Greenhorn Formations.
14. 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.
15. Great Western agreed to be bound by oral order of the Commission.
16. 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: 1) amend Order No. 407-1824 to add the Greenhorn Formation to an approximate 1,120-acre drilling and spacing unit established for the below-described Application Lands, and 2) amend Order No. 407-1880 to add the Greenhorn Formation to the reduced subsurface setbacks approved for the below-described Application Lands, for the production of oil, gas, and associated hydrocarbons from the Codell, Niobrara, and Greenhorn Formations.
ORDER
IT IS HEREBY ORDERED:
1. Order No. 407-1824 is hereby amended to add the Greenhorn Formation to an approximate 1,120-acre drilling and spacing unit established for the below-described lands, for the production of oil, gas, and associated hydrocarbons from of the Codell, Niobrara, and Greenhorn Formations:
Township 6 North, Range 67 West, 6th P.M.
Section 25: All
Section 26: E˝; E˝W˝
2. Order No. 407-1880 is hereby amended to provide that the productive interval any horizontal well in the Codell, Niobrara, and Greenhorn Formations shall be no closer than 460 feet from the northern, southern and western boundaries of the unit and 150 feet from the eastern boundary of the unit, and not less than 150 feet from the productive interval of another well within the unit, unless the Director grants an exception:
Township 6 North, Range 67 West, 6th P.M.
Section 25: All
Section 26: E˝; E˝W˝
3. The wells shall be drilled from no more than two multi-well pads in the unit subject to Rule 318A or adjacent thereto, consistent with Order No. 407-1824.
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 10th day of January, 2018, as of December 11, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By_______________________________________
Julie Spence Prince, Secretary