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 CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 170900530

 

TYPE:  SPACING

 

ORDER NO. 407-2309

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on January 29, 2018, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to establish an approximate 1,183-acre drilling and spacing unit for Section 1, Township 7 North, Range 67 West, 6th P.M. and portions of Section 6, Township 7 North, Range 66 West, 6th P.M., and approve up to 26 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara 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. Section 1, Township 7 North, Range 67 West, 6th P.M. and Section 6, Township 7 North, Range 66 West, 6th P.M. are subject to this Rule for the Codell and Niobrara Formations.

 

5.         On June 30, 2017 (amended on August 3, 2017), Great Western, 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 1,183-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to 26 horizontal wells in the unit, for the production of oil, gas, and associated hydrocarbons from of the Codell and Niobrara 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 7 North, Range 67 West, 6th P.M.

Section 1:        All  

 

Township 7 North, Range 66 West, 6th P.M.

Section 6:        W½; NE¼  

 

6.         Applicant stated 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 28, 2017, Verdad Resources, LLC, by its attorneys, filed a Protest to the Application. On January 16, 2018, Verdad withdrew the Protest.

 

            8.         On August 21, 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.

 

9.         Land testimony and exhibits submitted in support of the Application by Santiago Rodriguez, 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.

 

10.       Geologic testimony and exhibits submitted in support of the Application by Willis Wilcoxon, Geologist for Great Western, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 275 to 350 feet thick, and is generally of uniform thickness throughout the Application Lands. Further testimony showed that the Niobrara Formation is a sequence of chalks, marls and limestones and is a common source of supply.  Geologic testimony further showed that the Codell Formation is present throughout the Application Lands, is approximately 21 to 22 feet thick, is generally of uniform thickness throughout the Application Lands, and is a common source of supply underling the Application Lands.  The geologic testimony showed that the Codell Formation consists of sandstones.

 

11.       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 the drainage area for analog horizontal Niobrara Formation wells is estimated at  27 acres, the drainage area for analog horizontal Codell Formation wells is estimated at  98 acres, and an approximate 1,183-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by 26 horizontal wells producing oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations.

 

12.        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.

 

13.       Great Western agreed to be bound by oral order of the Commission.

 

14.       Based on the facts stated in the verified Application, all protests having been withdrawn, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to establish an approximate 1,183-acre drilling and spacing unit for Section 1, Township 7 North, Range 67 West, 6th P.M. and portions of Section 6, Township 7 North, Range 66 West, 6th P.M., and approve up to 26 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 1,183-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 26 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 67 West, 6th P.M.

Section 1:        All  

 

Township 7 North, Range 66 West, 6th P.M.

Section 6:        W½; NE¼  

 

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, 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 27th day of February, 2018, as of January 29, 2018.          

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By_______________________________________

                 Julie Spence Prince, Secretary