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 AND NIOBRARA FORMATIONS, WATTENBERG FIELD, ADAMS COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 180100082
TYPE: SPACING
ORDER NO. 407-2339
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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 subject additional parties to Order No. 407-2126, which established an approximate 1,261.6-acre drilling and spacing unit for Sections 19 and 20, Township 1 South, Range 67 West, 6th P.M., and authorized up to 26 horizontal wells in the unit in order to efficiently and economically develop and recover the oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.
FINDINGS
The Commission finds as follows:
1. Great Western Operating Company, LLC (Operator No. 10110) (“Great Western” 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, 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 19 and 20, Township 1 South, Range 67 West, 6th P.M., are subject to
this Rule for the production of oil, gas, and associated hydrocarbons from the
Niobrara and Codell Formations.
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 19 and 20, Township 1 South, Range 67 West, 6th P.M., are subject to this Order for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.
6. On July 24, 2017, the Commission entered Order No. 407-2126 which, among other things, established an approximate 1,261.6-acre drilling and spacing unit for Sections 19 and 20, Township 1 South, Range 67 West, 6th P.M., and approved up to 26 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations, provided that the productive interval of each wellbore 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 the Director grants an exception, and that the wells shall be drilled from no more than two multi-well pads in the unit or adjacent thereto, unless the Director grants an exception.
7. On September 11, 2017, the Commission entered Order No. 407-2177 which, among other things, pooled all interests in an approximate 1,261.6 acre drilling and spacing unit established for Sections 19 and 20, Township 1 South, Range 67 West, 6th P.M., for the development and operation of the Niobrara and Codell Formations, 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)(II), C.R.S., are first incurred for the drilling of the Tower LD 19-022HC Well, Tower LD 19-022HN Well, Tower LD 19-059HNX Well, Tower LD 19-062HN Well, Tower LD 19-099HC Well, Tower LD 19-099HN Well, Tower LD 19-102HNX Well, Tower LD 19-139HN Well, Tower LD 19-142HC Well, Tower LD 19-142HN Well, Tower LD 19-179HN Well, Tower LD 19-179HNX Well, Tower LD 19-182HC Well, Tower LD 19-219HN Well, Tower LD 19-222HN Well, Tower LD 19-222HNX Well, Tower LD 19-259HC Well, Tower LD 19-259HN Well, Tower LD 19-262HN Well, Tower LD 19-299HNX Well, Tower LD 19-302HC Well, Tower LD 19-302HN Well, Tower LD 19-339HN Well, Tower LD 19-342HNX Well, Tower LD 19-379HC Well, and the Tower LD 19-379HN Well.
8. On December 11, 2017, the Commission entered Order No. 407-2288 which, among other things, pooled all interests in five approximate 1,080-acre designated horizontal wellbore spacing unit established for portions of Sections 7, 18, and 19, Township 1 South, Range 67 West, 6th P.M., for the development and operation of the Codell and Niobrara Formations, 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)(II), C.R.S., are first incurred for the drilling of the B-Farm LD 18-388HC Well (API No. 05-001-10099), the B-Farm LD 18-392HC Well (API No. 05-001-10094), the B-Farm LD 18-392HN Well (API No. 05-001-10097), the B-Farm LD 18-393HN Well (API No. 05-001-10096), and the B-Farm LD 18-394HNX Well (API No. 05-001-10093).
9. On November 30, 2017, Great Western, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to subject additional parties to Order No. 407-2126, which established an approximate 1,261.6-acre drilling and spacing unit for the lands described below (“Application Lands”), and authorized up to 26 horizontal wells in the unit for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:
Township 1 South, Range 67 West, 6th P.M.
Section 19: All
Section 20: All
10. On or before January 8, 2018, 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 Matthew Acree, Senior Landman for Great Western, showed that Great Western received updated title ownership information on the Application Lands indicating that approximately 500 interested parties did not receive notice of the prior application that resulted in the issuance of Order No. 407-2126, which required Great Western to notify and file an Application to subject the previously unnoticed additional parties to Order No. 407-2126. The additional parties to be subjected to Order No. 407-2126 were listed in bold lettering in Exhibit 6 to the written Land Testimony of Matthew Acree. Land testimony further showed that Great Western continues to hold 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 Niobrara Formation is present throughout the Application Lands, and ranges from approximately 410 to 430 feet in thickness, and that the Codell Formation is present throughout the Application Lands, and ranges from approximately 16 to 23 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 a 9,640-foot Niobrara horizontal well is expected to drain approximately 46 acres, and a 9,640-foot Codell horizontal is expected to drain approximately 163 acres. Accordingly, total drainage from the requested well count (26 wells) should not exceed the 1,261.6-acre unit size, and an approximate 1,261.6-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 Niobrara and Codell 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 subject additional parties to Order No. 407-2126, which established an approximate 1,261.6-acre drilling and spacing unit for Sections 19 and 20, Township 1 South, Range 67 West, 6th P.M., and authorized up to 26 horizontal wells in the unit in order to efficiently and economically develop and recover the oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.
ORDER
IT IS HEREBY ORDERED:
1. The additional parties listed in bold lettering in Exhibit 6 to the written Land Testimony of Matthew Acree are hereby made subject to Order No. 407-2126, which established an approximate 1,261.6-acre drilling and spacing unit for the below described lands and approved up to 26 horizontal wells in the unit for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:
Township 1 South, Range 67 West, 6th P.M.
Section 19: All
Section 20: All
2. The productive interval of each wellbore 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 the Director grants an exception.
3. The wells shall be drilled from no more than two multi-well pads in the unit or adjacent thereto, 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 February, 2018, as of January 29, 2018.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Julie Spence Prince, Secretary