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, FORT HAYS, CODELL AND CARLILE FORMATIONS, UNNAMED FIELD, WELD COUNTY, COLORADO

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CAUSE NOS. 407 & 535

 

DOCKET NO. 180300214

 

TYPE: SPACING

 

ORDER NOS. 407-2419 &

                        535-988

 

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on March 19, 2018, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to make Order Nos. 407-1938 and 535-773, which established an approximate 1,280-acre drilling and spacing unit for Section 35, Township 8 North, Range 67 West, 6th P.M. and Section 2, Township 7 North, Range 67 West, 6th P.M., and approved eight horizontal wells within the unit for the production of oil, gas, and associated hydrocarbons from the Niobrara, Fort Hays, Codell, and Carlile Formations, applicable to 11 previously unnoticed parties.

FINDINGS

 

The Commission finds as follows:

 

1.         Enerplus Resources (USA) Corporation (Operator No. 10177) (“Enerplus” 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.         Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that, on unspaced lands, wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and located not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply.  Section 35, Township 8 North, Range 67 West, 6th P.M. and Section 2, Township 7 North, Range 67 West, 6th P.M., are subject to this Rule for the Niobrara, Fort Hays, Codell, and Carlile Formations

5.         On March 20, 2017, the Commission entered Order Nos. 407-1938 and 535-773, which, among other things, established a 1,280-acre drilling and spacing unit for Section 35, Township 8 North, Range 67 West, 6th P.M. and Section 2, Township 7 North, Range 67 West, 6th P.M., and approved eight horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara, Fort Hays, Codell, and Carlile Formations.  

 

  6.       On January 18, 2018, Enerplus, by its attorneys, filed a verified Application (“Application”) pursuant to §34-60-116, C.R.S., for an order to make Order Nos. 407-1938 and 535-773, which established an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approved eight horizontal wells within the unit for the production of oil, gas, and associated hydrocarbons from the Niobrara, Fort Hays, Codell, and Carlile Formations, applicable to previously unnoticed interest owners:

Township 8 North, Range 67 West, 6th P.M.

Section 35:      All

 

Township 7 North, Range 67 West, 6th P.M.

Section 2:        All

 

7.         On February 26, 2018, Applicant, 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 Sean Gallagher, Senior Landman for Enerplus, showed that the following 11 interested parties within the established drilling and spacing unit were inadvertently not provided notice of the underlying application pursuant to § 34-60-108, C.R.S. and Commission Rule 507.b.(1): 


 

a.    Frank L. Baiamonte & Diana L. Baiamonte

Co-Trustees of Trust No.1, created by that certain Trust Declaration and Mineral Deed, dated December 28, 1951, recorded at Reception No. 1121158 December 28, 1951

 

b.    Frank L. Baiamonte & Diana L. Baiamonte

Co-Trustees of Trust No.1, created by that certain Trust Declaration and Mineral Deed, dated December 28, 1951, recorded at Reception No. 1121158 December 28, 1951

 

c.    Frank L. Baiamonte as successor Trustee of Trust No. 2, created by that certain Trust Declaration and Mineral Deed, dated April 24, 1956, recorded at Reception No. 1244806 on January 7, 1957

 

d.    Frank L. Baiamonte & Diana L. Baiamonte

Co-Trustees of Trust No.3, created by that certain Trust Declaration and Mineral Deed, dated October 7, 1963, recorded at Reception No. 1419131 October 15, 1963

 

e.    Frank L. Baiamonte & Diana L. Baiamonte

Co-Trustees of Trust No.3, created by that certain Trust Declaration and Mineral Deed, dated October 7, 1963, recorded at Reception No. 1419131 October 15, 1963

 

f.     Doug Fry and Jeri Fry, as Joint Tenants

 

g.    Wyotex Drilling Ventures, LLC

 

h.    Cobalt Oil and Gas, LLC

 

i.      Chesapeake Exploration, LLC

 

j.      Chesapeake Exploration, LLC

 

k.    OOGC America, Inc., c/o CNOOC International Limited

 

Based upon the examination of the relevant documents and records, the previously unnoticed interested parties within the drilling and spacing unit have now been duly served with the Application and associated Notice of Hearing. 

                                                 

9.         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.

 

10.       Enerplus agreed to be bound by oral order of the Commission.

 

11.       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 make Order Nos. 407-1938 and 535-773, which established an approximate 1,280-acre drilling and spacing unit for Section 35, Township 8 North, Range 67 West, 6th P.M. and Section 2, Township 7 North, Range 67 West, 6th P.M. and approved eight horizontal wells within the unit for the production of oil, gas, and associated hydrocarbons from the Niobrara, Fort Hays, Codell, and Carlile Formations, applicable to 11 previously unnoticed parties.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, Order Nos. 407-1938 and 535-773, which established an approximate 1,280-acre drilling and spacing unit for Section 35, Township 8 North, Range 67 West, 6th P.M. and Section 2, Township 7 North, Range 67 West, 6th P.M. and approved eight horizontal wells within the unit for the production of oil, gas, and associated hydrocarbons from the Niobrara, Fort Hays, Codell, and Carlile Formations, are hereby made applicable to the following 11 previously unnoticed parties:

 

a.    Frank L. Baiamonte & Diana L. Baiamonte

Co-Trustees of Trust No.1, created by that certain Trust Declaration and Mineral Deed, dated December 28, 1951, recorded at Reception No. 1121158 December 28, 1951

 

b.    Frank L. Baiamonte & Diana L. Baiamonte

Co-Trustees of Trust No.1, created by that certain Trust Declaration and Mineral Deed, dated December 28, 1951, recorded at Reception No. 1121158 December 28, 1951

 

c.    Frank L. Baiamonte as successor Trustee of Trust No. 2, created by that certain Trust Declaration and Mineral Deed, dated April 24, 1956, recorded at Reception No. 1244806 on January 7, 1957

 

d.    Frank L. Baiamonte & Diana L. Baiamonte

Co-Trustees of Trust No.3, created by that certain Trust Declaration and Mineral Deed, dated October 7, 1963, recorded at Reception No. 1419131 October 15, 1963

 

e.    Frank L. Baiamonte & Diana L. Baiamonte

Co-Trustees of Trust No.3, created by that certain Trust Declaration and Mineral Deed, dated October 7, 1963, recorded at Reception No. 1419131 October 15, 1963

 

f.     Doug Fry and Jeri Fry, as Joint Tenants

 

g.    Wyotex Drilling Ventures, LLC

 

h.    Cobalt Oil and Gas, LLC

 

i.      Chesapeake Exploration, LLC

 

j.      Chesapeake Exploration, LLC

 

k.    OOGC America, Inc., c/o CNOOC International Limited

 

2.         The productive interval of any wellbore will be located no closer than 600 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore within the unit, unless an exception is granted by the Director.

 

3.        The proposed wells shall be located on no more than two multi-well pads on the surface of the drilling unit, or on adjacent lands with consent of the landowner, unless an exception is granted by the Director.

 

4.         Enerplus shall submit a Communitization Agreement to the BLM for any existing wells within 60 days of the entry of this Order.  Enerplus shall submit a Communitization Agreement to the BLM at least 90 days before the anticipated date of first production (as defined in the Commission’s Rules) from the initial well drilled within the drilling and spacing unit for the above described lands.

 

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 17th day of April, 2018, as of March 19, 2018.

           

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By_______________________________________

     Julie Spence Prine, Secretary