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 AND CODELL FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 170700429

 

TYPE: SPACING

 

ORDER NO. 407-2423

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on April 30, 2018, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado 80203, upon application for an order to establish an approximate 1,440-acre drilling and spacing unit for Sections 4, 9, and 16, Township 2 North, Range 64 West, 6th P.M., and approve up to 11 horizontal wells in the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Noble Energy, Inc. (Operator No. 100322) (“Noble” 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 February 19, 1992, the Commission entered Order No. 407-87 (amended August 20, 1993) 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, with permitted well locations in accordance with the provisions of Order No. 407-1. Sections 4, 9, and 16, Township 2 North, Range 64 West, 6th P.M., are subject to this Order for the Niobrara and Codell Formations.

 

            5.         On April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule.  Sections 4, 9, and 16, Township 2 North, Range 64 West, 6th P.M., are subject to this Rule for the Niobrara and Codell Formations.

 

            6.         On May 25, 2017, Noble, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order establishing an approximate 1,440-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to 11 horizontal wells in the unit 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 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 2 North, Range 64 West, 6th P.M.

Section 4:        All

Section 9:        All

Section 16:      N˝N˝

 

Applicant stated that the proposed wells shall be located on no more than three multi-well pads within the drilling and spacing unit, subject to Rule 318A, unless the Director grants an exception.

 

7.         On July 3, 2017, amended April 13, 2018, Noble, 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.         On September 1, 2017, Verdad Resources, LLC filed a protest to the Application. On April 12, 2018, Verdad withdrew its Protest.

 

9.         Land testimony and exhibits submitted in support of the Application by Ryan Antonio, Land Manager for Noble, showed that showed that Noble owns an unleased mineral interest and has a right to drill in the Application Lands.            

 

10.       Geoscience testimony and exhibits submitted in support of the Application by Holly Duncan, Geologist for Noble, showed the Codell Formation is present throughout the Application Lands and is approximately 14.4 feet thick, and the Niobrara Formation is present throughout the Application Lands and is approximately 196.8 feet thick.

 

11.       Engineering testimony and exhibits submitted in support of the Application by Mac Pedlow, Reservoir Engineer at Noble, showed that the drainage area for analog horizontal Niobrara Formation wells is estimated at 164.8 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 163.1 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.

 

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.       Noble agreed to be bound by oral order of the Commission. 

 

14.       Based on the facts stated in the verified Application, the protest having been withdrawn, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter to establish an approximate 1,440-acre drilling and spacing unit for Sections 4, 9, and 16, Township 2 North, Range 64 West, 6th P.M., and approve up to 11 horizontal wells in 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 11 horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:

 

Township 2 North, Range 64 West, 6th P.M.

Section 4:        All

Section 9:        All

Section 16:      N˝N˝

 

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 located in the unit, unless the Director grants an exception.

 

3.         The proposed wells shall be located on no more than three multi-well pads within the drilling and spacing unit, 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 10th day of May, 2018, effective as of April 30, 2018.

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

By: ____________________________________     

     Julie Spence Prine, Secretary