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. 180100108

 

TYPE:  ADDITIONAL WELLS

 

ORDER NO. 407-2478

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on June 11, 2018, at the Lindou Auditorium, Michener Library, University of Northern Colorado, 501 20th Street, Greeley, Colorado, upon application for an order to approve an additional four horizontal wells, for a total of up to 12 horizontal wells, within an approximate 320-acre drilling and spacing unit established by Order No. 407-1316 for portions of Section 34, Township 1 North, Range 66 West, 6th P.M., for the production of oil, gas, associated hydrocarbons from the Niobrara and Codell Formations. 

 

FINDINGS

 

The Commission finds as follows:

 

1.            Ward Petroleum Corporation (Operator No. 10359) (“Ward” or “Applicant”), as applicant herein, is an interested party in the subject matter of the above-referenced hearing.  Great Western Operating Company, LLC (Operator No. 10110) (“Great Western”), as successor to the 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 February 19, 1992 (amended August 20, 1993), the Commission issued Order 407-87, which, among other things, established 80-acre drilling and spacing units for production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations, with the permitted well locations to be in accordance with Order No 407-1.  Section 34, Township 1 North, Range 66 West, 6th P.M., is subject to this Order for the Niobrara and Codell Formations.

 

5.            On April 27, 1988, the Commission adopted Rule 318A, the Greater Wattenberg Special Well Location, Spacing and Unit Designation Rule. Section 34, Township 1 North, Range 66 West, 6th P.M., is subject to this Rule for the Niobrara and Codell Formations.

 

6.            On June 1, 2015, the Commission entered Order 407-1316 which, among other things, established an approximate 320-acre drilling and spacing unit for the N˝ of Section 34, Township 1 North, Range 66 West, 6th P.M., and approved up to eight horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara or Codell Formations.   

 

7.            On November 30, 2017, Ward, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to approve an additional four horizontal wells, for a total of up to 12 horizontal wells, within the approximate 320-acre drilling and spacing unit established by Order No. 407-1316 for the below-described lands (“Application Lands”), for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations:

                       

Township 1 North, Range 66 West, 6th P.M.

Section 34: N˝

 

8.            Applicant stated that any horizontal wells to be drilled under this Application will be drilled from no more than one multi-well pad within the unit or adjacent thereto, unless the Director grants an exception.

 

9.            On February 26, 2018, Ward, 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.

 

10.           On April 26, 2018, Ward and Great Western filed a Joint Motion for Substitution of Party requesting that Great Western be substituted for Ward as the applicant herein for the reason that Great Western acquired certain leasehold interests of Ward in the Application Lands.  On May 2, 2018, Hearing Officer James Rouse entered an order granting the Joint Motion filed by Ward and Great Western and substituted Great Western for Ward as the applicant in this matter. 

 

11.          On May 11, 2018, Great Western filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits.

 

12.          Land testimony and exhibits submitted in support of the Application by Kent Craig, Landman - Rockies for Ward, showed that Ward held oil and gas leasehold interests in the Application Lands. 

 

13.          Geologic testimony and exhibits submitted in support of the Application by Willis E. Wilcoxon, Geologist with Great Western, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 400 to 420 feet thick, and is generally of uniform thickness throughout the Application Lands.  Geologic testimony further showed that the Codell Formation is present throughout the Application Lands, is approximately 18 to 20 feet thick, and is generally of uniform thickness throughout the Application Lands.  The geologic testimony also showed that the Niobrara and Codell Formations are a common source of supply in this area of the Wattenberg Field. 

 

14.          Engineering testimony and exhibits submitted in support of the Application by Lewis Wandke, Senior Engineer for Petrotek Engineering Corporation, testifying on behalf of Great Western, showed that the drainage area for analogue horizontal Niobrara Formation wells is approximately 21 acres, that the drainage area for analogue horizontal Codell Formation wells is approximately 89 acres, and an approximate 320-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by 12 horizontal wells producing oil, gas and associated hydrocarbons from the Niobrara  and Codell Formations.

 

15.          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.

 

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

 

17.          Based on the facts stated in the 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 approve an additional four horizontal wells, for a total of up to 12 horizontal wells, within an approximate 320-acre drilling and spacing unit established for the N˝ of Section 34, Township 1 North, Range 66 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations. 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.            An additional four horizontal wells, for a total of up to 12 horizontal wells, within an approximate 320-acre drilling and spacing unit established by Order 407-1316 for the below-described lands are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:

 

Township 1 North, Range 66 West, 6th P.M.

Section 34: N˝

           

2.            The productive interval of the wellbore shall be located no closer than 460-feet from the unit boundaries, and no closer than 150-feet from the productive interval of any well producing from the Niobrara and/or Codell Formations, unless the Director grants an exception.

 

3.            All proposed wells shall be located from no more than one multi-well pad within the drilling and spacing unit, or from a legal location on adjacent 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 2nd day of July, 2018, as of June 11, 2018.            

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________

 Julie Spence Prine, Secretary