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 NIOBRARA AND CODELL FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 180600466
TYPE: SPACING
ORDER NO. 407-2512 |
REPORT OF THE COMMISSION
The Commission heard this matter on June 18, 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 960-acre drilling and spacing unit for portions of Sections 22 and 23, Township 7 North, Range 63 West, 6th P.M., and approve up to 12 new horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.
FINDINGS
The Commission finds as follows:
1. Mallard Exploration, LLC (Operator No. 10670) (“Mallard” 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. Sections 22 and 23, Township 7 North, Range 63 West, 6th P.M., are subject to this Rule for the Niobrara and Codell Formations.
5. On April 12, 2018 (amended May 4, 2018), Mallard, 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 960-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve 12 horizontal wells 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 7 North, Range 63 West, 6th P.M.
Section 22: S˝, S˝N˝
Section 23: S˝, S˝N˝
Applicant stated that the wells permitted under this Order shall be drilled from no more than two well pads within the unit or on adjacent lands, unless an exception is granted by the Director.
8. Applicant states that there are two approved wellbore spacing units within the unit for the Harvey 7-63-23-5653CDE Well (API No. 05-123-45580) and the Harvey 7-63-23-5760BE Well (API No. 05-123-45581). Applicant will submit a Form 4 Sundry Notice to include the Harvey 7-63-23-5653CDE Well within the proposed unit. The Harvey 7-63-23-5760BE Well will be excluded from the proposed unit.
9. On May 11, 2018, Mallard, 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. Land testimony and exhibits submitted in support of the Application by Jordan Mattson, Vice President of Land for Mallard, showed that owns or holds oil and gas leasehold interests and has a right to operate the leasehold in the Application Lands.
11. Geologic testimony and exhibits submitted in support of the Application by Peter Kubik, Vice President of Exploration and Geology for Mallard, showed the Niobrara Formation is present throughout the Application Lands, ranges from approximately 280 to 310 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, ranges from approximately 8 to 14 feet thick, and is generally of uniform thickness throughout the Application Lands.
12. Engineering testimony and exhibits submitted in support of the Application by Matt Volkmar, President of Mallard, demonstrated that the average estimated drainage per well in the Niobrara Formation is 27 acres and the average estimated drainage per well in the Codell Formation is 96 acres. The Engineering testimony showed that the drilling, completion, and production of up to 12 Niobrara and Codell Formation horizontal wells within the proposed 960-acre drilling and spacing unit will not drain more than the requested approximate 960-acre drilling and spacing unit in the Codell and Niobrara Formations.
13. 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.
14. Mallard agreed to be bound by oral order of the Commission.
15. 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 establish an approximate 960-acre drilling and spacing unit for portions of Sections 22 and 23, Township 7 North, Range 63 West, 6th P.M., and approve up to 12 new horizontal wells within the proposed drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 960-acre drilling and spacing unit for the below-described lands is hereby established, and a total of up to 12 new horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:
Township 7 North, Range 63 West, 6th P.M.
Section 22: S˝, S˝N˝
Section 23: S˝, S˝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 within the unit, unless the Director grants an exception.
3. Any horizontal wells to be drilled shall be drilled from no more than two multi-well pads on the surface of the drilling unit, or on adjacent lands with consent of the landowner, unless the Director grants an exception.
4. Applicant will submit a Form 4 Sundry Notice to include the Harvey 7-63-23-5653CDE Well within the proposed unit.
5. The Harvey 7-63-23-5760BE Well is excluded from the proposed unit.
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 July, 2018, as of June 18, 2018.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By ____________________________________
Julie Spence Prine, Secretary