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 CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 180400306

 

TYPE: POOLING

 

ORDER NO. 407-2534

REPORT OF THE COMMISSION

 

The Commission heard this matter on July 30, 2018, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to pool all interests underlying two approximate 360-acre, two approximate 480-acre, four approximate 640-acre, two approximate 680-acre, two approximate 720-acre designated horizontal wellbore spacing units established for portions of Sections 13, 14, 23, 24, 25, and 26, Township 3 North, Range 65 West, 6th P.M., for the development and operation of the Codell and Niobrara Formations, and to subject any non-consenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., 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), C.R.S., are first incurred for the drilling of the Hurley H26-712 Well, Hurley H26-717 Well, Hurley H26-724 Well, Hurley H26-730 Well, Hurley H26-736 Well, Hurley H26-743 Well, Hurley H26-750 Well, Hurley H26-756, Hurley H26-762, Hurley H26-768 Well, Hurley H26-776 Well, and Hurley H26-783 Well.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Noble Energy, Inc. (Operator No. 100322) (“Noble” or “Applicant”) is a corporation duly authorized to conduct business in the State of Colorado, and is a registered operator in good standing with the Commission.

 

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 13, 14, 23, 24, 25, and 26, Township 3 North, Range 65 West, 6th P.M., are subject to Rule 318A for the Codell and Niobrara 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 vertical and directional well locations in accordance with the provisions of Order No. 407-1. Sections 13, 14, 23, 24, 25, and 26, Township 3 North, Range 65 West, 6th P.M., are subject to this Order for the Codell and Niobrara Formations. 

 

7.         On February 27, 2018, Noble, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to pool all interests within two approximate 360-acre, two approximate 480-acre, four approximate 640-acre, two approximate 680-acre, two approximate 720-acre designated horizontal wellbore spacing units established for the below-described lands (“Application Lands”), for the development and operation of the Codell and Niobrara Formations and to subject any non-consenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., 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), C.R.S., are first incurred for the drilling of the Hurley H26-712 Well (API No. 05-123-46770), Hurley H26-717 Well (API No. 05-123-46765), Hurley H26-724 Well (API No. 05-123-46769), Hurley H26-730 Well (API No. 05-123-46763), Hurley H26-736 Well (API No. 05-123-46762), Hurley H26-743 Well (API No. 05-123-46761), Hurley H26-750 Well (API No. 05-123-46768), Hurley H26-756 Well (API No. 05-123-46772), Hurley H26-762 Well (API No. 05-123-46767), Hurley H26-768 Well (API No. 05-123-46766), Hurley H26-776 Well (API No. 05-123-46771), and Hurley H26-783 Well (API No. 05-123-46764) (“Wells”):

 

Township 3 North, Range 65 West, 6th P.M.

            Section 13:      W½SW¼

            Section 14:      E½SE¼

            Section 23:      E½E½ 

            Section 24:      W½W½ 

            Section 25:      W½NW¼

            Section 26:      E½NE¼

 

            WSU No. 1 (640 acres, more or less)

Hurley H26-712 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      E½SE¼

            Section 23:      E½E½ 

            Section 24:      W½SW¼    

            Section 25:      W½NW¼

            Section 26:      E½NE¼

 

WSU No. 2 (480 acres, more or less)

Hurley H26-717 - Niobrara Formation

 

           

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      SE¼

            Section 23:      E½  

            Section 26:      NE¼

 

            WSU No. 3 (640 acres, more or less)

Hurley H26-724 - Niobrara Formation

 

WSU No. 4 (640 acres, more or less)

Hurley H26-730 - Niobrara Formation

 

WSU No. 5 (640 acres, more or less)

Hurley H26-736 - Niobrara Formation

           

           

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      W½SE¼

            Section 23:      W½E½; E½SW¼

            Section 26:      W½NE¼; E½NW¼

 

WSU No. 6 (480 acres, more or less)

Hurley H26-743 - Niobrara Formation           

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      W½SE¼; E½SW¼

            Section 23:      W½E½; E½W½

            Section 26:      W½NE¼; E½NW¼; NW¼SE¼; NE¼SW¼

 

            WSU No. 7 (720-acres, more or less)

Hurley H26-750 - Niobrara Formation

           

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      W½SE¼; E½SW¼

            Section 23:      W½E½; E½W½

            Section 26:      W½NE¼; E½NW¼; NE¼SW¼

 

WSU No. 8 (680 acres, more or less)

Hurley H26-756 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      E½SW¼

            Section 23:      E½W½

            Section 26:      E½NW¼; NE¼SW¼

 

            WSU No.  9 (360 acres, more or less)

Hurley H26-762 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      SW¼

            Section 23:      W½

            Section 26:      NW¼; N½SW¼

 

            WSU No. 10 (720 acres, more or less)

Hurley H26-768 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      SW¼

            Section 23:      W½

            Section 26:      NW¼; NW¼SW¼

 

            WSU No. 11 (680 acres, more or less)

Hurley H26-776 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      W½SW¼

            Section 23:      W½W½ 

            Section 26:      W½NW¼; NW¼SW¼

 

            WSU No. 12 (360 acres, more or less)

Hurley H26-783 - Niobrara Formation

 

8.         On March 23, 2018 (Supplemented on June 28, 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.

 

9.         On April 13, 2018, Incline Niobrara Partners (“Incline”) filed a Protest to the Application.  On June 27, 2018, Incline withdrew its protest to the Application.

 

10.       Land testimony and exhibits submitted in support of the Application by Robert Lee, Landman for Applicant, showed that all interest owners of an oil and gas interest in the tracts to be pooled were timely notified of the Application and Noble owns 100% of the working interest within the unit. Further testimony also showed Commission Rule 530.b and c. do not apply as there are no unleased interest or unleased mineral interest owners subject to the Application and Applicant is not seeking cost recovery pursuant to 34-60-116(7), C.R.S.

 

11.       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.

 

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

 

13.       Based on the facts stated in the verified Application, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to pool all interests underlying two approximate 360-acre, two approximate 480-acre, four approximate 640-acre, two approximate 680-acre, two approximate 720-acre designated horizontal wellbore spacing units established for portions of Sections 13, 14, 23, 24, 25, and 26, Township 3 North, Range 65 West, 6th P.M., for the development and operation of the Codell and Niobrara Formations, and to subject any non-consenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., 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), C.R.S., are first incurred for the drilling of the Hurley H26-712 Well, Hurley H26-717 Well, Hurley H26-724 Well, Hurley H26-730 Well, Hurley H26-736 Well, Hurley H26-743 Well, Hurley H26-750 Well, Hurley H26-756, Hurley H26-762, Hurley H26-768 Well, Hurley H26-776 Well, and Hurley H26-783 Well.

 

 

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, all interests in the two approximate 360-acre, two approximate 480-acre, four approximate 640-acre, two approximate 680-acre, two approximate 720-acre designated horizontal wellbore spacing units established for the below-described lands, are hereby pooled, for the development and operation of the Codell and Niobrara Formations, effective as of the date of the Application, for the drilling of the Hurley H26-712 Well (API No. 05-123-46770), Hurley H26-717 Well (API No. 05-123-46765), Hurley H26-724 Well (API No. 05-123-46769), Hurley H26-730 Well (API No. 05-123-46763), Hurley H26-736 Well (API No. 05-123-46762), Hurley H26-743 Well (API No. 05-123-46761), Hurley H26-750 Well (API No. 05-123-46768), Hurley H26-756 Well (API No. 05-123-46772), Hurley H26-762 Well (API No. 05-123-46767), Hurley H26-768 Well (API No. 05-123-46766), Hurley H26-776 Well (API No. 05-123-46771), and Hurley H26-783 Well (API No. 05-123-46764) (“Wells”):

 

Township 3 North, Range 65 West, 6th P.M.

            Section 13:      W½SW¼

            Section 14:      E½SE¼

            Section 23:      E½E½ 

            Section 24:      W½W½ 

            Section 25:      W½NW¼

            Section 26:      E½NE¼

 

            WSU No. 1 (640 acres, more or less)

Hurley H26-712 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      E½SE¼

            Section 23:      E½E½ 

            Section 24:      W½SW¼    

            Section 25:      W½NW¼

            Section 26:      E½NE¼

 

WSU No. 2 (480 acres, more or less)

Hurley H26-717 - Niobrara Formation

 

           

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      SE¼

            Section 23:      E½  

            Section 26:      NE¼

 

            WSU No. 3 (640 acres, more or less)

Hurley H26-724 - Niobrara Formation

 

WSU No. 4 (640 acres, more or less)

Hurley H26-730 - Niobrara Formation

 

WSU No. 5 (640 acres, more or less)

Hurley H26-736 - Niobrara Formation

           

           

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      W½SE¼

            Section 23:      W½E½; E½SW¼

            Section 26:      W½NE¼; E½NW¼

 

WSU No. 6 (480 acres, more or less)

Hurley H26-743 - Niobrara Formation           

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      W½SE¼; E½SW¼

            Section 23:      W½E½; E½W½

            Section 26:      W½NE¼; E½NW¼; NW¼SE¼; NE¼SW¼

 

            WSU No. 7 (720-acres, more or less)

Hurley H26-750 - Niobrara Formation

           

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      W½SE¼; E½SW¼

            Section 23:      W½E½; E½W½

            Section 26:      W½NE¼; E½NW¼; NE¼SW¼

 

WSU No. 8 (680 acres, more or less)

Hurley H26-756 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      E½SW¼

            Section 23:      E½W½

            Section 26:      E½NW¼; NE¼SW¼

 

            WSU No.  9 (360 acres, more or less)

Hurley H26-762 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      SW¼

            Section 23:      W½

            Section 26:      NW¼; N½SW¼

 

            WSU No. 10 (720 acres, more or less)

Hurley H26-768 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      SW¼

            Section 23:      W½

            Section 26:      NW¼; NW¼SW¼

 

            WSU No. 11 (680 acres, more or less)

Hurley H26-776 - Niobrara Formation

 

 

            Township 3 North, Range 65 West, 6th P.M.

            Section 14:      W½SW¼

            Section 23:      W½W½ 

            Section 26:      W½NW¼; NW¼SW¼

 

            WSU No. 12 (360 acres, more or less)

Hurley H26-783 - Niobrara Formation

 

2.         The production obtained from the wellbore spacing unit shall be allocated to each owner in the unit on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within the wellbore spacing unit; each owner of an interest in the wellbore spacing unit shall be entitled to receive its share of the production of the Wells located on the wellbore spacing unit applicable to its interest in the wellbore spacing unit.

 

3.         Nothing in this order is intended to conflict with §34-60-116, C.R.S., as amended.  Any conflict that may arise shall be resolved in favor of the statute.

 

4.         In accordance with §34-60-116(7)(a)(III), C.R.S., a nonconsenting owner is immune from liability for costs arising from spills, releases, damage, or injury resulting from oil and gas operations on the designated horizontal wellbore spacing unit.

 

5.          The designated horizontal wellbore spacing units described above shall be considered drilling and spacing units established by the Commission for purposes of Rule 530.a.

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 22nd day of August, 2018, as of July 30, 2018.

           

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By____________________________________

Julie Spence Prine, Secretary