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, ADAMS COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 180600434

 

TYPE: SPACING

 

ORDER NO. 407-2589

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on September 17, 2018, at the Garfield County Sheriff’s Annex - Rifle, 106 County Road 333-A, Rifle, Colorado, upon application for an order to establish an approximate 1,280-acre drilling and spacing unit for Sections 10 and 15, Township 2 South, Range 66 West, 6th P.M., and approve up to 16 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.            Extraction Oil and Gas, Inc., (Operator No. 10459) (“Extraction” 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 April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule.  Sections 10 and 15, Township 2 South, Range 66 West, 6th P.M., are subject to this Rule for the Niobrara and Codell Formations.

 

5.            On April 12th, 2018, Extraction, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to 16 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, unless an exception is granted by the Director:

Township 2 South, Range 66 West, 6th P.M.

Section 10:      All

Section 15:      All

 

Applicant stated that all horizontal wells will be drilled from no more than one multi-well pad located within the unit, or at a legal location on adjacent lands, unless an exception is granted by the Director.

 

6.            On July 9, 2018, and supplemented on August 27, 2018, Extraction, 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.

 

7.            Land testimony and exhibits submitted in support of the Application by Pam Kingery, Land Advisor for Extraction, showed that Extraction holds oil and gas leasehold interests and has a right to drill in the Application Lands. 

 

8.            Geologic testimony and exhibits submitted in support of the Application by Alicia Branch, Geologist for Extraction, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 252 to 265 feet thick. Geologic testimony also showed that the Niobrara Formation is a series of chalks and marls. The geologic testimony also showed that the Codell Formation is present throughout the Application Lands, is approximately 11 to 14 feet thick. Geologic testimony also showed that the Codell Formation is made up of sandstone. Further testimony showed there are three productive zones in the Niobrara Formation; zones A, B, and C.

 

9.            Engineering testimony and exhibits submitted in support of the Application by Spencer Crouch, Engineer for Extraction, showed that the drainage area for 12 analog horizontal Niobrara Formation wells is estimated at 104 acres, and an approximate 1,280-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 four analog horizontal Codell Formation wells is estimated at 201 acres, and an appropriate 1,280-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. 

 

10.          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.

 

11.          Extraction agreed to be bound by oral order of the Commission.

 

12.          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 1,280-acre drilling and spacing unit for Sections 10 and 15, Township 2 South, Range 66 West, 6th P.M., and approve up to 16 horizontal wells within 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 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 16 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 South, Range 66 West, 6th P.M.

Section 10:      All

Section 15:      All

 

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.         All wells approved under this Order shall be drilled from no more than one multi-well pad within the Application Lands, or on lands adjacent thereto with landowner consent, 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 October, 2018, as of September 17, 2018.       

 

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By___________________________________         

                 Julie Spence Prine, Secretary