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. 180900693

 

TYPE: SPACING

 

ORDER NO. 407-2606

 

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 640-acre drilling and spacing unit for portions of Sections 5 and 6, Township 4 North, Range 63 West, 6th P.M., and approve up to five 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.            HighPoint Operating Corporation (Operator No. 10071) (“HighPoint” 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 5 and 6, Township 4 North, Range 63 West, 6th P.M., are subject to this Rule for the Niobrara and Codell Formations.

 

5.            On July 19, 2018, HighPoint, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 640-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to five 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 any 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 4 North, Range 63 West, 6th P.M.

Section 5:        S½ 

Section 6:        S½ 

 

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 August 17, 2018, HighPoint, 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 Leslie Mann, Landman for HighPoint, showed that HighPoint 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 Dan Moore, Senior Geologist for HighPoint, showed the Niobrara Formation is present throughout the Application Lands, is approximately 290 to 320 feet thick and is comprised of a sequence of chalks and limestones. The Codell Formation is present throughout the Application Lands, is approximately 12 to 15 feet thick, and is comprised of sandstone and siltstone.

 

9.            Engineering testimony and exhibits submitted in support of the Application by Sean Stewart, Senior Reservoir Engineer at HighPoint, showed that the drainage area for analog horizontal Niobrara Formation wells is estimated at 54 acres, and an approximate 640-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 95 acres, and an appropriate 640-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.          HighPoint 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 640-acre drilling and spacing unit for portions of Sections 5 and 6, Township 4 North, Range 63 West, 6th P.M., and approve up to five 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 640-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to five horizontal wells within the unit are hereby approved, for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations:

 

Township 4 North, Range 63 West, 6th P.M.

Section 5:        S½ 

Section 6:        S½ 

 

2.         The productive interval of any 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