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. 191100660 TYPE:  SPACING ORDER NO. 407-2981

REPORT OF THE COMMISSION

            The Commission heard this matter on November 20, 2019, at the University of Northern Colorado, University Center Ball Room, 2101 10^th Avenue, Greeley, Colorado, upon application for an order to vacate Order No. 407-1956, establish an approximate 1,229.54-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to seven horizontal wells within the unit, for production from the Niobrara and Codell Formations, with the productive interval of the wellbores 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 the Director grants an exception:

Township 6 North, Range 64 West, 6^th P.M.

Section 30:      All

Section 31:      All

FINDINGS

The Commission finds as follows:

1. Noble Energy, Inc., (Operator No. 100322) (“Noble” or “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. Pursuant to § 34-60-106(2.5)(a), C.R.S., the Commission shall regulate oil and gas operations in a reasonable manner to protect and minimize adverse impacts to public health, safety, and welfare, the environment, and wildlife resources, and shall protect against adverse environmental impacts on any air, water, soil, or biological resource resulting from oil and gas operations.

5. On February 19, 1992, the Commission entered Order No. 407-87 (amended August 20, 1993) which, among other things, established 80-acre drilling and spacing units for production from the Niobrara and Codell Formations underlying certain lands, with the permitted well locations in accordance with the provisions of Order No. 407-1. The Application Lands are subject to this Order for the Niobrara and Codell Formations.

6. On April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area Special Well Location, Spacing and Unit Designation Rule. The Application Lands are subject to this Rule for the Niobrara and Codell Formations.

7. On May 1, 2017, the Commission entered Order No. 407-1956 which, among other things, established an approximate 1,900.4-acre drilling and spacing unit for certain lands, including portions of the Application Lands, and authorized up to 17 horizontal wells within the unit, for production from the Niobrara and Codell Formations. Section 30 of the Application Lands is subject to this Order.

8. On September 12, 2019, Noble, by its attorneys, filed with the Commission a verified application (“Application”) for an order to vacate Order No. 407-1956, establish an approximate 1,229.54-acre drilling and spacing unit for the Application Lands, and approve up to seven horizontal wells within the unit, for production from the Niobrara and Codell Formations, with the productive interval of the wellbores to be located no closer than 460 feet from 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.

9. Applicant states that any horizontal wells to be drilled under this Application will 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.

10. Noble, 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.

11. Land testimony and exhibits submitted in support of the Application by Ryan Antonio, Land Manager for Noble, show that owns or holds the right to operate a leasehold interest and has a right to drill in the Application Lands.

12. Land testimony further showed that Weld County is the local governmental agency with siting authority for the Application Lands and that Weld County has waived its right to render a disposition regarding its surface permitting prior to the Commission’s approval of the proposed drilling and spacing unit. The regulatory testimony further demonstrates that in developing the Application Lands, Noble’s operations will be conducted in a manner that protects and minimizes adverse impacts to public health, safety, and welfare, the environment, and wildlife resources and will protect against adverse environmental impacts on any air, water, soil, or biological resources.

13. Geologic testimony and exhibits submitted in support of the Application by Errol Lawrence, Senior Geologist at Petrotek Corporation, testifying on behalf of Noble, show that the Niobrara Formation is present throughout the Application Lands, is approximately 300 feet thick and is generally of uniform thickness throughout the Application Lands. The geologic testimony further showed that the Niobrara Formation is both a hydrocarbon source rock and a reservoir, includes the Fort Hays limestone member, also sometimes referred to as the “Fort Hays Formation,” and consists of a succession of chalks and marls. The geologic testimony also showed that the Codell Formation is a sandstone reservoir, is present throughout the Application Lands, is approximately 15 to 18 feet thick, and is generally of uniform thickness throughout the Application Lands.

14. Engineering testimony and exhibits submitted in support of the Application by Lewis Wandke, Senior Engineer at Petrotek Corporation, testifying on behalf of Noble, show that Noble plans to drill a total of seven approximate 9,640-foot horizontal wells, with no more than five wells in the Codell Formation. In addition, the engineering testimony showed that the drainage area for approximate 9,640-foot horizontal Niobrara Formation wells is estimated at 82 acres per well, and an approximate 1,280-acre drilling and spacing unit is therefore not less than the maximum area that can be efficiently, economically and effectively drained by up to 7 horizontal wells producing oil, gas and associated hydrocarbons from the Niobrara Formation. The engineering testimony also showed that the drainage area for approximate 9,640-foot horizontal Codell Formation wells is estimated at 216 acres per well, and an approximate 1,280-acre drilling and spacing unit is therefore not less than the maximum area that can be efficiently, economically and effectively drained by up to five horizontal wells producing oil, gas and associated hydrocarbons from the Codell Formation. The engineering testimony also showed that the proposed wells will be economic.

15. The above-referenced testimony and exhibits show that granting the Application will regulate oil and gas operations in a reasonable manner to protect and minimize adverse impacts to public health, safety, and welfare, the environment, and wildlife resources and will protect against adverse environmental impacts on any air, water, soil, or biological resource resulting from oil and gas operations.

16. The above-referenced testimony and exhibits further 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.

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

18. 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 vacate Order No. 407-1956, establish an approximate 1,229.54-acre drilling and spacing unit for the Application Lands, and approve up to seven horizontal wells (with no more than five horizontal wells to be completed in the Codell Formation) within the unit, for production from the Niobrara and Codell Formations, with the productive interval of the wellbores to be located no closer than 460 feet from 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.

ORDER

IT IS HEREBY ORDERED:

1. Order No. 407-1956 is hereby vacated.

2. An approximate 1,229.54-acre drilling and spacing unit for the Application Lands is hereby established, and up to seven horizontal wells (with no more than five horizontal wells to be completed in the Codell Formation) within the unit are hereby approved for production from the Niobrara and Codell Formations.

3. The productive interval of the wellbores will be located no closer than 460 feet from 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.

4. All wells permitted under this Order will be drilled from no more than two multi-well pad within the Application Lands, or on adjacent lands with surface owner consent, unless the Director grants an exception.

5. No oil and gas operations may be conducted in the Application Lands without an approved Oil and Gas Location Assessment permit(s) (Form 2A) and approved Applications for Permits to Drill (Form 2). The determination of whether an oil and gas location satisfies § 34-60-106(2.5)(a), C.R.S. shall be made by Commission permitting staff in the course of its review and determination of the Form 2A. The Commission’s approval of this drilling and spacing unit does not equate to approval of any proposed Form 2A for an oil and gas location or Form 2.

            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 November 2019, as of November 20, 2019.   

                                                                       OIL AND GAS CONSERVATION COMMISSION

                                                                       OF THE STATE OF COLORADO

                                                                                By__________________________________

Mimi C. Larsen, Secretary