BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE APPLICATION OF NOBLE ENERGY INC. FOR AN ORDER
ESTABLISHING ONE APPROXIMATE 320-ACRE WELLBORE SPACING UNIT FOR THE
CODELL-NIOBRARA FORMATION IN THE E½ E½ OF SECTION 35, AND THE W½ W½ OF SECTION
36, TOWNSHIP 6 NORTH, RANGE 64 WEST, 6TH P.M., IN THE WATTENBERG
FIELD, WELD COUNTY, COLORADO. |
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CAUSE NO. 407
ORDER NO. 407-706
DOCKET NO. 1207-SP-76 |
REPORT OF THE COMMISSION
The Commission heard this matter on October 1, 2012, in the Routt County Justice
Center, 1955 Shield Drive, Steamboat Springs, Colorado, upon application for an
order to establish an approximate 320-acre wellbore spacing unit for Sections 35
and 36, Township 6 North, Range 64 West, 6th P.M., for the production
of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation.
FINDINGS
The Commission finds as follows:
1.
Noble Energy Inc. (“Noble” 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 December 19, 1983, the Commission
issued Order No. 407-1 (amended March 29, 2000 in accordance with Order No.
407-17, entered November 18, 1985) which, among other things, established
80-acre drilling and spacing units for the production of oil, gas and associated
hydrocarbons from the Codell Formation, with the unit to be designated by the
operator drilling the first well in the quarter section. The permitted well shall be located
in the center of either 40-acre tract within the unit with a tolerance of 200
feet in any direction. The operator
shall have the option to drill an additional well on the undrilled 40-acre tract
in each 80-acre drilling and spacing unit.
Sections 35 and 36, Township 6 North, Range 64 West, 6th
P.M. are subject to this Order for the Codell-Niobrara Formation.
5.
On February 19, 1992, the Commission issued Order No. 407-87 (amended
August 20, 1993) 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, with the permitted well locations in
accordance with the provisions of Order No. 407-1.
Sections 35 and 36, Township 6 North, Range 64 West, 6th P.M. are
subject to this Order for the Codell-Niobrara Formation.
6.
On April 27, 1988, the Commission adopted Rule 318A which, among other
things, allowed certain drilling locations to be utilized to drill or twin a
well, deepen a well or recomplete a well and to commingle any or all Cretaceous
Age Formations from the base of the Dakota Formation to the surface. Rule 318A
supersedes all prior Commission drilling and spacing orders affecting well
location and density requirements of Greater Wattenberg Area wells. On December 5, 2005, Rule 318A was
amended to, among other things, allow interior infill and boundary wells to be
drilled and wellbore spacing units to be established. On August 8, 2011,
Rule 318A was again amended, among other things, to address drilling of
horizontal wells.
Sections 35 and 36, Township 6
North, Range 64 West, 6th P.M. are subject to Rule 318A.
7.
On May 10, 2012, Noble, by its attorneys, filed with the Commission
pursuant to § 34-60-116 C.R.S., a verified application (“Application”) for an
order to establish an approximate 320-acre wellbore spacing unit for the
below-described lands (“Application Lands”), and approve one horizontal well
within the unit, for the production of oil, gas and associated hydrocarbons from
the Codell-Niobrara Formation, with the treated interval of the wellbore to be
located no closer than 460 feet from the boundary of the unit, without exception
being granted by the Director:
Township 6 North, Range 64 West, 6th P.M.
Section 35: E½ E½
Section 36: W½ W½
8.
On June 26, 2012, Noble requested, and Commission Staff granted, a
continuance to the August 20, 2012 hearing.
9.
On August 1, 2012, Noble requested, and Commission Staff granted, a
continuance to the October 1, 2012 hearing.
10. On
September 18, 2012, 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 Joseph H.
Lorenzo, Senior Land Manager for Noble, showed that Noble has a 100% leasehold
interest in the Application Lands.
12.
Engineering testimony and exhibits submitted in support of the Application by
Caleb Ring, Engineer for Noble, showed the ultimate recovery for each vertical
well to be approximately 0.8%, using an average of 1.44 BCFE. This is based on a
calculated original gas-in place of 172.4 BCFE.
Further testimony showed that horizontal wells would increase the
recovery factor to approximately 3.5% and that the additional reserves would not
be fully recovered without the application of the horizontal well technology,
and thus the proposed wells will more effectively drain the reservoir.
13.
Geologic testimony and exhibits submitted in support of the Application
by Larry Amateis, Senior Geologist for Noble,
showed the Niobrara Formation is both a
hydrocarbon source rock and a reservoir.
Further testimony included an isopach map of the Niobrara
Formation which showed total thickness ranged from approximately 255 to 305 feet
under the Application Lands.
14. 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.
15.
Noble agreed to be bound by oral order of the Commission.
16.
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 320-acre
wellbore spacing unit for Sections 35 and 36, Township 6 North, Range 64 West, 6th
P.M., and authorize one horizontal well within the unit, for the production of
oil, gas and associated hydrocarbons from the Codell-Niobrara Formation.
ORDER
NOW, THEREFORE IT IS ORDERED, that an approximate 320-acre wellbore spacing unit
for the below-described lands, is hereby established, and one horizontal well
within the unit, is hereby approved, for the production of oil, gas and
associated hydrocarbons from the Codell-Niobrara Formation, with the treated
interval of the wellbore to be located no closer than 460 feet from the boundary
of the unit, without exception being granted by the Director:
Township 6 North, Range 64 West, 6th P.M.
Section 35: E½ E½
Section 36: W½ W½
IT IS FURTHER ORDERED,
that the provisions contained in the above order shall become effective
immediately.
IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after
notice and hearing, to alter, amend or repeal any and/or all of the above
orders.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the
Commission considers this Order to be final agency action for purposes of
judicial review within 30 days after the date this Order is mailed by the
Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission
of this Order is not required prior to the filing for judicial review.
ENTERED this_____day of
October, 2012, as of October 1, 2012.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary