BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

IN THE MATTER OF THE APPLICATION OF BILL BARRETT CORPORATION FOR AN ORDER TO APPROVE UP TO EIGHT HORIZONTAL WELLS WITHIN AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT FOR SECTION 27, TOWNSHIP 6 NORTH, RANGE 62 WEST, 6TH P.M., FOR THE NIOBRARA FORMATION, AND TO ESTABLISH AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT FOR SECTION 26, TOWNSHIP 6 NORTH, RANGE 62 WEST, 6TH P.M., FOR THE CODELL FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NOS. 407

 

DOCKET NO. 1310-SP-1196

 

ORDER NOS. 407-881

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on October 28, 2013, at the Limon Community Center, 477 D Avenue, Limon, Colorado, upon application for an order to approve an additional seven horizontal wells, for a total of up to eight horizontal wells, within an approximate 640-acre drilling and spacing unit established for Section 27, Township 6 North, Range 62 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; and to establish an approximate 640-acre drilling and spacing unit, and approve one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Bill Barrett Corporation, (“BBC” 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 February 22, 2011 (Corrected April 4, 2013), the Commission entered Order Nos. 407-779 and 535-4 which, among other things, established 74 approximate 640-acre drilling and spacing units, and approved one horizontal well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 27, Township 6 North, Range 62 West, 6th P.M. is subject to these Orders for the Niobrara Formation.

 

5.         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, among other things, to 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.  Section 27, Township 6 North, Range 62 West, 6th P.M. is subject to Rule 318A for the Codell and Niobrara Formations.

 

6.         On August 29, 2013, BBC, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an order to: 1) approve an additional seven horizontal wells, for a total of up to eight horizontal wells, within an approximate 640-acre drilling and spacing unit established for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and 2) establish an approximate 640-acre drilling and spacing unit for the Application Lands and approve one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation, 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, without exception being granted by the Director:   

 

            Township 6 North, Range 62 West, 6th P.M.

                        Section 27:      All

 

            7.         Applicant states the proposed wells shall be located on no more than two multi-well pads within the drilling and spacing unit, subject to Rule 318A, or on adjacent lands with surface owner consent.

 

8.         On October 15, 2013, BBC, 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.         Land Testimony and exhibits submitted in support of the Application by Colleen Kennedy, Land Manager for BBC, showed that BBC holds oil and gas leasehold interests in the Codell and Niobrara Formations in the Application Lands.

 

10.       Geologic Testimony and exhibits submitted in support of the Application by Jason G. Anderson, Senior Asset Development Geologist for BBC, showed that the Niobrara Formation underlies the entirety of the Application Lands and is approximately 260 to 262 feet thick.  Further testimony showed the Niobrara Formation is a sequence of chalks, marls and limestones and is a common source of supply.  The Codell Formation underlying the Application Lands is approximately 9 to 9.5 feet thick.  The Codell Formation is a sequence of Siltstones and Sandstones which exists under the entirety of the Application Lands and is a common source of supply

 

11.       Engineering Testimony and exhibits submitted in support of the Application by Kevin Bittel, Senior Reservoir Engineer for BBC, showed that drilling and completing horizontal wells within the Codell and Niobrara Formations underlying the Application Lands is the most efficient and economic method of developing the resource.  Further testimony revealed the calculated drainage area for one horizontal well is an average of 54 acres for the Niobrara Formation and an average of 74 acres for the Codell Formation and would accommodate up to eight horizontal Niobrara wells and one Codell well within the proposed unit.

 

12.       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.

 

13.       BBC agreed to be bound by oral order of the Commission. 

 

14.       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: 1) approve an additional seven horizontal wells, for a total of up to eight horizontal wells, within an approximate 640-acre drilling and spacing unit established for Section 27, Township 6 North, Range 62 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation: and 2) establish an approximate 640-acre drilling and spacing unit, and approve one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An additional seven horizontal wells, for a total of up to eight horizontal wells within an approximate 640-acre drilling and spacing unit established for the below-described lands, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

Township 6 North, Range 62 West, 6th P.M.

                        Section 27:      All

 

2.         An approximate 640-acre drilling and 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 Formation:

 

Township 6 North, Range 62 West, 6th P.M.

                        Section 27:      All

 

3.         The productive interval of the horizontal wellbore shall be 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.

 

4.         The proposed wells shall be located on no more than two multi-well pads within the drilling and spacing unit, subject to Rule 318A, or on adjacent lands with surface owner consent.

 

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 Procedures 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.

 

4.            An application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

 

ENTERED this   8th   day of November, 2013, as of October 28, 2013.

           

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary