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 SIXTEEN HORIZONTAL WELLS IN AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT ESTABLSHED FOR SECTION 20, TOWNSHIP 5 NORTH, RANGE 61 WEST, 6TH P.M., FOR THE NIOBRARA FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 1312-AW-82

 

ORDER NO. 407-897

REPORT OF THE COMMISSION

 

The Commission heard this matter on December 16, 2013, at the Ralph L. Carr Colorado Judicial Center, 1300 Broadway, 1st Floor, Room 1E, Denver, Colorado, upon application for an order to approve up to 16 horizontal wells within an approximate 640-acre drilling and spacing unit established for Section 20, Township 5 North, Range 61 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara 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 20, Township 5 North, Range 61 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

5.         On October 17, 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 approve an additional fifteen horizontal wells, for a total of up to sixteen 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, with the productive interval of the wellbore to be located no closer than 460 feet from the unit boundaries, and no closer than 250 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:

 

                    Township 5 North, Range 61 West, 6th P.M.

                    Section 20:          All

 

            6.         Applicant states the proposed wells shall be located on no more than four multi-well pads within the unit, with no more than one multi-well pad per quarter quarter section, subject to Rule 318A, or on adjacent lands with surface owner consent.

 

7.         On December 3, 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.

 

8.         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 Application Lands.

 

9.         Geologic Testimony and exhibits submitted in support of the Application by Charles W. Campbell, Senior Geologist Advisor for BBC, showed that the Niobrara Formation underlies the entirety of the Application Lands and is approximately 261 to 263 feet thick.  Further testimony showed the Niobrara Formation is a sequence of chalks, marls and limestones and is a common source of supply.

 

10.       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 Niobrara Formation underlying the Application Lands is the most efficient and economic method of developing the resource.  Testimony concluded the calculated drainage areas supported the request for up to 16 horizontal wells within the unit from the Niobrara Formation. Modeling estimated EUR is 225 MBO per well at an 8.7% recovery factor.

 

11.       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.

 

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

 

13.       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 approve up to sixteen horizontal wells within an approximate 640-acre drilling and spacing unit established for Section 20, Township 5 North, Range 61 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.

 

ORDER

 

            IT IS HEREBY ORDERED:

 

1.            An additional 15 horizontal wells, for a total of up to 16 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, with the productive interval of the horizontal wellbore to be no closer than 460 feet from the unit boundaries, and no closer than 250 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:

 

                   

                    Township 5 North, Range 61 West, 6th P.M.

                    Section 20:          All

 

2.            The proposed wells shall be located on no more than four multi-well pads within the unit, with no more than one multi-well pad per quarter quarter section, 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 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.

 

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

 

ENTERED this ____ day of January, 2014, as of December 16, 2013.

           

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary