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 ESTABLISH AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT FOR SECTION 22, TOWNSHIP 6 NORTH, RANGE 62 WEST, 6TH P.M., FOR THE CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 407

 

DOCKET NO. 1312-SP-1212

 

ORDER NO. 407-901

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 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 22, 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.

 

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 22, Township 6 North, Range 62 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

5.         On February 11, 2013, the Commission entered Order No. 407-754 which pooled all interests in an approximate 640-acre drilling and spacing unit established for Section 22, Township 6 North, Range 62 West, 6th P.M., to accommodate the drilling of the Dutch Lake #22-24H Well, for the development and operation of the Niobrara Formation. Order No. 407-754 has no effect on this Application.

 

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, 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 22, Township 6 North, Range 62 West, 6th P.M.  is subject to Rule 318A for the Codell and Niobrara Formations.

 

7.         On October 17, 2013, Bill Barrett Corporation (“BBC” or “Applicant”), 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 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, 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; and 2) establish an approximate 640-acre drilling and spacing unit for the Application Lands, and approve up to four horizontal wells 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 250 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 22:      All

 

            8.         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.

 

9.         On December 2, 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.

 

10.       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.

 

11.       Geologic Testimony and exhibits submitted in support of the Application by Charles W. Campbell, Senior Geologist Advisor for BBC, showed that both the Codell and Niobrara Formations underlies the entirety of the Application Lands.  The Niobrara Formation is approximately 261 to 263 feet thick under the Application Lands and the Codell Formation is approximately 9 to 10 feet thick under the Application Lands.  Further testimony showed the Niobrara Formation is a sequence of chalks, marls and limestones and the Codell Formation is a sequence of Siltstones and Sandstones.  Both the Codell and Niobrara Formations are a common source of supply.

 

12.       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 well drainage area for 640-acre laterals would accommodate up to sixteen horizontal wells within the Niobrara Formation and up to four horizontal wells within the Codell Formation.

 

13.       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.

 

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

 

15.       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 22, 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 22:      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, are 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 22:      All

 

3.            The productive interval of the horizontal wellbore shall 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.

 

4.            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