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 |
) ) ) ) ) ) ) |
CAUSE NO. 407
DOCKET NO. 1312-SP-1213
ORDER NO. 407-902 AMENDED |
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 vacate an approximate 640-acre drilling and spacing unit established by
Order Nos. 407-779 and 535-4 for Section 1, Township 6 North, Range 62 West, 6th
P.M.; and 2) establish an approximate 1078.30 1026.47-acre
drilling and spacing unit for Sections 1 and 2, Township 4 North, Range 62
West, 6th P.M., for the production of oil, gas, and related
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. Sections 1 and 2, Township 4 North, Range 62 West, 6th P.M. are subject to this Order 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. Sections 1 and 2, Township 4 North, Range 62 West, 6th P.M. are subject to Rule 318A for the Niobrara Formation.
7. 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: 1) vacate an approximate 640-acre drilling and
spacing unit established by Order Nos. 407-779 and 535-4 for Section 1,
Township 6 North, Range 62 West, 6th P.M.; and 2) establish
an approximate 1078.30 1026.47-acre drilling and spacing unit for
the below-described lands (“Application Lands”) and approve up to sixteen
horizontal wells within the unit, 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 4 North, Range 62 West, 6th P.M.
Section 1: Lot 2, the S½ NW¼, SW¼, SW¼ NE¼, and
those portions of Lot 4 and the W½ SE¼ lying outside of the Riverside Reservoir
right-of-way (approximately 420.74 368.91 acres)
Section 2: All (approximately 657.56 acres)
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 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 the Niobrara Formation is 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 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.
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) vacate an
approximate 640-acre drilling and spacing unit established by Order Nos.
407-779 and 535-4 for Section 1, Township 6 North, Range 62 West, 6th
P.M.; and 2) establish an approximate 1078.30 1026.47-acre
drilling and spacing unit for Sections 1 and 2, Township 4 North, Range 62
West, 6th P.M., for the production of oil, gas, and related
hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit established by Order Nos. 407-779 and 535-4 for Section 1, Township 6 North, Range 62 West, 6th P.M., is hereby vacated.
2.
An
approximate 1078.30 1026.47-acre drilling and spacing unit for
the below-described lands, is hereby established, and up to sixteen horizontal
wells within the unit, are hereby approved, for the production of oil, gas and
associated hydrocarbons from the Niobrara Formation:
Township 4 North, Range 62 West, 6th P.M.
Section 1: Lot 2, the S½ NW¼, SW¼, SW¼ NE¼, and
those portions of Lot 4 and the W½ SE¼ lying outside of the Riverside Reservoir
right-of-way (approximately 420.74 368.91 acres)
Section 2: All (approximately 657.56 acres)
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.
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 7th day of January, 2014, as of December 16, 2013.
AMENDED this 7th day of January 2015, as of December 15, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Jill Dorancy, Acting Secretary