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 TWO APPROXIMATE 1,280-ACRE DRILLING AND SPACING UNITS FOR SECTIONS 15 AND 22, TOWNSHIP 4 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. 1403-SP-2030

 

ORDER NO. 407-949

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on March 17, 2014, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-4 for Section 15, Township 4 North, Range 62 West, 6th P.M.; 2) vacate Order No. 407-798; 3) establish an approximate 1,280-acre drilling and spacing unit and approve a total of up to 16 horizontal wells, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and 4) establish an approximate 1,280-acre drilling and spacing unit and approve a total of up to four horizontal wells, 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 15, Township 4 North, Range 62 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

5.         On June 17, 2013, the Commission entered Order No. 407-798 which, among other things, approved an additional fifteen horizontal wells, for a total of up to sixteen horizontal wells, for the approximate 640-acre drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation and established a 640-acre drilling and spacing unit and approved up to four horizontal wells, for the production of oil, gas and associated hydrocarbons from the Codell Formation.  Section 22, Township 4 North, Range 62 West, 6th P.M. is subject to this Order for the Codell and Niobrara Formations.

 

6.         On January 16, 2014, 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 No. 535-4 for Section 15, Township 4 North, Range 62 West, 6th P.M.; 2) vacate Order No. 407-798; 3) establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve a total of up to 16 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 will 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, producing from the Niobrara Formation, without exception being granted by the Director; and 4) establish an approximate 1,280-acre drilling and spacing unit for the Application Lands and approve a total of 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 will 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, producing from the Codell Formation, without exception being granted by the Director:

 

Township 4 North, Range 62 West, 6th P.M.

Section 15:      ALL

Section 22:      ALL

 

Applicant stated that all permitted wells will be drilled from no more than four multi-well pads within the unit, subject to Rule 318A, or on adjacent lands with consent of the surface owner.

 

7.         On March 4, 2014, 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 owns substantial 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 ranges from approximately 262 to 265 feet thick, and the Codell Formation also underlies the entirety of the Application Lands and ranges from approximately 8 to 9 feet thick.  Further testimony showed the Niobrara Formation is a sequence of chalks, marls and limestones and is a common source of supply, while the Codell Formation is a very fine sandstone/siltstone and is also 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 Codell and Niobrara Formations underlying the Application Lands is the most efficient and economic method of developing the resource.  Testimony concluded a 1,280-acre unit would accommodate up to sixteen horizontal Niobrara wells and four horizontal Codell wells, while protecting correlative rights of adjacent mineral owners.

 

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

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 640-acre drilling and spacing unit established by Order No. 535-4 (407-779) for Section 15, Township 4 North, Range 62 West, 6th P.M., is hereby vacated.

 

2.         Order No. 407-798, is hereby vacated.

 

3.         An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 16 horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of the wellbore will 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; and

 

4.         An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to four horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation, with the productive interval of the wellbore will 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 4 North, Range 62 West, 6th P.M.

Section 15:      ALL

Section 22:      ALL

 

5.         All permitted wells will be drilled from no more than four multi-well pads within the unit, subject to Rule 318A, or on adjacent lands with consent of the surface owner.

 

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 35 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   11th   day of April, 2014, as of March 17, 2014.

 

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary