BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
|
IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE NIOBRARA FORMATION, UNNAMED FIELD, ADAMS COUNTY, COLORADO |
) ) ) ) ) ) )
|
CAUSE NO. 535
DOCKET NO. 180700543
TYPE: SPACING
ORDER NO. 535-1048
|
REPORT OF THE COMMISSION
The Commission heard this matter on July 30, 2018, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado upon application for an order to establish an approximate 1,280-acre drilling and spacing unit for Sections 11 and 12, Township 3 South, Range 65 West, 6th P.M., and approve 16 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. GMT Exploration Company LLC (Operator No. 10243) (“GMT” or “Applicant”) 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. Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that, on unspaced lands, wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and located not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply. Sections 11 and 12, Township 3 South, Range 65 West, 6th P.M. are subject to Rule 318.a. for the Niobrara Formation.
5. On May 28, 2018, GMT, by its attorneys, filed with the Commission a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve 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 to be located no closer than 600 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, unless an exception is granted by the Director:
Township 3 South, Range 65 West, 6th P.M.
Section 11: All
Section 12: All
Applicant stated that any horizontal wells to be drilled will be drilled from no more than one multi-well pad on the surface of the drilling unit, or on adjacent lands with consent of the landowner, unless an exception is granted by the Director.
6. On June 29, 2018, GMT, 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.
7. Land testimony and exhibits submitted in support of the Application by Hans Schuster, Senior Landman for GMT, showed that GMT holds oil and gas leasehold interests and has a right to drill in the Application Lands.
8. Geologic testimony and exhibits submitted in support of the Application by Sarah Heger, Senior Geologist for GMT, showed that the Niobrara Formation is present throughout the Application Lands and is approximately 260 to 350 feet thick. Geologic testimony further showed that the Niobrara Formation consists of alternating carbonate rich chalks and mud and carbonate mixed marls.
9. Engineering testimony and exhibits submitted in support of the Application by Cyrus Esphahanian, Reservoir Engineer for GMT, showed that the drainage area for analog horizontal Niobrara Formation wells is estimated at 68 acres. Thus, an approximate 1,280-acre drilling and spacing unit is not less than the maximum area that can be efficiently, economically and effectively drained by 16 horizontal wells producing oil, gas and associated hydrocarbons from the Niobrara Formation.
10. 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.
11. GMT agreed to be bound by oral order of the Commission.
12. 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 establish an approximate 1,280-acre drilling and spacing unit for Sections 11 and 12, Township 3 South, Range 65 West, 6th P.M., and approve 16 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of 16 horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 3 South, Range 65 West, 6th P.M.
Section 11: All
Section 12: All
2. The productive interval of the wellbore will be located no closer than 600 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, unless the Director grants an exception.
3. Any horizontal wells to be drilled shall be drilled from no more than one multi-well pad on the surface of the drilling unit, or on adjacent lands with consent of the landowner, unless an exception is granted by the Director.
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 20th day of August, 2018, as of July 30, 2018.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Julie Spence Prine, Secretary