BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF AN APPLICATION BY NOBLE ENERGY, INC. FOR AN ORDER APPROVING A COMPREHENSIVE DRILLING PLAN FOR APPROXIMATELY 64,133 ACRES IN ALL OR PORTIONS OF TOWNSHIP 4 NORTH, RANGE 65 WEST, 6TH P.M., TOWNSHIP 4 NORTH, RANGE 64 WEST, 6TH P.M., TOWNSHIP 4 NORTH, RANGE 63 WEST, 6TH P.M., TOWNSHIP 3 NORTH, RANGE 65 WEST, 6TH P.M., TOWNSHIP 3 NORTH, RANGE 64 WEST, 6TH P.M., TOWNSHIP 3 NORTH, RANGE 63 WEST, 6TH P.M., TOWNSHIP 2 NORTH, RANGE 64 WEST, 6TH P.M., AND TOWNSHIP 2 NORTH, RANGE 63 WEST, 6TH P.M. FOR THE COMPREHENSIVE DEVELOPMENT AND OPERATION OF THE CODELL, NIOBRARA, FT. HAYS AND CARLILE SHALE FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 1
DOCKET NO. 180700613
TYPE: GENERAL ADMINISTRATIVE
ORDER NO. 1-XXX
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DRAFT REPORT OF THE COMMISSION
The Commission heard this matter on October 29, 2018, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, 80203, upon application for an order to adopt a Comprehensive Drilling Plan for Township 4 North, Range 65 West, 6TH P.M., Township 4 North, Range 64 West, 6TH P.M., Township 4 North, Range 63 West, 6TH P.M., Township 3 North, Range 65 West, 6TH P.M., Township 3 North, Range 64 West, 6TH P.M., Township 3 North, Range 63 West, 6TH P.M., Township 2 North, Range 64 West, 6TH P.M., and Township 2 North, Range 63 West, 6TH P.M., for the production of oil, gas, and associated hydrocarbons from the Codell, Niobrara, Ft. Hays, and Carlile Formations.
FINDINGS
The Commission finds as follows:
1. Noble Energy, Inc. (Operator No. 100322), (“Applicant” or “Noble”), 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. Rule 216. of the Rules and Regulations of the Oil and Gas Conservation Commission provides that operators may propose to the Director a Comprehensive Drilling Plan (“CDP”). CDPs provide a broad approach to identifying foreseeable oil and gas activities in a specific geographic area, concurrent with identifying measures to minimize adverse impacts to public health, safety, welfare, and the environment and wildlife resources within that area.
5. CDPs provide the Commission and operators the opportunity to consider oil and gas development in an area in a more holistic manner. As the Commission explained in the December 11, 2008 Statement of Basis, Specific Statutory Authority, and Purpose accompanying the promulgation of Rule 216. (“SBP”), CDPs provide more than just an efficient means of development for operators. CDPs “encourage landscape-level planning and regulatory review….” SBP at p. 21. Such an approach to planning will “help to better address cumulative effects, promote [efficiency], and facilitate more win-win situations.” Id.
6. The regulatory review process of a CDP follows that of a Form 2A, Oil and Gas Location Assessment (“Form 2A”). See Rule 216.c. The CDP process allows for the “‘bundling’ of Form 2A requirements, presented in Rule 303.” SBP at p. 20; see also Rule 216.f.(1), (“… the Comprehensive Drilling Plan [will be] subject to procedures substantially equivalent to those required for a Form 2A…”). If a CDP satisfies all of the Rule 303.b. requirements, then the operator is not required to submit a Form 2A. Rule 216.f.(1). However, as the Commission has explained, a CDP is not a “shield” for operators to use to avoid the Form 2A process or public notice and public comment. SBP at p. 21. If a CDP does not substantially meet the Form 2A requirements of Rule 303.b., “then a Form 2A shall be required for a proposed oil and gas location included in the Comprehensive Drilling Plan.” Rule 216.f.(2).
7. A CDP may be found suitable even if all of the Form 2A requirements are not satisfied with the filing of the CDP. This does not exempt an operator from complying with the Form 2A requirements, nor does it relieve the Director from her administrative role in the review and approval of Form 2As subject to the CDP. If not all Form 2A requirements of Rule 303.b. are satisfied at the time the operator submits the CDP, when the operator submits a Form 2A for the CDP the operator will comply with those Rule 303.b. requirements not fulfilled in the CDP.
8. On May 31, 2018, Amended June 22, 2018, Noble filed with the Commission pursuant to § 34-60-105(1), C.R.S., and Commission Rule 216, a verified application (“Application”) for an order to a) establish and approve a Rule 216. CDP for the below-described lands (“Application Lands”), for the comprehensive, efficient, and effective development and operation of the Codell, Niobrara, Fort Hays, and Carlile Formations; b) stay acceptance of applications for permits-to-drill (“APD”), Form 2As, and applications to establish drilling and spacing units (“DSUs”) in the northern portion of the Application Lands for all Owners and Operators until such time as the Commission has entered an order on the CDP; and c) to stay acceptance of APDs, Form 2As, and applications to establish DSUs in the southern portion of the Application Lands for all Owners and Operators except Applicant, until such time as the Commission has entered an order on the CDP:
Township
2 North, Range 63 West, 6th P.M.
Section 4: W½
Section 5: All
Section 6: All
Section 8: N½
Township
2 North, Range 64 West, 6th P.M.
Sections 5-8: All
Section 17: All
Section 18: All
Township
3 North, Range 63 West, 6th P.M.
Sections 5-8: All
Sections 17-20: All
Section 28: W½
Sections 29-32: All
Section 33: W½
Township
3 North, Range 64 West, 6th P.M.
Sections 1-36: All
Township
3 North, Range 65 West, 6th P.M.
Section 1: W½
Section 2: All
Section 3: All
Sections 10-15: All
Sections 23-26: All
Section 35: All
Section 36: All
Township
4 North, Range 63 West, 6th P.M.
Section 19: All
Section 20: All
Sections 29-32: All
Township
4 North, Range 64 West, 6th P.M.
Sections 10-15: All
Section 19: All
Sections 22-36: All
Township
4 North, Range 65 West, 6th P.M.
Section 36: W½
64,133 acres, more or less, Weld County, Colorado.
9. Noble has a high working interest (approximately 54,497 net mineral acres or approximately 85%) within the Application Lands.
10. Noble’s Application requested a two-tiered stay of APDs, Form 2As, and applications to establish DSUs. Noble’s Application explains that a stay in the Application Lands is necessary to fulfill the purpose of Rule 216.a. A two-tier stay will allow Noble and other stakeholders to meaningfully address foreseeable oil and gas activities in the Application Lands, and discuss mitigation measures for minimizing impacts from the activities. Without a stay, any Operator or Owner may still file their own APDs, Form 2As, or applications to establish DSUs, which will frustrate the purpose of a CDP. Such activities are not and will not be foreseeable to Noble, the Commission and other stakeholders, and will prohibit the stakeholders from addressing impacts from those activities within the final CDP. Moreover, allowing multiple Operators to continue to file APDs, Form 2As, and applications to establish DSUs will create additional environmental and surface impacts within the Application Lands—an outcome that the CDP process seeks to prevent.
11. On August 1, 2018, the Commission entered Order No. 1-210, which granted Noble’s requested two-tier stay. Order No. 1-210 will continue until and terminate upon the earlier of a) the Commission making a final decision on the CDP, or b) February 1, 2019, which would be six months from the entry of Order No. 1-210.
12. On August 10, 2018, Noble submitted its Final CDP. The Final CDP is attached as Exhibit A and is incorporated herein by reference.
13. The CDP Area set forth in the Final CDP is largely rural and no large-scale subdivisions are within the CDP boundaries. Approximately 275 surface owners are within the CDP Area, with the Guttersen Ranch covering a large portion of the surface acreage. The Application Lands are privately owned, or owned by the State Land Board. The Application Lands are primarily used for agricultural purposes, with notable oil and gas development throughout the CDP Area. Approximately 2,306 vertical or directional wells are within the CDP Area.
14. Noble’s Final CDP proposes the following development:
a. 47 Development Plans (“DPs”) each encompassing approximately 1,280 acres. DP is an internal Noble designation for individual drilling and spacing units or wellbore spacing units. Regardless of whether Noble utilizes drilling and spacing units under C.R.S. § 34-60-116, wellbore spacing units under Rule 318A, or voluntarily pooled acreage within a given DP for purposes of filing its APDs, the substantive development of the CDP Area will reflect the plan outlined in exhibits attached to the Final CDP. See Exhibit D of Final CDP.
b. Each DP is designed to accommodate up to 15 horizontal wells and one horizontal well on the boundary line, with a combined total maximum of 772 wells to develop in the CDP.
c. Up to 147 Well Site Locations served by as many as 29 “GEN IV” Econode Production Facility Locations.
d. The CDP Area has been designed to minimize tank storage of produced fluids. Noble will utilize a pipeline to carry all fresh water to the CDP Area and produced water and oil and gas liquids from the CDP Area.
e. Noble will utilize pipelines to remove all gas from the CDP Area to minimize the need for flaring.
15. Development within the CDP coincides with Noble’s existing development plans in the area, which began in the first half of 2018. If the CDP is accepted by the Commission, Noble expects drilling and completion operations to continue through 2024.
16. Noble’s Application sets forth the benefits of a CDP for the Application Lands. These benefits include:
a. Fostering economic and efficient development of the oil and gas resources in the Application Lands while preventing waste.
b. Implementation of “econodes” that virtually eliminate methane and volatile organic compound emission sources and minimizes surface disturbance in the Application Lands.
c. Tankless development of the oil and gas resources in the Application Lands, using pipelines to move oil, gas and produced water.
d. Encouragement of waste water recycling.
e. Significantly fewer environmental impacts than would otherwise be associated with piecemeal development of the Application Lands by multiple operators.
Director’s Finding of Suitability and Staff’s Analysis
17. On August 20, 2018, the Director of the Commission issued her Finding of Suitability of Noble Energy, Inc.’s Final Comprehensive Drilling Plan. Exhibit B. After Staff’s comprehensive review and analysis of the CDP, Staff recommended and the Director found that the Final CDP is suitable for Commission consideration in accordance with Rule 216. Staff’s Analysis and the Director’s Finding of Suitability are incorporated by reference to this Order. See Exhibit B. The Director’s Finding of Suitability recommends that the Commission accept the Final CDP.
18. In the Director’s Finding of Suitability, Staff recommends that the Commission order Noble to submit a Form 2A for each selected location as provided in Rule 303.b. and Form 2 for each well to be drilled. The CDP includes certain information that is substantially equivalent to that which would otherwise be required for a Form 2A. The CDP has also been subject to procedures substantially equivalent to those required for a Form 2A, including but not limited to consultation with surface owners, local governments, the Colorado Department of Public Health and Environment and the Colorado Parks and Wildlife (“CPW”). However, there remains to be provided information that is substantively equivalent to the information required on individual Form 2As for the proposed locations. Further, administrative needs of the COGCC require that the operator complete the Form 2A to populate publicly available database information and provide a complete “location file” as an information repository.
19. Staff also recommends that the Commission order Staff to work with Noble through the processes outlined in COGCC Rules to develop site-specific Best Management Practices and Conditions of Approval to clarify how Rules will be implemented and how impacts will be minimized and mitigated and to provide details of how general compliance will be achieved based on the site-specific concerns that have not been addressed through the CDP process. Site-specific issues to be addressed may include: specific wildlife and wildlife habitat concerns; nuisance concerns such as noise, lights, odors, and dust; sensitive environments and floodplains; access road and traffic issues; and site-specific 502.b. variance requests.
Coordination with Colorado Parks and Wildlife
20. In developing its CDP, Noble worked not only with COGCC Staff, but other stakeholders including CPW. As a result of working with CPW, the Final CDP commits that there are no planned facilities within a ½ mile of eagles’ nests, and only one facility is planned within a ½ mile of Milton Reservoir. If a migratory bird or raptor nest is identified within 1/2 mile of a planned Oil and Gas Location during the pre-construction survey, Noble will comply with the prescriptions provided in the CDP, including interactive discussions with CPW, and will submit location-specific Best Management Practices for minimizing wildlife impacts, as agreed upon by Noble and CPW, via Form 4 Sundry, to the COGCC.
Variance Requests
21. Rule 216.c.(10) provides that operators may include in their CDP’s “[a]ny planned variance requests that are reasonably known to the operator.” Noble requests that the Commission grant Rule 502.b. variances to Rule 303.g., 303.a.(5)D., and 1002.b.(2).
22. Rule 303.g. Rule 303.g.(1) provides that approval of a Form 2 shall become null and void if drilling operations on the permitted well are not commenced within two (2) years after the date of approval. Rule 303.g.(2) similarly provides that if construction operations are not commenced on an approved Oil and Gas Location within three (3) years after the date of approval, then the approval shall become null and void. Pursuant to these Rules, the Director is not authorized to approve extensions to Forms 2 or 2A. In the Final CDP, Noble requested a variance to Rule 303.g. such that all Forms 2 and 2A within the CDP Area approved during the first six-years of the CDP (“Initial Term”) will be valid for that Initial Term (being six years from the effective date of the order). The granting of this variance will provide Noble with flexibility to modify its drilling timeline within the CDP Area should it become necessary, without creating additional burden on COGCC Staff to conduct additional Form 2 or 2A review if the original Forms 2 or 2A expire. The Director supports granting Noble a variance to Rule 303.g.(1).
23. Rule 303.a.(5)D. Rule 303.a.(5)D. provides that a Form 2 to drill a new well shall have a well location plat attached. In its Final CDP, Noble requested a variance to this Rule such that Noble will be allowed to attach a single multi-well location plat on every Form 2 that covers each Development Plan (DP) within the CDP Area. Pursuant to the Final CDP, the multi-well location plat will contain the same level of detailed information as contained in a single well location plat and will be attached to each Form 2 submitted within a DP. The granting of this variance will expedite the process of preparing materials and streamline the COGCC Staff’s review. The Director supports granting Noble a variance to Rule 303.a.(5)D.
24. Rule 1002.b.(2) Rule 1002.b.(2) requires operators excavating on non-cropland to separate and store the topsoil horizon or the top six (6) inches, whichever is deeper, and mark or document stockpile locations to facilitate subsequent reclamation. Noble requested a variance to Rule 1002.b. with respect to topsoil management requirements on Guttersen Ranch (identified on Exhibit B to the Final CDP). Rule 1001.c. states that the Commission shall not require compliance with Rule 1002 if the operator can demonstrate to the Director’s or Commission’s satisfaction that compliance with such rule is not necessary to protect public health, safety and welfare, including the environment, and that the operator has entered into an agreement with the surface owner regarding topsoil protection and reclamation of the land. Noble provided information to the Director that compliance with Rule 1002.b. on Guttersen Ranch is unnecessary for two reasons. First, Guttersen Ranch’s soil type is primarily classified as sandy with greater than 70% sand per the soil texture triangle. There is generally little quality topsoil within the 70% or greater sandy textured soil present throughout Guttersen Ranch. Accordingly, collecting and stockpiling topsoil from Guttersen Ranch would be difficult in some areas and may not provide added protection to the environment. Second, Noble has entered into an agreement with Mr. Guttersen regarding topsoil management with respect to this portion of the CDP Area. Noble has agreed with Mr. Guttersen that at interim and final reclamation, Noble will take measures, including importation of topsoil of equivalent or better quality and to a minimum depth of 6 inches, or the same depth or greater than currently exists on site, in order to achieve reclamation on each oil and gas location within the Guttersen Ranch. Noble has extensive experience in such reclamation practices. Both Noble and Mr. Guttersen have concluded that this approach will satisfy the environmental, public health, and wildlife provisions of the Commission’s rules. The Director supports granting Noble a variance to Rule 1002.b.(2) for topsoil management requirements on the Guttersen Ranch.
25. In its Final CDP, Noble requests that the treated interval of any well drilled within a DP within the interior boundaries of the CDP shall be located no closer than two hundred (200) feet from the DP boundary at the heel and toe of each well and three hundred feet (300) from the DP boundary on each lateral side of a well, with an inter-well setback of not less than one hundred and fifty (150) feet from the treated interval of a horizontal well producing from the Niobrara, Ft. Hays, Codell, or Carlile Formations. As further discussed in the Final CDP, the CDP will generally encompass a series of statutorily driven DSUs. In most cases, the DSUs will encompass approximately 1,280-acres, more or less. However, if conditions warrant, Noble may utilize Rule 318A to establish approximate 1,280-acre horizontal wellbore spacing units (“WSUs”) for a DP. Rule 318A.a.(4)D. provides that the horizontal wellbore spacing unit may be of different sizes and configurations depending on the lateral length and orientation but shall be comprised of the governmental quarter-quarter sections in which the wellbore lateral penetrates the productive formation as well as any governmental quarter-quarter sections that are located less than four hundred sixty (460) feet from the completed interval of the wellbore lateral regardless of section or quarter sections lines. In order to maximize efficient and economic resource recovery while maintaining a uniform development pattern throughout the CDP, Noble requests that the reduced setbacks identified above apply throughout the interior boundaries of the CDP Area, regardless of whether the DP is established as DSU or WSU. Accordingly, where Noble establishes an approximate 1,280-acre WSU for a DP, or an approximate 1,280-acre DSU for a DP, the treated interval of any well drilled within a DP within the interior boundaries of the CDP shall be located no closer than two hundred (200) feet from the DP boundary at the heel and toe of each well and three hundred feet (300) from the DP boundary on each lateral side of a well, with an inter-well setback of not less than one hundred and fifty (150) feet from the treated interval of a horizontal well producing from the Niobrara, Ft. Hays, Codell, or Carlile Formations. Noble has previously provided the Commission with evidence to demonstrate that the above-referenced reduced setbacks in the southern tier will prevent waste and protect correlative rights (see Order No. 407-2605). Pursuant to Rule 519.c.(4), Noble requested, and the Commission has, taken administrative notice of the evidence submitted in the record for Order No. 407-2605 with respect to applying the above-referenced setbacks to the entire CDP Area. The Director supports granting this request.
26. Pursuant to Rules 216.f.(1) and 303.b.(2)B., the CDP includes certain information outlined below that is substantially equivalent to that which would otherwise be required for a Form 2A for Oil and Gas Locations and with respect to those provisions of the CDP outlined below, the CDP has been subject to procedures substantially equivalent to those required for a Form 2A, including but not limited to consultation with surface owners, local governments, the Colorado Department of Public Health and Environment and the Colorado Parks and Wildlife. Accordingly, Noble requests that the CDP approved by the Commission shall be deemed to satisfy the requirements of Rules 303.b.(3)E., 303.b.(3)F., 303.b.(3)G., and 303.b.(3)H. Accordingly, Noble will not be required to provide this information with each individual Form 2A submitted within the CDP Area. The Director supports granting this request.
27. Development Plan and Sole Operatorship. Noble’s Final CDP encompasses approximately 64,133 acres in Weld County. The CDP describes Noble’s reasonably foreseeable oil and gas development activities in the Application Lands and covers the activities as the sole operator. As of the date of the hearing, Noble owns approximately 54,497 acres net mineral acres within the Application Lands. Noble has executed surface use agreements with twelve (12) surface owners encompassing almost all of the Application Lands. The final surface use agreement is being negotiated by Noble.
28. Noble proposed 47 DPs, with most DPs encompassing approximately 1,280 acres. Each DP is designed to accommodate up to 16 horizontal wells. The CDP also will include up to 147 well site locations, which are served by as many as 29 “Gen IV Econode Production Facility Locations.” Development of the CDP occurred at the landscape level and addressed a wide range of potential cumulative effects for the Application Lands. This landscape-level approach has allowed Noble to identify measures that will mitigate, and in some instances greatly reduce, impacts to the public, environment, and wildlife from oil and gas development. Noble has proposed a systematic plan of development along west-to-east drilling corridors.
29. Noble’s production facilities will be centralized along the west-to-east corridors at “Gen IV Econode Production Facilities.” Noble developed and modified the “Econode” concept of centralized production facilities, and the current generation, “Gen IV,” represents a streamlined and efficient production methodology that provides several environmental and economic benefits. Econodes can service wells spread out over as many as eight different sections or four DPs, thereby eliminating the need to locate numerous production facilities throughout a single development area. The use of Econodes substantially reduces emissions of both methane and volatile organic compounds. Combined with Noble’s plan to plug and abandon as many as 1,471 of Noble’s vertical wells, the CDP will yield significant air quality benefits.
30. Within the CDP Area, Noble will use pipelines to carry fresh water to the well sites for drilling and completions and will use pipelines to remove produced water, oil and gas liquids from the Econode Oil and Gas Locations to Noble’s central processing facility near the western edge of the CDP Area. Noble also will use pipelines to remove natural gas from the CDP Area to minimize flaring. Noble’s Final CDP provides for a systematic plan of development that is contingent on sole operatorship of the Application Lands. Noble’s CDP will maximize recovery of the oil and gas resource and protect correlative rights. It also will provide significant environmental and public health benefits and will protect wildlife resources. Noble could not practically achieve those goals if other operators could pursue development within the Application Lands, interrupting the west-to-east corridors or submitting competing applications that conflict with the organized DPs in the CDP. Such an outcome would result in piecemeal development and defeat the intent and purpose of Rule 216.
Submission and Approval of Form 2s and 2As
31. The Final CDP requested, that notwithstanding the provisions of 216.f and 303.c.(1), the Commission’s review of Form 2s and Form 2As for locations and wells within the CDP Area conform to the following terms:
a. Noble will work with Commission staff to develop unique identifiers for APDs and Form 2As submitted within the CDP Area, including document numbers, location names, and well names.
b. Staff will conduct an initial completeness review and will notify Noble within three (3) business days of receipt of any incorrect or incomplete information in the APD or Form 2A, and will return the Form to draft for correction.
c. Within three (3) business days of receipt of the resubmitted APD or Form 2A, staff will conduct the subsequent completeness review and will notify Noble of any incorrect or incomplete information and will return the form to draft for correction.
d. The 30-day clock for determining whether to approve a Form 2A will be suspended upon staff’s request for missing information or to correct information contained in the initial Form 2A. The 30-day clock will resume upon a determination that the Form 2A is complete.
e. The 30-day clock for determining whether to approve a Form 2 will be suspended upon staff’s request for missing information or to correct information contained in the initial APD. The 30-day clock will resume upon a determination that the Form 2 is complete.
f. The COGCC Form 2 and 2A rejection process will apply to forms submitted pursuant to the CDP. Resubmittal of rejected forms will (i) require notification to designated COGCC staff, and (ii) require a completeness review, and (iii) start a new Rule 303.c.(1) thirty-day (30) clock.
g. Notwithstanding the above, the Director will approve or deny a Form 2 or Form 2A within thirty (30) days of a determination that such application is complete pursuant to Rule 216.f.(3).
32. For any Form 2 or Form 2A that falls within an exception zone or buffer zone, the Director will approve or deny the Form within forty-five (45) days of a determination that such application is complete pursuant to Rule 216.f.(3). A Noble Form 2 or Form 2A that falls within an exception zone or buffer zone, will be subject to all Commission Rules governing exception zone and buffer zone locations.
Protests
33. On July 13, 2018, Crestone Peak Resources Operating, LLC (“Crestone”) filed a Protest to Noble’s Application. Crestone withdrew its protest to the Application on September 14, 2018.
34. On July 16, 2018, Anadarko Petroleum Corporation, on behalf of itself and its affiliates, Anadarko Land Corporation, Anadarko E&P Onshore LLC, and Kerr-McGee Oil & Gas Onshore LP (collectively “Anadarko”) filed a Protest to Noble’s Application. Anadarko withdrew its protest to the Application prior to the October 29, 2018, hearing.
35. On July 16, 2018, Incline Niobrara Partners, LP, Incline Minerals, LLC, and Incline Energy, LLC (collectively “Incline”) filed a Protest to Noble’s Application. Incline withdrew its protest to the Application prior to the October 29, 2018, hearing
Statements of Support
36. On October 15, 2018, the Weld County Board of County Commissioners submitted a letter to the Commission expressing its full support for Noble’s Final CDP noting the plan is a “strong proposal that will give Noble, landowners, neighbors, mineral owners and local government more certainty and long-term understanding of the activity associated with the Plan.”
37. On October 15, 2018, Anadarko, a mineral owner in the CDP area, submitted a public comment in which it expressed that it, on behalf of all subsidiaries, “fully supports approval of the CDP for this acreage” after Anadarko and Noble worked collaboratively to resolve Anadarko’s concern.
ORDER
IT IS HEREBY ORDERED:
1. The Commission accepts Noble’s Final CDP.
2. The Final CDP for the Application Lands will be valid for an initial term of six (6) years from the effective date of the order (the “Initial Term”). Following the expiration of the Initial Term, the CDP will continue so long as Noble is then engaged in continuous operations and for so long thereafter as Noble diligently pursues continuous operations within the CDP Area by meeting one of the following: (1) Noble shall drill and complete a horizontal well or begin construction of a well pad and drill and complete a horizontal well therefrom/thereon with due diligence with no more than six months’ time elapsing between the rig release of one such well and the commencement of the next such well or construction of a well pad for the next such well; or (2) Noble shall drill and complete at least 2 horizontal wells per calendar year. If Noble believes it is uneconomic to continue to drill wells to satisfy the continuous operations requirement following the Initial Term, Noble may request that the Commission enter an order suspending the continuous operations requirement following application, notice and a hearing. It is Noble’s burden to demonstrate in its application that suspension of continuous operations is necessary due to conditions that make development uneconomic. The Commission may limit the length of time under which the continuous operations requirement is suspended. Noble, upon application, notice, and hearing, may request an extension of the suspension of the continuous operations requirement if conditions so warrant. If, following the Initial Term, Noble fails at any time to comply with these continuous operations requirements, upon application by an Owner, and after notice and subsequent hearing, the CDP Area will contract to include only those Development Plans within which Noble has drilled and completed horizontal wells. Lands and approved permits no longer included in the CDP Area as a result of contraction under this provision will immediately become subject to existing rules, regulations and orders of the Commission, including, but not limited to the 300-Series rules with respect to permit expiration, as though any variances regarding permit expiration granted under the Comprehensive Drilling Plan never applied, except that any variances to Commission rules granted under the Comprehensive Drilling Plan concerning informational attachments to permits or Oil and Gas Location Assessments shall continue to apply for so long as the permit remains valid.
3. A Rule 502.b. variance is granted as follows:
a. Rule 303.g. is hereby modified such that all Forms 2 and 2A within the CDP Area approved during the Initial Term of the CDP will be valid for the Initial Term of the CDP (being six years from the effective date of the order).
b. Rule 303.a.(5)D. is hereby modified such that Noble may attach a single multi-well location plat on each Form 2 covering the wells planned within a DP.
c. Noble is not required to separate and store topsoil horizon or the top six inches of soil on Guttersen Ranch, as required by Rule 1002.b.(2).
4. Mineral setbacks within the Application Lands are hereby modified such that the treated interval of any well drilled within a DP within the interior boundaries of the CDP shall be located no closer than two hundred (200) feet from the DP boundary at the heel and toe of each well and three hundred feet (300) from the DP boundary on each lateral side of a well, with an inter-well setback of not less than one hundred and fifty (150) feet from the treated interval of a horizontal well producing from the Niobrara, Ft. Hays, Codell, or Carlile Formations. These setbacks shall apply regardless of whether the DP is established as a drilling and spacing unit or horizontal wellbore spacing unit.
5. The Final CDP is deemed to satisfy the requirements of Rules 303.b.(3)C., 303.b.(3)E., 303.b.(3)F., 303.b.(3)G., and 303.b.(3)H. Noble is not required to provide this information with each individual Form 2A submitted within the CDP Area.
6. Noble will submit Form 2A (Oil and Gas Location Assessments) for each selected location as provided in Rule 303.b. and Form 2 (Applications for Permit to Drill) for each well to be drilled.
7. Consistent with Rule 216, the Commission orders that no applications for drilling and spacing units, wellbore spacing units, Form 2s, or Form 2As within the Application Lands, other than those filed by Noble consistent with the CDP, will be accepted or approved by the Director for the duration of the CDP.
8. Staff will work with Noble through the processes outlined in COGCC Rules to develop site-specific Best Management Practices and Conditions of Approval to clarify how Rules will be implemented and how impacts will be minimized and mitigated and to provide details of how general compliance will be achieved. Site-specific issues to be addressed may include: specific wildlife and wildlife habitat concerns; nuisance concerns such as noise, lights, odors, and dust; sensitive environments and floodplains; access road and traffic issues; and site-specific 502.b. variance requests.
9. The Director will approve or deny a Form 2 or Form 2A within thirty (30) days of a determination that such application is complete pursuant to Rule 216.f.(3).
10. However, for any Form 2 or Form 2A that falls within an exception zone or buffer zone, the Director will approve or deny the Form within forty-five (45) days of a determination that such application is complete pursuant to Rule 216.f.(3). A Noble Form 2 or Form 2A that falls within an exception zone or buffer zone, will be subject to all Commission Rules governing exception zone and buffer zone locations.
11. In the interest of administrative economy, this Order incorporates by reference the entirety of NOBLE ENERGY, INC.’S FINAL COMPREHENSIVE DRILLING PLAN submitted to the Colorado Oil and Gas Conservation Commission August 10, 2018.
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 day of November, 2018, as of October 29, 2018
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By:
Julie Spence Prine, Secretary