BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND ) CAUSE NO. 318
ESTABLISHMENT OF FIELD RULES TO GOVERN )
OPERATIONS IN THE REPUBLICAN FIELD, ) ORDER NO. 318-7
YUMA COUNTY, COLORADO )
This cause came on for hearing before the Commission at 10:00 a.m. on December 1, 2003 in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado on the verified application of Noble Energy, Inc. for an order to allow two (2) additional wells to be drilled in the existing 160-acre drilling and spacing units for certain lands in Township 1 North, Range 45 West, 6th PM, at the option of the operator.
The Commission finds as follows:
1. Noble Energy, Inc., 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.
4. On August 22, 1978, the Commission issued Order No. 318-3, which established 160-acre drilling and spacing units for the production of gas and associated hydrocarbons from the Niobrara Formation for the below-described lands, with the permitted well located no closer than 900 feet from the boundaries of the quarter section upon which the well is located:
Township 1 North, Range 44 West, 6th P.M.
Section 7: All
Sections 18 and 19: All
Sections 30 and 31: All
Township 1 North, Range 45 West, 6th P.M.
Sections 7 through 36: All
Township 1 South, Range 45 West, 6th P.M.
Sections 3 through 5: All
5. On July 17, 1994 (amended August 19, 1994), the Commission issued Order No. 318-5, which allowed a second well to be drilled on each 160-acre drilling and spacing unit on the above-described lands in the Republican Field for the production of gas and associated hydrocarbons from the Niobrara Formation, with the permitted well to be located no closer than 560 feet from the outer boundaries of the unit.
6. On October 15, 2003, Noble Energy, Inc., by its attorney, filed with the Commission a verified application for an order to allow two (2) additional wells to be drilled in the existing 160-acre drilling and spacing units underlying the below-described lands at the option of the operator, with the result that up to four (4) wells can be drilled to and completed in each 160-acre drilling and spacing unit, with the permitted well to be located no closer than 560 feet to the outer boundary of the unit:
Township 1 North, Range 45 West, 6th P.M.
Section 14: All
Section 21: N½, SE¼
Section 32: All
7. Testimony and exhibits presented at the administrative hearing showed that notice was given to all leasehold owners within the application lands but not to leasehold owners outside of the application lands because no change in existing setbacks from drilling unit boundaries is requested. Additional testimony indicated that grazing and crop cultivation is the current surface use on the application lands. A letter of support for this application was received from Mountain Petroleum Corporation, a lease owner in Section 21.
8. Testimony and exhibits presented at the administrative hearing showed the Niobrara Formation is continuous across the entire application area, with some faulting. Additional testimony indicated that the Niobrara Formation has an average porosity of 24% and an average permeability of 1 md.
9. Testimony and exhibits presented at the administrative hearing showed example volumetric calculations for original gas in place and indicated drainage calculations for the existing wells. Additional testimony indicated that the average drainage area for Section 14 is calculated at 48 acres per well, the average drainage acreage for Section 21 is calculated at 47 acres and the average drainage acreage for Section 32 is calculated at 47 acres per well. Further testimony indicated that additional wells drilled to the Niobrara Formation in the application area would be economic.
10. Testimony presented at the administrative hearing indicated that two (2) wells per 160-acre drilling and spacing unit would not effectively drain the unit. Additional testimony indicated that 160-acre drilling and spacing units are not less than the area that can be effectively drained by up to four (4) Niobrara Formation wells.
11. At the time of the administrative hearing, Noble Energy, Inc. agreed to be bound by oral order of the Commission.
12. Based upon the facts stated in the verified application, and having been heard by the Hearing Officers who recommended approval, the Commission should enter an order allowing two (2) additional wells to be drilled in the existing 160-acre drilling and spacing units underlying the lands described in Finding No. 6 at the option of the operator, with the result that up to four (4) wells can be drilled to and completed in each 160-acre drilling and spacing unit, with the permitted well to be located no closer than 560 feet to the outer boundary of the unit.
NOW, THEREFORE, IT IS ORDERED, that two (2) additional wells are hereby allowed to be drilled in the existing 160-acre drilling and spacing units underlying the below-described lands at the option of the operator, with the result that up to four (4) wells can be drilled to and completed in each 160-acre drilling and spacing unit, with the permitted well to be located no closer than 560 feet to the outer boundary of the unit:
Township 1 North, Range 45 West, 6th P.M.
Section 14: All
Section 21: N½, SE¼
Section 32: All
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.
IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
ENTERED this _____ day of December, 2003, as of December 1, 2003.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: _____________________________
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
December 10, 2003