BEFORE THE OIL AND GAS CONSERVATION
COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION ) CAUSE NO. 381
AND ESTABLISHMENT OF FIELD RULES TO )
GOVERN OPERATIONS IN THE BRACEWELL FIELD, ) ORDER NO. 381-14
WELD COUNTY, COLORADO )
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 9:00 a.m. on March 30, 2009, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to segregate the W½ NW¼ of Section 33, Township 6 North, Range 66 West, 6th P.M., and establish 40-acre drilling and spacing units for the NW¼ NW¼ and the SW¼ NW¼ of said Section 33, for the production of oil and associated hydrocarbons from the Codell, Niobrara and “J” Sand Formations.
FINDINGS
The Commission finds as follows:
1. Orr Energy, LLC (“Orr”), 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 June 27, 1983, the Commission issued Order No. 381-1, which among other things, established 80-acre drilling and spacing units for certain lands, including Section 33, Township 6 North, Range 66 West, 6th P.M., for the production of oil and associated hydrocarbons from the Codell Formation.
5. On June 18, 1984, the Commission issued Order No. 381-2 to amend Order No. 381-1 to recognize previously established 80-acre drilling and spacing units for certain lands, including Section 33, Township 6 North, Range 66 West, 6th P.M., for the production of oil and associated hydrocarbons from the Niobrara Formation.
6. On February 18, 1985, the Commission issued Order No. 381-5, which among other things, allowed the option to drill an additional well on each 80-acre drilling and spacing unit in the undrilled 40-acre tract for certain lands, including Section 33, Township 6 North, Range 66 West, 6th P.M., for the production of oil and associated hydrocarbons from the Codell and Niobrara Formations.
7. Rule 318A of the Rules and Regulations of the Commission provides that any Greater Wattenberg Area (“GWA”) well may utilize commingled production for any or all of the Cretaceous Age formations from the base of the Dakota Formation to the surface (to include the Codell, Niobrara and “J” Sand Formations). Section 33, Township 6 South, Range 66 West, 6th P.M., is subject to this Rule.
8. On February 6, 2009, Orr, by its attorney, filed with the Commission a verified application to segregate the 80-acre drilling and spacing unit consisting of the W½ NW¼ of Section 33, Township 6 North, Range 66 West, 6th P.M., and establish two 40-acre drilling and spacing units for the NW¼ NW¼ and the SW¼ NW¼ of said Section 33, for the production of oil and associated hydrocarbons from the Codell, Niobrara and “J” Sand Formations.
9. On March 17, 2009, Orr, by its attorney, 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. Testimony and exhibits submitted in support of the application showed that Orr is the sole leasehold owner of the SW¼ NW¼ of Section 33, Township 6 North, Range 66 West, 6th P.M. Additional testimony indicated that Orr has obtained a permit-to-drill the AG #33-12 Well, located in the SW¼ NW¼ of said Section 33, for commingled production from the Codell, Niobrara and “J” Sand Formations, and that the segregation of the W½ NW¼ of said Section 33 into two 40-acre drilling and spacing units, for the NW¼ NW¼ and the SW¼ NW¼ of said Section 33, will facilitate the drilling and completion of said well.
11. The above-referenced testimony and exhibits show that the proposed spacing will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of oil and associated hydrocarbons, and will not violate correlative rights.
12. Orr Energy, LLC, 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.b., the Commission should enter an order to segregate the W½ NW¼ of Section 33, Township 6 North, Range 66 West, 6th P.M., and establish 40-acre drilling and spacing units for the NW¼ NW¼ and the SW¼ NW¼ of said Section 33, for the production of oil and associated hydrocarbons from the Codell, Niobrara and “J” Sand Formations.
ORDER
NOW, THEREFORE IT IS ORDERED, that the 80-acre drilling and spacing unit consisting of the W½ NW¼ of Section 33, Township 6 North, Range 66 West, 6th P.M. is hereby segregated, and that two 40-acre drilling and spacing units consisting of the NW¼ NW¼ and the SW¼ NW¼ of said Section 33 are hereby established, for the production of oil and associated hydrocarbons from the Codell, Niobrara and “J” Sand Formations.
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 April, 2009, as of March 30, 2009.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert A. Willis, Acting Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
April 1, 2009