BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE WATTENBERG GAS SPACED AREA AND THE CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO
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CAUSE NOS. 232 and 407
ORDER NOS. 232-179 & 407-241
AMENDED |
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m. on November 25, 1997, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of North American Resources Company ("NARCO") for an order to allow the drilling of an additional "J" Sand Formation well for each of the 320-acre drilling and spacing units for certain lands. Once drilled and completed, these will be the third "J" Sand Formation wells for the 320-acre drilling and spacing units The Applicant wishes to recomplete said wells to the Codell and Niobrara Formations and commingle production from these formations with production from the "J" Sand Formation.
The Commission finds as follows:
1. North American Resources Company ("NARCO"), 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. In Cause No. 232, the Commission established 320-acre drilling and spacing units with said units to consist of the N½ and S½ or the E½ and W½ of a governmental section for production from the "J" Sand Formation and with the authorized well to be located in the NE¼ and the SW¼ of each section no closer than 990 feet from the boundaries of the quarter section. By Order No. 232-20, the Commission authorized the drilling of a second well for each 320-acre drilling and spacing unit with the additional well to be located no closer than 990 feet from the boundaries of the quarter section upon which it is located.
5. In Order No. 407‑1, the Commission established 80‑acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation. Wells shall be located in the center of the 40‑acre tract or quarter‑quarter section with a tolerance of 200 feet in any direction. In Order Nos. 407‑10 and 407‑13, the Commission amended Order No. 407‑1 to include production from the Niobrara Formation in certain lands and to allow the downhole commingling of production from the Codell and Niobrara Formations.
6. Order Nos. 407-66 and 232-47 issued April 16, 1991, among other things, allowed the recompletion, downhole commingling and approval of allocation methods for production from the "J" Sand, Codell, and Niobrara Formations.
7. That NARCO wishes to drill a third "J" Sand Formation well to be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction as described below.
Proposed well Location 320-acre Drilling/Spacing Unit
Hingley Farms SW¼ NE¼ Sec 18-1N-67W N½
Ione NE¼ SW¼ Sec 2-2N-66W W½
Ione NW¼ SW¼ Sec 4-2N-66W S½
Sullivan SW¼ SE¼ Sec 26-2N-68W S½
Barclay-Crisman NE¼ SW¼ Sec 20-3N-66W S½
8. At the time of the administrative hearing, the Applicant withdrew the Hingley Farms from the Application.
9. Testimony and evidence was presented that average gas recovery in the nine (9) section areas surrounding the four (4) proposed additional wells ranges from thirteen percent (13%) to twenty-six percent (26%) of the original gas in place with two (2) wells per 320-acre drilling and spacing unit.
10. That in order to prevent waste and protect the correlative rights additional wells are necessary to recover remaining "J" Sand Formation reserves.
11. NARCO described possible testing methods to be used to obtain bottom hole pressures in the proposed and existing wells in the sections described above in Finding No. 7.
12. That testimony indicated that drilling and production of a third "J" Sand Formation well for the application lands will be considered a pilot test.
13. NARCO testified that requests to recomplete the four (4) proposed wells to the Codell and Niobrara Formations would not be requested for approximately twelve (12) months from the date production from the "J" Sand Formation is obtained.
14. At the time of the administrative hearing, the Applicant agreed to be bound by oral order of the Commission.
15. Based on the facts stated in the application, having received no protests and having been heard by the Hearing Officer who recommends approval of the application, an order of the Commission should be entered amending Order Nos. 407-185 and 232-140, allowing the drilling of an additional "J" Sand Formation well for each of the 320-acre drilling and spacing units in the above-listed lands to be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction. Once drilled and completed, these will be the third "J" Sand Formation wells for the 320-acre drilling and spacing units and allow the wells to be recompleted to the Codell and Niobrara Formations and commingle production from these formations with production from the "J" Sand Formation.
NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-185 and 232-140 are hereby amended to allow the drilling of an additional "J" Sand Formation well for each of the 320-acre drilling and spacing units in the below-listed lands to be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction.
Proposed well Location 320-acre Drilling/Spacing Unit
Ione NE¼ SW¼ Sec 2-2N-66W W½
Ione NW¼ SW¼ Sec 4-2N-66W S½
Sullivan SW¼ SE¼ Sec 26-2N-68W S½
Barclay-Crisman NE¼ SW¼ Sec 20-3N-66W S½
IT IS FURTHER ORDERED, that the Applicant shall request Commission approval not before approximately twelve (12) months from the date production is obtained from the "J" Sand Formation to recomplete the wells to the Codell and Niobrara Formations and commingle production from these formations with production from the "J" Sand Formation.
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.
ENTERED this 19th day of December, 1997, as of November 25, 1997.
AMENDED this _________ day of February, 1998, as of November 25, 1997.
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
April 7, 2023