IN THE MATTER OF THE PROMULGATION AND
CAUSE NO. 407
AND ESTABLISHMENT OF FIELD RULES TO
GOVERN OPERATIONS IN CODELL-NIOBRARA
ORDER NO. 407-278
SPACED AREA, WELD COUNTY, COLORADO
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m. on March 31,
1998, 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 Patina Oil & Gas Corporation for an order allowing the Miller
27-4L Well, originally drilled 1,306 feet FNL and 1,116 feet FWL in the NW¼ NW¼
of Section 27, Township 3 North, Range 67 West, 6th P.M., for production from
the "J" Sand Formation to be recompleted at an exception location for production
of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations
for the 80-acre drilling and spacing unit consisting of the W½ NW¼ of said
Section 27.
FINDINGS
The Commission finds as follows:
1. Patina Oil & Gas Corporation, 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 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,
including Section 27, Township 3 North, Range 67 West, 6th P.M. Order No. 407 1
also allows the Director to grant a waiver to location exceptions provided the
owners of contiguous and cornering units file a waiver or consent in writing
agreeing to the location exception.
5. At the time of the administrative hearing, testimony was presented that the
Applicant had sent consent requests to the exception location to all owners in
contiguous and cornering drilling and spacing units as required by applicable
Commission Rules. Testimony indicated that the requested consents were either
executed or no response to the requests were received with one exception. The
exception is a joint letter of protest filed with the Commission on March 18,
1998, from Robert Davis, J. LaVern Davis and Shigeko Yamaguchi, owners in the E½
of the NW¼ who were concerned that the recompletion of the Miller 27-4L Well to
the Codell and Niobrara Formations would drain the Codell and Niobrara
Formations on their adjacent property. On March 25, 1998, the protestants signed
letters withdrawing their protest since an agreement with Patina had been
reached to share the production from the Miller 27-4L Well among the owners in
the 160-acre area consisting of the NW¼ of Section 27, Township 3 North, Range
67 West, 6th P.M.
6. Testimony and evidence was presented indicating that there are no drilling
locations inside the legal Codell and Niobrara Formation drilling window located
in the NW¼ NW¼ of said Section 27, because of existing buildings, and that
drilling a new well for production from the Codell and Niobrara Formations would
not be economic.
7. This matter was heard by the Hearing Officer who recommends approval based
upon the testimony presented at the administrative hearing that an exception to
the permitted well location is necessary to recover additional reserves from the
Codell and Niobrara Formations.
8. At the time of the administrative hearing, the Applicant agreed to be bound
by oral order of the Commission.
9. Based on the facts stated in the application, having resolved the protests
received and having been heard by the Hearing Officer who recommends approval of
the application, an order of the Commission should be entered allowing the
Miller 27-4L Well, originally drilled 1,306 feet FNL and 1,116 feet FWL in the
NW¼ NW¼ of Section 27, Township 3 North, Range 67 West, 6th P.M., for production
from the "J" Sand Formation to be recompleted at an exception location for
production of oil, gas and associated hydrocarbons from the Codell and Niobrara
Formations for the 80-acre drilling and spacing unit consisting of the W½ NW¼ of
said Section 27.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-1 and 407-7 are hereby
amended to allow the Miller 27-4L Well, originally drilled 1,306 feet FNL and
1,116 feet FWL in the NW¼ NW¼ of Section 27, Township 3 North, Range 67 West,
6th P.M., for production from the "J" Sand Formation, to be recompleted at an
exception location for production of oil, gas and associated hydrocarbons from
the Codell and Niobrara Formations for the 80-acre drilling and spacing unit
consisting of the W½ NW¼ of said Section 27.
IT IS FURTHER ORDERED, that should a commercial well be completed at the
location set forth above, the Commission shall, upon application of any
interested person, take such action as will offset any advantage which the
person securing the exception may have over other procedures by reason of the
drilling of the well as an exception location.
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 10th day of April, 1998, as of March 31, 1998.
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 10, 1998
(407-278)