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 FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
ORDER NO. 407-501 CORRECTED |
REPORT OF COMMISSION
The Commission heard this matter on October 31, 2011, at the City of Littleton Council Chambers, 2255 West Berry Avenue, Littleton, Colorado 80120 upon application for an order to establish 12 approximate 640-acre drilling and spacing units for certain lands located in Townships 6 and 7 North, Ranges 61 and 62 West, 6th P.M., and approve one horizontal well within each unit for the production of oil, gas, and related hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Marathon Oil Company (“Marathon” or “Applicant”), 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 318.a. of the Rules and
Regulations of the Oil and Gas Conservation Commission requires that wells
drilled in excess of 2,500 feet in depth be located not less than 600 feet from
any lease line, and located not less than 1,200 feet from any other producible
or drilling oil or gas well when drilling to the same common source of supply.
Certain lands located in Townships 6 and 7 North, Ranges 61 and 62 West,
6th P.M. are subject to this Rule for the Niobrara Formation.
5. Rule 318A. requires, among other things, that when completing a Greater Wattenberg Area (“GWA”) well to an unspaced formation, the operator shall designate a drilling and spacing unit not smaller than a governmental quarter-quarter section if such well is proposed, to be located greater than 460 feet from the quarter-quarter section boundary of which it is located, and that the surface location for wells drilled from the base of the Dakota Formation to the surface shall be located within designated 400 foot and/or 800 foot windows. Certain lands located in Townships 6 and 7 North, Ranges 61 and 62 West, 6th P.M. are subject to this Rule for the Niobrara Formation.
6. On July 21, 2011, Marathon, by its attorneys, filed with the Commission a verified application (“Application”) for an order to establish sixteen approximate 640-acre drilling and spacing units for the below-listed lands, and approve one horizontal well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the wellbore for the permitted well to be no closer than 460 feet from the unit boundaries, without exception being granted by the Director:
Township 6 North, Range 61 West, 6th P.M.
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Section 27 |
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Township 6 North, Range 62 West, 6th P.M.
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Section 4 |
Township 7 North, Range 61 West, 6th P.M.
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Sections 10, 15, 18 and 31 |
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Township 7 North, Range 62 West, 6th P.M.
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Sections 2, 13, 14, 22, 23, 25, 26, 27, 34 and 35 |
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7. On October 18, 2011, Marathon, by its attorneys, withdrew the below described lands from the Application:
Township
6 North, Range 62 West, 6th P.M.
Section 4
Township
7 North, Range 61 West, 6th P.M.
Sections 10 and 15
Township
7 North, Range 62 West, 6th P.M.
Section 34
8. The below described lands remain subject to the application (“Application Lands”):
Township
6 North, Range 61 West, 6th P.M.
Section 27
Township 7 North, Range 61 West, 6th P.M.
Sections 18 and 31
Township
7 North, Range 62 West, 6th P.M.
Sections 2, 13, 14,
22, 23, 25, 26, 27 and 35
9. On October 18, 2011, Marathon, by its attorneys, 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. Land testimony and exhibits submitted in support of the Application by Tricia Clarke, Land Professional for Marathon, showed that the Applicant has either fully or partially leased the mineral interests in each section of the Application Lands and that the Application Lands are a combination of private fee, federal and state leases.
11. Geologic testimony and exhibits submitted in support of the Application by Matthew Humphreys, Advanced Senior Geologist for Marathon, showed that the Niobrara Formation underlies and is a drilling objective for the Application Lands.
12. Engineering testimony and exhibits submitted in support of the Verified Application by Tara Salinas, Reservoir Engineer for Marathon, showed that Type Well drainage estimates vary from 29 to 504 acres, smaller than the 640-acre drilling and spacing unit, therefore resulting in efficient and economic recovery of hydrocarbons and protecting correlative rights.
13. The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.
14. The Application was reviewed by the Colorado Department of Public Health and Environment (“CDPHE”) pursuant to consultation provisions of Rule 306.d. In a letter dated October 20, 2011, the CDPHE Oil & Gas Coordinator indicated that CDPHE does not believe any additional conditions of approval are necessary for approving the amended Application.
15. Marathon agreed to be bound by oral order of the Commission.
16. 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., the Commission should enter an order establish 12 approximate 640-acre drilling and spacing units for certain lands located in Townships 6 and 7 North, Ranges 61 and 62 West, 6th P.M.; and approve one horizontal well within each unit for the production of oil, gas, and related hydrocarbons from the Niobrara Formation.
ORDER
NOW, THEREFORE IT IS ORDERED, that 12 approximate 640-acre drilling and spacing units, are hereby established, for the below-listed lands; and one horizontal well within each unit is approved for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the wellbore for the permitted well to be no closer than 460 feet from the unit boundaries, without exception being granted by the Director:
Township
6 North, Range 61 West, 6th P.M.
Section 27
Township 7 North, Range 61 West, 6th P.M.
Sections 18 and 31
Township
7 North, Range 62 West, 6th P.M.
Sections 2, 13, 14,
22, 23, 25, 26, 27 and 35
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective immediately.
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 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 7th day of November, 2011, as of October 31, 2011.
CORRECTED this 10th day of January, 2012, as of October 31, 2011
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Peter J. Gowen, Acting Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
November 7, 2011
CORRECTED January 10, 2012