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. 407-678
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REPORT OF THE COMMISSION
The Commission heard this matter on August 20, 2012, at the offices of the
Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver,
Colorado, upon application for an order to establish an approximate 640-acre
drilling and spacing unit for Section 14, Township 3 North, Range 63 West, 6th
P.M., and approve up to four horizontal wells within the unit, for the
production of oil, gas and associated 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.
On April 27, 1998, the Commission
adopted Rule 318A., the Greater Wattenberg Well Location Rule (“GWA” Rule),
which, among other things, allowed certain drilling locations to be utilized to
drill or twin a well, deepen a well or recomplete a well and to commingle any or
all of the Cretaceous Age Formations from the base of the Dakota Formation to
the surface. Pursuant to Rule 318A.k., Rule 318A. supersedes all prior
Commission drilling and spacing orders affecting well location and density
requirements of Greater Wattenberg Area wells. Section 14, Township 3
North, Range 63 West, 6th P.M. is
subject to Rule 318A., for the production of oil, gas and associated
hydrocarbons from the Niobrara Formation.
Township 3 North, Range 63 West, 6th P.M.
Section 14: All
6.
On April 11, 2012, Marathon requested, and Commission Staff granted, a
continuance to the May 29, 2012 Commission hearing.
7.
On May 2, 2012, Marathon requested, and Commission Staff granted, a
continuance to the July 9, 2012 Commission hearing.
8.
On June 19, 2012, Marathon requested, and Commission Staff granted, a
continuance to the August 20, 2012 Commission hearing.
9.
On August 7, 2012, Marathon, by its attorneys, filed with the Commission
a written request to approve the Amended Application based on the merits of the
verified Amended Application and the supporting exhibits. Sworn written
testimony and exhibits were submitted in support of the Amended Application.
10.
Land testimony and exhibits submitted in
support of the Application by Tricia Clarke, Land Professional for Marathon,
showed that the Applicant has fully leased the mineral interests in the
Application Lands, that the Application Lands are both state and private fee
leases and that the interested parties received notice of the Application.
11.
Geologic testimony and exhibits submitted in support of the Amended Application
by Matthew Humpphreys, Advanced Senior Geologist for Marathon, showed the
Niobrara Formation underlies most of the DJ Basin in eastern Colorado,
southeastern Wyoming, and western Nebraska.
An isopach map of the Niobrara Formation showed total thickness of the
Niobrara Formation ranges from 275 feet to 285 feet in the Application Lands. A stratigraphic cross-section, from
across the Application Lands, showed the Niobrara Formation to be consistent,
continuous, and underlying all the Application Lands as a common source of
supply.
12. Engineering testimony and exhibits
submitted in support of the Amended Application by Tara Watson, Reservoir
Engineer for Marathon, showed drainage
areas ranging from 46 to 534-acres with an average of 177-acres. Testimony concluded the Silo field
has been a major producer since the early 1980’s and showed the project is
considered to be economically viable.
13. The
above-referenced testimony and exhibits show that granting the Amended
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.
Marathon
agreed to be bound by oral order of the Commission.
15.
Based on the facts stated in the verified Amended Application, having received
no protests, and based on the Hearing Officer review of the Application under
Rule 511., the Commission should enter an order to establish an approximate
640-acre drilling and spacing unit for Section 14, Township 3 North, Range 63
West, 6th P.M., and authorize drilling up to four horizontal wells
within the unit, for the production of oil, gas and associated hydrocarbons from
the Niobrara Formation.
ORDER
Township 3 North, Range 63 West, 6th P.M.
Section 14: All
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
day of August, 2012, as of
August 20, 2012.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary
Dated: August 30, 2012