BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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: 407-703
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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, and approve one horizontal well within the unit, for
Section 14, Township 5 North, Range 61 West, 6th P.M., for the
production of oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1.
Bill Barrett Corporation
(“BBC” 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, 1988, the Commission adopted Rule 318A 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 Cretaceous
Age Formations from the base of the Dakota Formation to the surface. Rule 318A
supersedes all prior Commission drilling and spacing orders affecting well
location and density requirements of Greater Wattenberg Area wells. On December 5, 2005, Rule 318A was
amended to, among other things, allow interior infill and boundary wells to be
drilled and wellbore spacing units to be established. On August 8, 2011,
Rule 318A was again amended, among other things, to address drilling of
horizontal wells. Section 14, Township 5 North, Range 61 West, 6th
P.M. is subject to Rule 318A for the Niobrara Formation.
5.
On June 21, 2012, EOG Resources, Inc. (“EOG”), by its attorneys, filed
with the Commission pursuant to § 34-60-116 C.R.S., a verified application
(“Application”) for an order to establish an approximate 640-acre drilling and
spacing unit for the below-described lands (“Application Lands”), and to approve
one horizontal well within the unit, for the production of oil, gas and
associated hydrocarbons from the Niobrara Formation, with the treated interval
of the wellbore to be located no closer than 600 feet from the unit boundaries
and no closer than 1,200 feet from the treated interval of any other wellbore
located in the unit, without exception being granted by the Director:
Township 5 North, Range 61 West, 6th P.M.
Section 14: All
6. On August 10, 2012,
BBC, by its attorney, submitted a written letter informing the Commission that
it had obtained its leasehold interest in the Application Lands from EOG.
7. On August 10, 2012,
BBC, 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.
8. Testimony and exhibits
submitted in support of the Application by Colleen Kennedy, Senior Landman for
BBC, showed BBC is a mineral leaseholder for the Application Lands.
9. Testimony and exhibits
submitted in support of the Application by James F. Brand, Petroleum Geologist
for BBC, showed that the Niobrara Formation underlies the entirety of the
Application lands and has an approximate total thickness that ranges from 262 to
267 feet. Additional testimony
showed that the Niobrara Formation is a common source of supply for the
Application Lands.
10. Testimony and exhibits submitted
in support of the Application by Eric Bridgford, Reservoir Engineer for BBC,
showed analogous horizontal wells drilled by EOG and completed in the Niobrara
Formation have an estimated ultimate recovery of between 30,000 to 890,000
barrels (“BBL”) of oil, with the estimated original oil-in-place varying between
600,000 to 18,000,000 BBL. Drainage
area of these same EOG wells range from 21 to 618 acres, and are smaller than
the requested 640-acre spacing unit.
Engineering testimony and exhibits support approval of an approximate 640-acre
drilling and spacing unit for the Niobrara Formation underlying the Application
Lands to efficient and economically drain the reservoir while protecting
correlative rights and avoiding waste of the resource.
11. 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.
12. BBC
agrees 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, the Commission should enter an order to establish an approximate 640-acre
drilling and spacing unit, and approve one horizontal well within the unit, for
Section 14, Township 5 North, Range 61 West, 6th P.M., for the
production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
NOW, THEREFORE IT IS ORDERED, that an approximate 640-acre drilling and spacing
unit, for the below-described lands, is hereby established, and one horizontal
well within the unit, is hereby approved, for the production of oil, gas and
associated hydrocarbons from the Niobrara Formation, with the treated interval
of the wellbore to be located no closer than 600 feet from the unit boundaries
and no closer than 1,200 feet from the treated interval of any other wellbore
located in the unit, without exception being granted by the Director:
Township 5 North, Range 61 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 24, 2012