BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

IN THE MATTER OF THE APPLICATION OF CONTINENTAL RESOURCES, INC., FOR AN ORDER APPROVING UP TO TWO HORIZONTAL WELLS WITHIN A 1,280-ACRE DRILLING AND SPACING UNIT LOCATED IN SECTIONS 2 AND 11, TOWNSHIP 7 NORTH, RANGE 60 WEST, 6TH P.M. FOR THE NIOBRARA FORMATION, UNNAMED FIELD, WELD COUNTY, COLORADO

)

)

)

)

)

)

)

)

)

CAUSE NOS. 407 & 535

 

ORDER NOS. 407-725 & 535-214

DOCKET NO. 1211-AW-23

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on November 15, 2012, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to approve up to two horizontal wells within an approximate 1280-acre drilling and spacing unit established for Sections 2 and 11, Township 7 North, Range 60 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Continental Resources, Inc. (“Continental” 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 December 12, 2011, the Commission entered Order No. 407-514 which, among other things, established an approximate 1280-acre drilling and spacing unit, and approved one horizontal well within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Sections 2 and 11, Township 7 North, Range 60 West, 6th P.M. are subject to this Order for the Niobrara Formation.

 

            5.         On January 23, 2012, the Commission entered Order No. 535-137 which, among other things, pooled all interests in an approximate 1280-acre drilling and spacing unit established for Sections 2 and 11, Township 7 North, Range 60 West, 6th P.M., for the development and production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

            6.         On September 17, 2012, Continental Resources, Inc. (“Continental” or “Applicant”), by its attorneys, filed with the Commission pursuant to § 34-60-116 C.R.S., a verified application (“Application”) for an order to approve up to two horizontal wells within an approximate 1280-acre drilling and spacing unit established for the below-described lands (“Application Lands”), 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 600 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director:

 

Township 7 North, Range 60 West, 6th P.M.

                        Section 2:      All      

                        Section 11:    All

 

7.         On November 1, 2012, Continental, 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.

 

8.         Land testimony and exhibits submitted in support of the Application by Matthew D. Callaway, Northern Region Landman for Continental, showed that Continental has a leasehold interest in the Application Lands.

 

9.         Geologic testimony and exhibits submitted in support of the Application by Matthew Liter, Geologist for Continental, showed that the Niobrara Formation underlies the Application Lands.  An isopach map of Niobrara Formation showed the total thickness of the Niobrara averages approximately 295 feet in the area of the Application Lands.  A type log of the Niobrara Formation showed resistivities and density values similar to logs from analogous wells producing from the Niobrara Formation.  Stratigraphic cross-sections and gross thickness isopach tests show the Niobrara to be consistent, continuous, and underlying all the Application Lands.

 

10.       Engineering testimony and exhibits submitted in support of the Application by Kyle Harris, Reservoir Engineer for Continental, showed that analog wells drilled by Applicant and other operators within its Weld County operational area indicate an estimated ultimate recovery (“EUR”) of 276 MBO and a drainage area estimated to be up to 152-acres. 

 

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.       Continental agreed 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 Hearings Officer review of the Application under Rule 511., the Commission should enter an order to approve up to two horizontal wells within an approximate 1280-acre drilling and spacing unit established for Sections 2 and 11, Township 7 North, Range 60 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

ORDER

 

            NOW, THEREFORE IT IS ORDERED, that up to two horizontal wells within an approximate 1280-acre drilling and spacing unit established for the below-described lands, are 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 600 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director:

 

Township 7 North, Range 60 West, 6th P.M.

                        Section 2:      All      

                        Section 11:    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 November, 2012, as of November 15, 2012.

           

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________         

                                                                                    Robert J. Frick, Secretary