BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE APPLICATION OF KERR-MCGEE OIL & GAS ONSHORE LP FOR AN
ORDER TO VACATE AN APPROXIMATE 320-ACRE DESIGNATED WELLBORE SPACING UNIT
ESTABLISHED AND POOLED BY ORDER NO. 407-561 FOR THE CAMP 37N-26HZ WELL LOCATED
IN SECTION 26, TOWNSHIP 3 NORTH, RANGE 66 WEST, FOR THE NIOBRARA FORMATION,
WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 407
DOCKET NO. 1306-UP-104
ORDER NO. 407-806 |
REPORT OF THE COMMISSION
The Commission heard this matter on June 17, 2013, at the Two Rivers Convention
Center, 159 Main Street, Grand Junction, Colorado, upon application for an order
to vacate an approximate 320-acre designated wellbore spacing unit (WSU #3 for
the Camp 37N-26HZ Well) established and pooled by Order No. 407-561 for Section
26, Township 3 North, Range 66 West, 6th P.M., for the development
and operation of the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1.
Kerr-McGee Oil & Gas Onshore LP
(“Kerr-McGee” 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, among other things, to 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 26, Township 3 North, Range 66 West, 6th P.M. is subject to Rule 318A for the Niobrara
Formation.
5.
On February 19, 1992, the Commission issued Order No. 407-87 (amended
August 20, 1993) which, among other things, established 80-acre drilling and
spacing units for the production of oil, gas and associated hydrocarbons from
the Codell and Niobrara Formations, with the permitted well locations in
accordance with the provisions of Order No. 407-1. Section 26, Township 3 North, Range
66 West, 6th P.M. is subject to
this Order for the Niobrara Formation.
6.
On March 5, 2012, the Commission entered Order No. 407-561 which, among
other things, pooled all interests in an approximate 320-acre designated
wellbore spacing unit (“WSU #3”)
established for the E½ of Section 26, Township 3 North, Range 66 West, 6th
P.M. to accommodate the Camp 37N-26HZ Well (API No. 05-123-34956) (“Well”). Section 26, Township 3 North, Range
66 West, 6th P.M. is subject to this Order for the Niobrara
Formation.
7.
On April 18, 2013, Kerr-McGee,
by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a
verified application (“Application”) for an order to vacate the approximate
320-acre designated wellbore spacing unit (WSU #3 for the Camp 37N-26HZ Well)
established and pooled by Order No. 407-561 for the below-described lands
(“Application Lands”) for the Niobrara Formation:
Township 3 North, Range 66 West, 6th P.M.
Section 26:
E½
(WSU #3 – Camp 37N-26HZ, Niobrara)
8.
On June 4, 2013, Kerr-McGee,
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.
9.
Land testimony and exhibits submitted in support of the Application by
David Sullivan, Senior Landman for Kerr-McGee, showed that all owners were
notified of the Application at least 30 days prior to the June 17, 2013 hearing
date.
10. 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.
11.
Kerr-McGee agreed to be bound by
oral order of the Commission.
12.
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 vacate an approximate 320-acre
designated wellbore spacing unit (WSU #3 for the Camp 37N-26HZ Well) established
and pooled by Order No. 407-561 for Section 26, Township 3 North, Range 66 West,
6th P.M., for the development and operation of the Niobrara
Formation.
ORDER
IT IS HEREBY ORDERED:
1.
The approximate 320-acre designated wellbore spacing unit (WSU #3 for the
Camp 37N-26HZ Well) established and pooled by Order No. 407-561 for the
below-described lands, is hereby vacated:
Township 3 North, Range 66 West, 6th P.M.
Section 26:
E½
(WSU #3 – Camp 37N-26HZ, Niobrara)
1.
The provisions contained in the above order shall become effective
immediately.
2.
The Commission expressly reserves its right, after notice and hearing, to
alter, amend or repeal any and/or all of the above orders.
3.
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.
4.
An application for reconsideration by the Commission of this Order is not
required prior to the filing for judicial review.
ENTERED THIS
8th
day of July, 2013, as of June 17, 2013.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary