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

 

IN THE MATTER OF THE APPLICATION OF KERR-MCGEE OIL & GAS ONSHORE LP FOR AN ORDER TO VACATE ONE APPROXIMATE 200-ACRE DESIGNATED WELLBORE SPACING UNIT AND ONE APPROXIMATE 400-ACRE DESIGNATED WELLBORE SPACING UNIT, ESTABLISHED AND POOLED BY ORDER NO. 407-592 FOR SECTIONS 26 AND 35, TOWNSHIP 3 NORTH, RANGE 66 WEST, 6TH P.M., FOR THE NIOBRARA FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO

)

)

)

)

)

)

)

)

)

)

CAUSE NO. 407

 

DOCKET NO. 1306-UP-109

 

ORDER NO. 407-809

 

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 one approximate 200-acre and one approximate 400-acre designated wellbore spacing units established and pooled by Order No. 407-592 for Sections 26 and 35, 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 February 19, 1992, the Commission entered 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-Niobrara Formation, with the permitted well locations in accordance with the provisions of Order No. 407-1.  Sections 26 and 35, Township 3 North, Range 66 West, 6th P.M. are subject to this Order for the Niobrara Formation.

 

5.         On July 9, 2012, the Commission issued Order No. 407-592 which, among other things, pooled all interests in three designated wellbore spacing units including a 400-acre wellbore spacing unit to accommodate the Brown 37N-26HZ Well and a 200-acre wellbore spacing unit for the Brown 16N-26HZ Well, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.  Sections 26 and 35, Township 3 North, Range 66 West, 6th P.M. are subject to this Order for the Niobrara Formation.

 

 

6.         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.  Sections 26 and 35, Township 3 North, Range 66 West, 6th P.M. are subject to Rule 318A for the Niobrara Formation.

 

7.         On April 17, 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 one approximate 200-acre and one approximate 400-acre designated wellbore spacing units pooled by Order No. 407-592 for the following below-described lands (“Application Lands”) for the Niobrara Formation:

 

            Township 3 North, Range 66 West, 6th P.M.
                        Section 26:      S½ SE¼                                             (400 acres, “WSU #1”)

            Section 35:                       (Brown 37N-26HZ – API No. 05-123-35151)

 

            Township 3 North, Range 66 West, 6th P.M.

            Section 26:      S½ SE¼                                             (200 acres, “WSU #3”)

            Section 35:      E½ E½            (Brown 16N-26HZAPI No. 05-123-35166)

 

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 one approximate 200-acre and one approximate 400-acre designated wellbore spacing units established and pooled by Order No. 407-592 for Sections 26 and 35, Township 3 North, Range 66 West, 6th P.M., for the development and operation of the Niobrara Formation.

 

 

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         One approximate 200-acre and one approximate 400-acre designated wellbore spacing units established and pooled by Order No. 407-592 for the below-described lands, are hereby vacated:

 

            Township 3 North, Range 66 West, 6th P.M.
                        Section 26:      S½ SE¼                                             (400 acres, “WSU #1”)

            Section 35:                       (Brown 37N-26HZ – API No. 05-123-35151)

 

            Township 3 North, Range 66 West, 6th P.M.

            Section 26:      S½ SE¼                                             (200 acres, “WSU #3”)

            Section 35:      E½ E½            (Brown 16N-26HZAPI No. 05-123-35166)

 

2.         Designated Wellbore Spacing Unit #2 for the Brown 37C-26HZ Well (API No. 05-123-35148), established and pooled by Order No. 407-592 shall remain in full force and effect.

 

IT IS FURTHER ORDERED:

 

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