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

 

IN THE MATTER OF THE AMENDED APPLICATION OF BILL BARRETT CORPORATION FOR AN ORDER TO ESTABLISH AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT, AND APPROVE UP TO FOUR HORIZONTAL WELLS WITHIN THE UNIT, FOR SECTION 23, TOWNSHIP 6 NORTH, RANGE 62 WEST, 6TH P.M., FOR THE CODELL FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NOS. 407 & 535

 

DOCKET NO. 1305-SP-78

 

ORDER NOS. 407-813 & 535-396

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on July 29, 2013, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to establish an approximate 640-acre drilling and spacing unit for Section 23, Township 6 North, Range 62 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Codell 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, 1998, 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 23, Township 6 North, Range 62 West, 6th P.M. is subject to Rule 318A for the Codell Formation.

 

5.         On March 7, 2013 (Amended April 18, 2013), BBC, by its attorneys, filed with the Commission pursuant to § 34-60-116 C.R.S., a verified amended application (“Amended Application”) for an order to establish an approximate 640-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to four horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation, with the treated interval of the permitted well to be located not less than 460 feet from the proposed unit boundaries and an interwell setback not less than 250 feet from the treated interval of any well producing from the Codell Formation, from a surface location authorized by Rule 318A(I).a., or on other lands with consent of the landowner, without exception from the Director:

  

            Township 6 North, Range 62 West, 6th P.M.

                        Section 23:      All

 

6.         On April 12, 2013, BBC, by its attorneys, requested, and the Commission staff granted, a continuance to the June hearing.

 

7.         On June 13, 2013, BBC, by its attorneys, requested and the Commission staff granted, a continuance to the July hearing.

 

8.         On June 13, 2013, BBC, by its attorneys, filed with the Commission a written request to approve the Amended Application based on the merits of the verified Application and the supporting exhibits.  Sworn written testimony and exhibits were submitted in support of the Amended Application.

 

9.         Land testimony and exhibits submitted in support of the Amended Application by Hal Writer, Senior Landman for BBC, showed that the Applicant had a leasehold interest and a right to drill in the Application Lands.

 

10.       Geologic testimony and exhibits submitted in support of the Amended Application by John Roesink, Petroleum Geologist for BBC, showed that the Codell Formation underlies the entirety of the Application Lands and ranges from 10 to 12 feet thick.  Further testimony showed the Codell Formation is a sequence of siltstones and sandstones and is a common source of supply.

 

11.       Engineering testimony and exhibits submitted in support of the Amended Application by Mark Stouffer, Reservoir Engineering Advisor for BBC, showed that drilling and completing horizontal wells within the Codell Formation underlying the Application Lands is an efficient and economic method of developing the resource.  Further testimony revealed the well drainage area for 640-acre would accommodate up to four horizontal Codell wells. Testimony concluded the economics of the project were sound.

 

12.       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.

 

13.       BBC agreed to be bound by oral order of the Commission. 

 

14.       Based on the facts stated in the verified Amended Application, having received no protests, and based on the Hearing Officer review of the Amended Application under Rule 511, the Commission should enter an order to establish an approximate 640-acre drilling and spacing unit for Section 23, Township 6 North, Range 62 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Codell Formation.

 

 

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 640-acre drilling and spacing unit for the below-described lands, is hereby established, and up to four horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation:

 

Township 6 North, Range 62 West, 6th P.M.

                        Section 23:      All

 

2.         The treated interval of the horizontal wellbore shall be no closer than 460 feet from the unit boundaries, and no closer than 250 feet from the treated interval of any other wellbore located in the unit.

 

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 Procedures 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   27   day of August, 2013, as of July 29, 2013.

           

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary