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.
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