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

 

IN THE MATTER OF THE APPLICATION OF BILL BARRETT CORPORATION FOR AN ORDER TO ESTABLISH AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT FOR SECTION 30, TOWNSHIP 6 NORTH, RANGE 61 WEST, 6TH P.M., FOR THE NIOBRARA FORMATION, AND TO ESTABLISH AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT FOR SECTION 30, TOWNSHIP 6 NORTH, RANGE 61 WEST, 6TH P.M., FOR THE CODELL FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NOS. 407 & 535

 

DOCKET NO. 1307-SP-1124

 

ORDER NOS. 407-823 & 535-383

 

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, Denver, Colorado, upon application for an order to approve an additional seven horizontal wells, for a total of up to eight horizontal wells, within an approximate 640-acre drilling and spacing unit established for Section 30, Township 6 North, Range 61 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation. and  to establish an approximate 640-acre drilling and spacing unit, and approve up to four horizontal wells within the unit, 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 February 22, 2011 (Corrected April 4, 2013), the Commission entered Order No. 535-4 which, among other things, established 74 approximate 640-acre drilling and spacing units, and approved one horizontal well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Section 30, Township 6 North, Range 61 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

5.         On January 23, 2012, the Commission entered Order No. 407-529 which approved a well location exception to the requirements of Commission Rule 318A Greater Wattenberg Area drilling windows for the Greasewood #15-30H Well, to be drilled from a surface location of 501 feet FSL and 2,639 feet FWL in the SE¼ SW¼ of Section 30, Township 6 North, Range 61 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from 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.  Section 30, Township 6 North, Range 61 West, 6th P.M. is subject to Rule 318A for the Codell and Niobrara Formations.

 

7.         On May 30, 2013, BBC, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an order to: 1) approve an additional seven horizontal wells, for a total of up to eight horizontal wells, within an approximate 640-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; and 2) establish an approximate 640-acre drilling and spacing unit for the 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 wellbore to be located no closer than 460 feet from the unit boundaries, and no closer than 150 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director:   

 

            Township 6 North, Range 61 West, 6th P.M.

                        Section 30:      All

 

Applicant stated the proposed wells shall be located on no more than two multi-well pads within the drilling and spacing unit within Rule 318A drilling windows or on adjacent lands with surface owner consent.

 

8.         On July 16, 2013, BBC, 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 Hal Writer, Senior Landman for BBC, showed the Applicant has a leasehold interest in the Applicant Lands with the right to drill.

 

10.       Geologic testimony and exhibits submitted in support of the Application by John G. Roesink, Senior Petroleum Geologist for BBC, showed that the Niobrara Formation underlies the entirety of the Application Lands and ranges from approximately 265 to 268 feet thick, and the Codell Formation also underlies the entirety of the Application Lands and ranges in thickness from about 11 to 12 feet.  The testimony showed that the Niobrara Formation and the Codell Formation are consistent, continuous, and underlying all of the Application Lands. 

 

11.       Engineering testimony and exhibits submitted in support of the Application by Mark Stouffer, Manager of Reservoir Engineering Advisor for BBC, showed that drilling and completing horizontal wells within the Codell and Niobrara Formations underlying the Application Lands is an efficient and economic method of developing the resource.  Further testimony revealed the well drainage area for 640-acre laterals would accommodate up to eight (8) horizontal Niobrara wells and up to four (4) 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 Application, having resolved all protests, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order 1) to approve an additional seven horizontal wells, for a total of up to eight horizontal wells, within an approximate 640-acre drilling and spacing unit established for Section 30, Township 6 North, Range 61 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation: and 2) to establish an approximate 640-acre drilling and spacing unit, and approve up to four horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation.

 

ORDER

 

IT IS HEREBY ORDERED that:

 

1.            An additional seven horizontal wells, for a total of up to eight horizontal wells within an approximate 640-acre drilling ans spacing unit established for the below-described lands, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

2.            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 61 West, 6th P.M.

                        Section 30:      All

 

3.            The treated interval of the horizontal wellbore shall be no closer than 460 feet from the unit boundaries, and no closer than 150 feet from the treated interval of any other wellbore located in the unit.

 

4.            The proposed wells shall be located on no more than two multi-well pads within the drilling and spacing unit within Rule 318A drilling windows.

 

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