BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE NIOBRARA FORMATION, HEREFORD FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 421
DOCKET NO. 180100038
TYPE: SPACING
ORDER NO. 421-104 |
REPORT OF THE COMMISSION
The Commission heard this matter on January 29, 2018, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to: 1) vacate two approximate 640-acre drilling and spacing units established by Order No. 421-3 for Section 14, Township 11 North, Range 62 West, 6th P.M., and Section 23, Township 11 North, Range 62 West, 6th P.M.; and 2) establish an approximate 1,280-acre drilling and spacing unit for Sections 14 and 23, Township 11 North, Range 62 West, 6th P.M. for the Garden Creek #16-2314H Well (API No. 05-123-32661), for the production oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Fifth Creek Energy Operating Company, LLC (Operator No. 10629) (“Fifth Creek” 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. Rule 318.a. of the Commission Rules provides a well to be drilled 2,500 feet or grater shall be located not less than 600 feet from any lease line, and shall be located not less than 1,200 feet from any other producible oil or gas well when drilling to the same common source of supply, unless authorized by the Commission upon hearing. Sections 14 and 23, Township 11 North, Range 62 West, 6th P.M., is subject to this Rule for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
5. On October 21, 2010, the Commission entered Order No. 421-3 which, among other things, established 83 approximate 640-acre drilling and spacing units for certain lands, including Section 14, Township 11 North, Range 62 West, 6th P.M., and Section 23, Township 11 North, Range 62 West, 6th P.M., for the production of oil and gas and associated hydrocarbons from the Niobrara Formation, with no more than one horizontal well to be drilled in each unit from a surface location anywhere in the unit with the horizontal leg and bottom-hole location to be not closer than 600 feet from the boundaries of each unit.
6. On December 11, 2017, the Commission entered Order No. 421-98 which, among other things, established an approximate 1,280-acre drilling and spacing unit for Sections 23 and 26, Township 11 North, Range 62 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara, Fort Hays, Codell, and Carlile Formations, and excluded the Garden Creek #16-2314H Well (API No. 05-123-32661) from the unit.
7. On December 11, 2017, the Commission entered Order No. 421-99 which, among other things, established an approximate 1,280-acre drilling and spacing unit for Sections 11 and 14, Township 11 North, Range 62 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara, Fort Hays, Codell, and Carlile Formations, and excluded the Garden Creek #16-2314H Well (API No. 05-123-32661) from the unit.
8. On November 27, 2017, Fifth Creek, by its attorneys, filed a verified application pursuant to §34-60-116, C.R.S., for an order to: 1) vacate the approximate 640-acre drilling and spacing units established by Order 421-3 for Sections 14, Township 11 North, Range 62 West, 6th P.M., and Section 23, Township 11 North, Range 62 West, 6th P.M.; and 2) establish an approximate 1,280-acre drilling and spacing unit for Sections 14 and 23, Township 11 North, Range 62 West, 6th P.M., and approve one horizontal well, the Garden Creek #16-2314H Well (API No. 05-123-32661), for the production oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 11 North, Range 62 West, 6th P.M.
Section 14: All
Section 23: All
9. Applicant states that no additional wells will be authorized in the proposed 1,280-acre unit for the Application Lands, and that it will utilize one well pad in the proposed drilling and spacing unit for the operation of Garden Creek #16-2314H Well, unless an exception is granted by the Director.
10. On January 8, 2018, Fifth Creek, 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.
11. Land testimony and exhibits submitted in support of the Application by Teale Stone, Senior Landman for Fifth Creek, showed that both the mineral and surface interests in the Application Lands are owned in fee, that Fifth Creek owns a partial undivided leasehold ownership interest in the Application Lands, and that the establishment of the proposed drilling and spacing unit is only for the production of the Garden Creek #16-2314H Well (API No. 05-123-32661) from the Niobrara Formation.
12. Geoscience testimony and exhibits submitted in support of the Application by Benjamin Burke, Geoscience Manager for Fifth Creek, showed the Niobrara Formation is present throughout the Application Lands and ranges from approximately 240 to 265 feet thick, and that the Garden Creek #16-2314H Well (API No. 05-123-32661) is currently producing from the Application Lands.
13. Engineering testimony and exhibits submitted in support of the Application by William Irwin, Engineering Advisor for Fifth Creek, demonstrated that the existing Garden Creek #16-2314H Well (API No. 05-123-32661) will not drain more than the requested approximate 1,280-acre drilling and spacing unit in the Niobrara Formation.
14. 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.
15. Fifth Creek agreed to be bound by oral order of the Commission.
16. 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: 1) vacate two approximate 640-acre drilling and spacing units established by Order No. 421-3 for Section 14, Township 11 North, Range 62 West, 6th P.M., and Section 23, Township 11 North, Range 62 West, 6th P.M.; and 2) establish an approximate 1,280-acre drilling and spacing unit for Sections 14 and 23, Township 11 North, Range 62 West, 6th P.M. for the Garden Creek #16-2314H Well (API No. 05-123-32661), for the production oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. The approximate 640-acre drilling and spacing units established by Order No. 421-3 for Section 14, Township 11 North, Range 62 West, 6th P.M., and Section 23, Township 11 North, Range 62 West, 6th P.M., are hereby vacated, for the production oil, gas and associated hydrocarbons from the Niobrara Formation.
2. An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, for the operation of the Garden Creek #16-2314H Well (API No. 05-123-32661), for the production oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 11 North, Range 62 West, 6th P.M.
Section 14: All
Section 23: All
3. No additional wells are authorized in the drilling unit, and Applicant will utilize one well pad in the unit for the operation of Garden Creek #16-2314H Well.
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 35 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 28th day of February, 2018, effective as of January 29, 2018.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Julie Spence Prine, Secretary