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

 

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE HEREFORD FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 421

 

ORDER NO. 421-12

 

 

REPORT OF COMMISSION

 

                        The Commission heard this matter on October 31, 2011, at the City of Littleton Council Chambers, 2255 West Berry Avenue, Littleton, Colorado 80120 upon application for an order to authorize three additional horizontal wells, for a total of up to four horizontal wells, for the approximate 640-acre drilling and spacing unit established for Section 7, Township 11 North, Range 62 West, 6th P.M., for the production of oil, gas, and related hydrocarbons  of the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.    EOG Resources, Inc. (“EOG” 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, 2010, the Commission issued Order No. 421-1, which, among other things, established approximate 640-acre drilling and spacing units for certain lands, including Section 7, Township 11 North, Range 62 West, 6th P.M., and approved of one horizontal well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

5.  On July 21, 2011, EOG Resources, Inc. (“EOG” or “Applicant”), by its attorneys, filed with the Commission a verified application (“Application”) for an order authorizing three additional horizontal wells, for a total of up to four horizontal wells, for the approximate 640-acre drilling and spacing unit established for the below-listed lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the permitted well to be located no closer than 600 feet from the boundaries of the unit and with no interwell setback:

                                       

Township 11 North, Range 62 West, 6th P.M.

Section 7:

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6.  On October 18, 2011, EOG, by its attorney, 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.

 

                        7.  Testimony and exhibits submitted in support of the Application by Jason McLaren, Landman for EOG, showed that EOG owns 100% of the mineral interest in the Application lands, and that the minerals are owned in fee.

 

                        8.  Geology testimony and exhibits submitted in support of the Application by John Melby, Petroleum Geologist for EOG, shows that the Niobrara Formation underlies the entire Application Lands with a total thickness range from 265 to 273 feet, and a regional dip approximately 25 feet to the northwest.

 

9.  Engineering testimony and exhibits submitted in support of the Application by Osman Apaydin, Reservoir Engineer for EOG summarizes original oil in place and estimated ultimate recovery for nearby wells to estimate drainage areas for horizontal wells within the Application Lands to be between 28 and 212 acres. He believes that spacing wells tighter than the currently authorized one per 640 acres is justified for purposes of enhancing resource recovery and preventing waste.

 

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.  EOG 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 authorizing three additional horizontal wells, for a total of up to four horizontal wells, for the approximate 640-acre drilling and spacing unit established for Section 7, Township 11 North, Range 62 West, 6th P.M., for the production of oil, gas, and related hydrocarbons  of the Niobrara Formation.

 

ORDER

 

                        NOW, THEREFORE IT IS ORDERED, that an approximate 640-acre drilling and spacing unit is hereby established for the below-listed lands, and  three additional horizontal wells, for a total of up to four horizontal wells, are hereby authorized for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the permitted wells to be located no closer than 600 feet from the boundaries of the unit,  but with no interwell setback within the unit:

           

Township 11 North, Range 62 West, 6th P.M.

Section 7:

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IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective immediately.

           

                        IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

 

                        IT IS FURTHER ORDERED, that 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.

                       

                        IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

 

                        ENTERED this   7th  day of November, 2011, as of October 31, 2011.

           

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________         

                                                                                    Peter J. Gowen, Acting Secretary

 

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

November 7, 2011