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. 1412-SP-2216
ORDER NO. 421-50 |
REPORT OF THE COMMISSION
The Commission heard this matter on December 15, 2014 at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 421-3 for Section 31, Township 12 North, Range 63 West, 6th P.M. and Section 6, Township 11 North, Range 63 West, 6th P.M., and 2) establish an approximate 1285.19-acre drilling and spacing unit and approve up to one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Anadarko E&P Onshore LLC (Operator No. 2800) (“Anadarko” or “Applicant”) 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 October 21, 2010, the Commission entered Order No. 421-3 which established 83 approximate 640-acre drilling and spacing units for certain lands, and approved one horizontal well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 31, Township 12 North, Range 63 West, 6th P.M. and Section 6, Township 11 North, Range 63 West, 6th P.M. are subject to this Order for the Niobrara Formation.
5. On October 16, 2014 (Amended on November 18, 2014), Anadarko, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: 1) vacate two approximate 640-acre drilling and spacing units established by Order No. 421-3 for Section 31, Township 12 North, Range 63 West, 6th P.M. and Section 6, Township 11 North, Range 63 West, 6th P.M.; and 2) to establish an approximate 1285.19-acre drilling and spacing unit for the below described lands (“Application Lands”) and to approve one horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of the wellbore to be located no closer than 600 feet from the unit boundaries, without exception being granted by the Director:
Township 12 North, Range 63 West, 6th P.M.
Section 31: Lot 1 (39.82 acres), Lot 2 (40.10 acres),
Lot 3 (40.38 acres), Lot 4 (40.66 acres),
E½W½, E½ [All]
Township 11 North, Range 63 West, 6th P.M.
Section 6: Lot 1 (40.49 acres), Lot 2 (40.35 acres),
Lot 3 (40.21 acres), Lot 4 (40.86 acres),
Lot 5 (40.78 acres), Lot 6 (40.78 acres),
Lot 7 (40.76 acres), SE¼NW¼, S½NE¼,
E½SW¼, SE¼ [All]
6. On November 24, 2014, Anadarko, 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.
7. Land testimony and exhibits submitted in support of the Application by Jayson Rayburn, Landman for Anadarko, showed that Anadarko holds a mineral interest and has a right to drill in the Application Lands.
8. Geologic testimony and exhibits submitted in support of the Application by Thomas A. Berkman, Senior Project Geological Advisor for Anadarko, showed that the Niobrara Formation is present throughout the Application Lands, the Niobrara Formation is approximately 135 to 145 feet thick, and the Niobrara Formation is of uniform thickness throughout the Application Lands.
9. Engineering testimony and exhibits submitted in support of the Application by Emily Boecking, Reservoir Engineer for Anadarko, showed that the drainage area for analog horizontal Niobrara Formation wells is estimated at 155 acres, and an approximate 1285.19-acre drilling and spacing unit is therefore not less than the maximum area that can be efficiently, economically and effectively drained by horizontal wells producing oil, gas and associated hydrocarbons from the Niobrara Formation.
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. Anadarko 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 to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 421-3 for Section 31, Township 12 North, Range 63 West, 6th P.M. and Section 6, Township 11 North, Range 63 West, 6th P.M., and 2) establish an approximate 1285.19-acre drilling and spacing unit and approve up to one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. Two approximate 640-acre drilling and spacing units established by Order No. 421-3 for Section 31, Township 12 North, Range 63 West, 6th P.M. and Section 6, Township 11 North, Range 63 West, 6th P.M., are hereby vacated;
2. One approximate 1285.19 acre drilling and spacing unit for the below-described lands, is hereby established, and one horizontal well within the unit, is hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 12 North, Range 63 West, 6th P.M.
Section 31: Lot 1 (39.82 acres), Lot 2 (40.10 acres),
Lot 3 (40.38 acres), Lot 4 (40.66 acres),
E½W½, E½ [All]
Township 11 North, Range 63 West, 6th P.M.
Section 6: Lot 1 (40.49 acres), Lot 2 (40.35 acres),
Lot 3 (40.21 acres), Lot 4 (40.86 acres),
Lot 5 (40.78 acres), Lot 6 (40.78 acres),
Lot 7 (40.76 acres), SE¼NW¼, S½NE¼,
E½SW¼, SE¼ [All]
3. The productive interval of the wellbore shall be located no closer than 600 feet from the unit boundaries, without exception being granted by the Director.
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 8th day of January, 2015, as of December 15, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Jill Dorancy, Acting Secretary