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 CODELL FORMATION, HEREFORD FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 421
DOCKET NO. 1412-SP-2201
ORDER NO. 421-57 AMENDED |
REPORT OF THE COMMISSION
The Commission heard this matter on April 13, 2015 at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to establish 12 approximate 1280-acre drilling and spacing unit for various sections in Township 11 and 12 North, Range 63 West, 6th P.M., and approve up to one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation.
FINDINGS
The Commission finds as follows:
1. EOG Resources, Inc. (“EOG” 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. Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that, on unspaced lands, wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and located not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply.
5. On October 16, 2014 (Amended November 16, 2014), EOG, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to establish 12 approximate 1280-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to one horizontal well within the unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation, with the productive interval of the wellbore to be located no closer than 600 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:
Township 11 North, Range 63 West, 6TH P.M. – DSU #1
Section 7: All
Section 18: All
Township 11 North, Range 63 West, 6TH P.M. – DSU #2
Section 8: All
Section 17: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #3
Section 20: All
Section 29: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #4
Section 21: All
Section 28: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #5
Section 22: All
Section 27: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #6
Section 23: All
Section 26: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #7
Section 24: All
Section 25: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #8
Section 31: All
Township 11 North, Range 63 West, 6TH P.M.
Section 6: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #9
Section 32: All
Township 11 North, Range 63 West, 6TH P.M.
Section 5: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #10
Section 33: All
Township 11 North, Range 63 West, 6TH P.M.
Section 4: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #11
Section 34: All
Township 11 North, Range 63 West, 6TH P.M.
Section 3: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #12
Section 36: All
Township 11 North, Range 63 West, 6TH P.M.
Section 1: All
6. On November 24, 2014, EOG, 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. On December 1, 2014, Extraction Oil and Gas, Inc. (“Extraction” or “Protestant”) filed a protest to the request in the Application to establish two approximate 1280-acre drilling and spacing units for Sections 20 and 29, Township 12 North, Range 63 West, 6TH P.M. (“DSU #3”) and Section 32, Township 12 North, Range 63 West, 6TH P.M. and Section 5, Township 11 North, Range 63 West, 6TH P.M. (“DSU #9).
8. On December 2, 2014, EOG and Extraction, by their attorneys, requested, and Commission staff granted, a continuance to the January hearing.
9. On January 2, 2015, EOG, by its attorneys requested to bifurcate the Application to exclude DSU #3 and DSU #9 from Commission consideration and allow the remainder of the Application to be heard at the January 26, 2015 hearing.
10. On January 15, 2015, EOG and Extraction, by their attorneys, requested, and Commission staff granted, a continuance to the March 2015 hearing.
11. On February 17, 2015, EOG and Extraction, by their attorneys, requested, and Commission staff granted, a continuance to the April 2015 hearing.
12. On March 31, 2015, EOG withdrew its request to establish a drilling and spacing unit for Section 32, Township 12 North, Range 63 West, 6TH P.M. and Section 5, Township 11 North, Range 63 West, 6TH P.M. (DSU # 9) from the Application.
13. On March 31, 2015, Extraction withdrew its Protest of DSU #3 for Sections 20 and 29, Township 12 North, Range 63 West, 6TH P.M. (“DSU #3”).
14. Land testimony and exhibits submitted in support of the Application by Jason McLaren, Landman for EOG, showed that both the mineral and surface interests are owned both in fee and by the State of Colorado, and that EOG owns a partial leasehold/mineral ownership interest in the Application Lands.
15. Geoscience testimony and exhibits submitted in support of the Application by Matthew L. Nobles, Petroleum Geologist for EOG, showed the Codell Formation is present throughout the Application Lands, is approximately 17-23 feet thick, and is generally of uniform thickness throughout the Application Lands.
16. Engineering testimony and exhibits submitted in support of the Application by Danny Frederick, Reservoir Engineer for EOG, demonstrated that the drainage area of a horizontal well in the Codell formation offsetting the Application Lands is 157 acres, that the proposed 1280-acre drilling and spacing units, with the requested setbacks, for a horizontal wells in the Codell Formation in the Application Lands, will promote efficient drainage, protect correlative rights, and prevent waste.
17. 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.
18. EOG agreed to be bound by oral order of the Commission.
19. 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 establish 10 approximate 1280-acre drilling and spacing unit for various sections in Township 11 and 12 North, Range 63 West, 6th P.M., and approve up to one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation.
ORDER
IT IS HEREBY ORDERED:
1. Eleven approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of one horizontal well within the unit, is hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation:
Township 11 North, Range 63 West, 6TH P.M. – DSU #1
Section 7: All
Section 18: All
Township 11 North, Range 63 West, 6TH P.M. – DSU #2
Section 8: All
Section 17: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #3
Section 20: All
Section 29: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #4
Section 21: All
Section 28: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #5
Section 22: All
Section 27: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #6
Section 23: All
Section 26: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #7
Section 24: All
Section 25: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #8
Section 31: All
Township 11 North, Range 63 West, 6TH P.M.
Section 6: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #10
Section 33: All
Township 11 North, Range 63 West, 6TH P.M.
Section 4: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #11
Section 34: All
Township 11 North, Range 63 West, 6TH P.M.
Section 3: All
Township 12 North, Range 63 West, 6TH P.M. – DSU #12
Section 36: All
Township 11 North, Range 63 West, 6TH P.M.
Section 1: All
2. The productive interval of the wellbore will be located no closer than 600 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, 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 27th day of February, 2015, as of January 26, 2015.
AMENDED this 27th day of April 2015, as of April 13, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Julie Murphy, Secretary