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 AND NIOBRARA
FORMATIONS, HEREFORD FIELD, WELD COUNTY, COLORADO
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CAUSE NO. 421
DOCKET NO. 150700364
ORDER NO. 421-65
TYPE: ADDITIONAL
WELLS
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REPORT OF THE COMMISSION
The Commission heard this matter on July 20, 2015, at the Colorado Oil and Gas Conservation Commission, 1120
Lincoln Street, Suite 801, Denver, Colorado,
upon application for an order to: 1) approve an additional six horizontal wells, for a
total of seven horizontal wells, within an approximate 1,318.71-acre drilling
and spacing unit established for Sections 16, 21, and 28, Township 12 North, Range 64 West, 6th
P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara
Formation; and 2) approve an additional five horizontal wells, for a total of six
horizontal wells, within an approximate 1,318.71-acre drilling and spacing unit established for Sections 16, 21, and 28, Township
12 North, Range 64 West, 6th P.M., for the production of oil, gas
and associated hydrocarbons from the Codell Formation.
FINDINGS
The Commission finds as follows:
1.
Anadarko
E&P Onshore LLC (Operator
No. 2800) (“Anadarko” 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 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 December 15, 2014,
the Commission approved Order No. 421-54 which, among other things, established
an approximate 1,318.71-acre drilling and spacing unit for the Application
Lands, for the production of oil, gas and associated hydrocarbons from the
Codell and Niobrara Formations, respectively, and approved one horizontal well
for the Codell Formation and one horizontal well for the Niobrara Formation
within the unit, with the productive interval of each wellbore being no closer
than 600 feet from the unit boundary.
6.
On May 5, 2015, Anadarko, by its attorneys, filed with the Commission a
verified application (“Application”) for an order to: 1) authorize an additional six horizontal
wells, for a total of seven horizontal wells, in an approximate 1,318.71-acre
drilling and spacing unit for the below described lands (“Application Lands”),
for the the production of oil, gas, and associated hydrocarbons from the Niobrara
Formation; 2) authorize an additional five horizontal wells, for a total of six
horizontal wells, in an approximate 1,318.71-acre drilling and spacing unit for
the Application lands, for the production oil, gas, and associated hydrocarbons
from the Codell Formation, and 3) require the productive interval of the
wellbore to be located not less than 600 feet from the unit boundaries, and not
less than 150 feet from the treated interval of any well from the Niobrara or
Codell Formations, without exception being granted by the Director:
Township 12 North, Range 64 West, 6th P.M.
Section 16: Lots 1-4 (lying and being within the State of Colorado)
Section 21: All
Section 28: All
7.
Applicant
states that any horizontal well to be drilled under this Application will be
drilled from the surface of the drilling unit, or on adjacent lands with
consent of the landowner, unless an exception is granted by the Director.
8.
On June 29, 2015, 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.
9.
Land testimony
and exhibits submitted in support of the Application by Jason Rayburn, Senior Landman
for Anadarko, showed that Anadarko owns
substantial leasehold interests in the Application Lands.
10.
An affidavit
signed by Thomas A. Berkman, Senior Project Advisor for Anadarko, requested
that the Commission take administrative notice of the geologic testimony and
exhibits on file with the Commission for Order Number 535-667 covering lands in
the vicinity of the lands that are the subject of this Application. Geologic testimony
and exhibits submitted in support of the application for Order Number 535-667
showed that the Codell and Niobrara Formations underlie the entirety of the
Application Lands. The Codell Formation ranges from approximately 18 to 20
feet thick, and the Niobrara Formation ranges from 134 to 135 feet thick.
11.
An affidavit
signed by Emily Boeking, Reservoir Engineer for Anadarko, requested that the Commission
take administrative notice of the engineering testimony and exhibits on file
with the Commission for Order Numbers 535-667 covering lands in the vicinity of
the lands that are the subject of this Application. Engineering testimony and
exhibits submitted in support of the application for Order Number 535-667 showed
that the estimated drainage area for analog wells for the Codell Formation
ranges from 94 acres to 286 acres, with an average estimated drainage area of
163 acres per well, and an approximate 1,318.71-acre drilling and spacing unit would accommodate the drilling of an
additional five horizontal wells, for a total of six horizontal wells, for the
Codell Formation. The estimated drainage area for analog wells for the Niobrara
Formation ranges from 29 acres to 130 acres, with an average estimated drainage
area of 69 acres per well, the estimated drainage area calculated using the
Joshi method is 137 acres, and an approximate 1,318.71-acre drilling and spacing unit would accommodate the drilling of seven
horizontal wells for the Niobrara Formation. Order 535-667 provides for
interwell setbacks of 600 feet.
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.
Anadarko agreed to be bound by oral order of the Commission.
14.
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) approve an additional six horizontal wells, for a total of seven
horizontal wells, in an approximate 1,318.71-acre drilling and spacing unit for
Sections 16, 21,
and 28, Township 12 North, Range 64 West, 6th P.M., for the production of oil, gas, and
associated hydrocarbons from the Niobrara Formation; and 2) approve an additional
five horizontal wells, for a total of six horizontal wells, within an approximate
1,318.71-acre drilling and
spacing unit established for Sections 16, 21, and 28, Township 12 North, Range 64 West, 6th
P.M., for the production of oil, gas and associated hydrocarbons from the Codell
Formation.
ORDER
IT IS HEREBY ORDERED:
1.
An additional six horizontal wells, for a
total of seven horizontal wells, in an approximate 1,318.71-acre drilling and spacing unit established for the below–described lands,
are hereby approved, for the production of oil, gas and associated hydrocarbons
from the Niobrara Formation:
Township 12 North, Range 64 West, 6th P.M.
Section 16: Lots 1-4 (lying and being within the State of
Colorado)
Section 21: All
Section 28: All
2.
An
additional five horizontal wells, for a total of six horizontal wells, in an approximate
1,318.71-acre drilling and spacing unit established
for the below-described lands, are hereby approved, for the production of oil,
gas and associated hydrocarbons from the Codell Formation:
Township 12 North, Range 64 West, 6th P.M.
Section 16: Lots 1-4 (lying and being within the State of
Colorado)
Section 21: All
Section 28: All
3.
The
productive interval of the wellbores shall be located no closer than 600 feet
from the unit boundaries and no closer than 150 feet from the productive
interval of any well producing from the Codell or Niobrara Formations, without exception being granted by
the Director.
4.
A
maximum of eight surface locations will be allowed for development of
minerals from all hydrocarbon-bearing formations within the spacing units.
IT IS FURTHER ORDERED:
1.
The
provisions contained in the above order shall become effective immediately.
2.
The
Commission expressly reserves the 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 3rd day of August, 2015, as of July 20, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary