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 FOR THE CODELL AND NIOBRARA
FORMATIONS, HEREFORD FIELD, WELD COUNTY, COLORADO
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CAUSE NO. 421
DOCKET NO. 150700340
ORDER NO. 421-70
TYPE: ADDITIONAL
WELLS
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REPORT OF THE COMMISSION
The Commission heard this matter on September 14, 2015, at the Western State Colorado University, University Center,
South Ballroom, 600 North Adams Street, Gunnison, Colorado, upon application for an order to: 1) approve an
additional five horizontal wells, for a total of seven horizontal wells, within
an approximate 1,302.07-acre
drilling and spacing unit established for Sections 14, 23, and 26, Township 12 North, Range 64
West, 6th P.M., for the production of oil, gas and associated
hydrocarbons from the Niobrara Formation; 2) approve an additional two horizontal wells, for a
total of six horizontal wells, within an approximate 1,302.08-acre drilling and
spacing unit established for Sections 14, 23, and 26, 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.
5.
On December 15, 2014
(Amended May 19, 2015), Order No. 421-46 established an approximate
1,302.08-acre drilling and spacing unit for the Application Lands, for the
production of oil, gas and associated hydrocarbons from the Codell Formation,
and approved up to four horizontal wells within the unit.
6.
On December 15, 2014,
Order No. 421-53 established an approximate 1,302.07-acre drilling and spacing
units for the Application Lands, for production of oil, gas and associated
hydrocarbons from the Niobrara Formation, and approved up to two horizontal
wells within the unit.
7.
On April 9, 2015, Anadarko, by its attorneys, filed with the Commission a
verified application (“Application”) for an order to: 1) amend Order No. 421-46
to include Section 14 (Lots 1-4), Township 12 North, Range 64 West, 6th
P.M.; 2) authorize an
additional two horizontal wells, for a total of six horizontal wells, in an
approximate 1,302.08-acre drilling and spacing unit for the below described
lands (“Application Lands”), for the production of oil, gas, and associated
hydrocarbons from the Codell Formation; 3) require the productive interval of
any wellbore drilled for the Codell Formation to be located not less than 300
feet from the unit boundaries, unless such boundary abuts or corners lands for
which the Commission has not at the time of the drilling permit application
granted the right to locate the productive interval of the wellbore no closer
than 300 feet from the unit boundary, and not less than 150 feet from the
treated interval of any well from the Codell Formation, without exception being
granted by the Director; 4) authorize an additional five horizontal wells, for
a total of seven horizontal wells, in an approximate 1,302.07-acre drilling and
spacing unit for the Application lands, for the production oil, gas, and
associated hydrocarbons from the Niobrara Formation, and 5) 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 Formation, without exception being granted by the
Director:
Township 12 North, Range 64 West, 6th P.M.
Section 14: Lots 1-4 (lying and being within the State of
Colorado)
Section 23: All
Section 26: All
8.
On June 4,
2015, Anadarko agreed to withdraw its request to amend Order No. 421-46 to
include Section 14 (Lots 1-4), Township 12 North, Range 64 West, 6th
P.M.
9.
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.
10.
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.
11.
On July 6, 2015,
Extraction Oil & Gas, LLC filed a Protest of Application. On August 6,
2015, Extraction Oil & Gas, LLC withdrew its Protest of Application.
12.
On September 2, 2015,
Anadarko, by its attorneys, and the Bureau of Land Management (BLM) agreed that
the Application Lands contain federal minerals. As such, Anadarko agreed to
submit a Communitization Agreement to the BLM for any existing wells within 60
days of the entry of an order. Anadarko also agreed to submit a
Communitization Agreement to the BLM at least 90 days before the anticipated
date of first production (as defined in the Commission’s Rules) from the
initial well drilled within the drilling and spacing unit for the Application
Lands.
13.
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.
14.
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 Numbers 535-667 covering lands
adjacent to 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 17 to 19
feet thick, and the Niobrara Formation ranges from 136 to 137 feet thick.
15.
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 adjacent to 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 1,302-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 1,302-acre drilling and spacing unit would accommodate the drilling of seven
horizontal wells for the Niobrara Formation.
16.
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.
17.
Anadarko agreed to be bound by oral order of the Commission.
18.
Based on the
facts stated in the verified Application, the protest having been resolved, and
based on the Hearing Officer review of the Application under Rule 511., the
Commission should enter an order to: 1) approve an additional five horizontal
wells, for a total of seven horizontal wells, within an approximate 1,302.07-acre drilling and spacing unit
established for
Sections 14, 23, and 26, 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
two horizontal wells, for a total of six horizontal wells, in an approximate
1,302.08-acre drilling and spacing unit established for Sections 14, 23, and 26,
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 five horizontal wells, for a total of seven horizontal wells, in an
approximate 1302.07-acre drilling and spacing unit 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 14: Lots 1-4 (lying and being within the State of
Colorado)
Section 23: All
Section 26: All
2.
The
productive interval of any well drilled for the Niobrara Formation shall be located
not less than 600 feet from the unit boundaries, and not less than 150 feet from the treated interval of any well drilled in
the Niobrara Formation, unless an exception is granted by the Director.
3.
An additional two horizontal wells, for a
total of six horizontal wells, in an approximate 1,302.08-acre drilling and
spacing unit 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 14: Lots 1-4 (lying and being within the State of
Colorado)
Section 23: All
Section 26: All
4.
The productive interval of any
wellbore drilled for the Codell Formation shall be located not less than 300
feet from the unit boundaries, unless such boundary abuts or corners lands for
which the Commission has not at the time of the drilling permit application
granted the right to locate the productive interval of the wellbore no closer
than 300 feet from the unit boundary, and not less than 150 feet from the
treated interval of any well from the Codell Formation, unless an exception is granted
by the Director.
5.
A
maximum of eight surface locations will be allowed for development of
minerals from all hydrocarbon-bearing formations within the spacing unit.
6.
Anadarko shall submit
a Communitization Agreement to the BLM for any existing wells within 60 days of
the entry of this Order. Anadarko shall submit a Communitization Agreement to
the BLM at least 90 days before the anticipated date of first production (as
defined in the Commission’s Rules) from the initial well drilled within the
drilling and spacing units for the above described lands.
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 21st day of September, 2015, as of September 14, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary