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 NIOBRARA FORMATION, HEREFORD FIELD, WELD COUNTY, COLORADO |
) ) ) ) ) ) )
|
CAUSE NO. 421
DOCKET NO. 170100077
TYPE: SPACING
ORDER NO. 421-86 |
REPORT OF THE COMMISSION
The Commission heard this matter on January 30, 2017, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to: 1) maintain 10 approximate 640-acre drilling and spacing units established by Order No. 421-1 for Sections 20, 21, 22, 23, 24, 25, 26, 27, 28, and 29, Township 11 North, Range 63 West, 6th P.M.; 2) maintain the one approximate 640-acre drilling and spacing unit established by Order No. 421-3 for Section 19, Township 11 North, Range 63 West, 6th P.M.; 3) maintain the one approximate 1,280-acre drilling and spacing unit established by Order No. 421-43 for Section 30 and 31 of Township 11 North, 63 West, 6th P.M.; 4) establish six approximate 1,280-acre drilling and spacing units for Sections 19 and 30, 20 and 29, 21 and 28, 22 and 27, 23 and 26, and 24 and 25, Township 11 North, Range 63 West, 6th P.M.; and 5) approve up to eight new horizontal wells within each proposed unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Fifth Creek Energy Operating Company, LLC (“Fifth Creek” 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 (Corrected January 19, 2012), the Commission entered into Order No. 421-1 which, among other things, established 58 approximate 640-acre drilling and spacing units for certain lands in the Application Lands, and approved one horizontal well within each unit, for the development and operation of 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.
5. On October 21, 2010, the Commission entered into Order No. 421-3 which, among other things, established 83 approximate 640-acre drilling and spacing units for certain lands, including DSU #1 on the Application Lands, and approved one horizontal well within each unit, for the development and operation of 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.
6. On February 11, 2013, the Commission entered into Order No. 421-43 which, among other things, vacated two approximate 640-acre drilling and spacing units established by Order No. 421-3, and created an approximate 1,280-acre drilling and spacing units for certain lands, including Section 30, Township 11 North, Range 63 West, 6th P.M. in DSU #1, on the Application Lands, and approved the drilling of up to 10 wells within each unit, for the development and operation of the Niobrara Formation, with the productive interval of the wellbore to be located no closer than 600 feet from the unit boundaries, and no closer than 460 feet from any other well or treated interval of a well producing from the Niobrara Formation, without exception being granted by the Director.
7. On December 1, 2016, Fifth Creek, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to: 1) modify 10 approximate 640-acre drilling and spacing units established by Order No. 421-1 for Sections 20, 21, 22, 23, 24, 25, 26, 27, 28, and 29, Township 11 North, Range 63 West, 6th P.M.; 2) modify the approximate 640-acre drilling and spacing unit established by Order No. 421-3 for Section 19, Township 11 North, Range 63 West, 6th P.M.; 3) modify the one approximate 1,280-acre drilling and spacing unit established by Order No. 421-43 for Section 30 and 31 of Township 11 North, 63 West, 6th P.M.; 4) establish six approximate 1,280-acre drilling and spacing units for Sections 19 and 30, 20 and 29, 21 and 28, 22 and 27, 23 and 26, and 24 and 25, Township 11 North, Range 63 West, 6th P.M., and 5) approve up to eight new horizontal wells in each proposed approximate 1,280-acre drilling and spacing unit, and with 300-foot setbacks for the boundaries of the drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of each wellbore to be no closer than 150 feet from the productive interval of any other wellbore located within the unit, unless the Director grants an exception:
Township 11 North, Range 63 West, 6th P.M.
Section 19: All
Section 30: All
(“DSU #1”)
Township 11 North, Range 63 West, 6th P.M.
Section 20: All
Section 29: All
(“DSU #2”)
Township 11 North, Range 63 West, 6th P.M.
Section 21: All
Section 28: All
(“DSU #3”)
Township 11 North, Range 63 West, 6th P.M.
Section 22: All
Section 27: All
(“DSU #4”)
Township 11 North, Range 63 West, 6th P.M.
Section 23: All
Section 26: All
(“DSU #5”)
Township 11 North, Range 63 West, 6th P.M.
Section 24: All
Section 25: All
(“DSU #6”)
8. Applicant respectfully requests that the approximate 1,280-acre exploratory drilling and spacing unit established by Order No. 421-43 be vacated in its entirety.
9. The records of the Commission reflect that one horizontal well, is currently producing from the Niobrara Formation in DSU #1 on the Application Lands, the Critter Creek 15-19H (API No. 05-123-32665), operated by Applicant. Applicant respectfully requests that the approximate 640-acre drilling and spacing unit established by Order No. 421-3 be maintained for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit, at which time production from the Critter Creek 15-19H well (API No. 05-123-3265) shall be allocated to the proposed DSU #1.
10. The records of the Commission reflect that two horizontal wells are currently producing from the Niobrara Formation in DSU #2 on the Application Lands, the Critter Creek 16-20H (API No. 05-123-31431) and the Critter Creek 23-19H (API No. 05-123-32679), operated by Applicant. Applicant respectfully requests that the approximate 640-acre drilling and spacing units established by Order No. 421-1 be maintained for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit, at which time production from the Critter Creek 16-20H (API No. 05-123-31431) and the Critter Creek 23-19H (API No. 05-123-32679) wells shall be allocated to the proposed DSU #2.
11. The records of the Commission reflect that two horizontal wells are currently producing from the Niobrara Formation in DSU #3 on the Application Lands, the Critter Creek 17-21H (API No. 05-123-31505) and the Holstein 11-28H (API No. 05-123-30920), operated by Applicant. Applicant respectfully requests that the approximate 640-acre drilling and spacing units established by Order No. 421-1 be maintained for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit, at which time production from the Critter Creek 17-21H (API No. 05-123-31505) and the Holstein 11-28H (API No. 05-123-30920) wells shall be allocated to the proposed DSU #3.
12. The records of the Commission reflect that two horizontal wells are currently producing from the Niobrara Formation in DSU #4 on the Application Lands, the Critter Creek 18-22H (API No. 05-123-31738) and the Critter Creek 22-27H (API No. 05-123-31507), operated by Applicant. Applicant respectfully requests that the approximate 640-acre drilling and spacing units established by Order No. 421-1 be maintained for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit, at which time production from the Critter Creek 18-22H (API No. 05-123-31738) and the Critter Creek 22-27H (API No. 05-123-31507) wells shall be allocated to the proposed DSU #4.
13. The records of the Commission reflect that two horizontal wells are currently producing from the Niobrara Formation in DSU #5 on the Application Lands, the Critter Creek 19-23H (API No. 05-123-31477) and the Critter Creek 21-26H (API No. 05-123-31796), operated by Applicant. Applicant respectfully requests that the approximate 640-acre drilling and spacing unit established by Order No. 421-1 be maintained for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit, at which time production from the Critter Creek 19-23H (API No. 05-123-31477) and the Critter Creek 21-26H (API No. 05-123-31796), wells shall be allocated to the proposed DSU #5.
14. The records of the Commission reflect that two horizontal wells are currently producing from the Niobrara Formation in DSU #6 on the Application Lands, the Critter Creek 20-24H (API No. 05-123-31939) and the Jersey 12-25H (API No. 05-123-30994), operated by Applicant. Applicant respectfully requests that the approximate 640-acre drilling and spacing unit established by Order No. 421-1 be maintained for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit, at which time production from the Critter Creek 20-24H (API No. 05-123-31939) and the Jersey 12-25H (API No. 05-123-30994) wells shall be allocated to the proposed DSU #6.
15. On January 9, 2017, Fifth Creek, 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.
16. Land testimony and exhibits submitted in support of the Application by Tricia Di Grappa, Land Manager for Fifth Creek, showed that both the mineral and surface interests in the Application Lands are owned in fee, and that Fifth Creek owns a partial undivided leasehold ownership interest in the Application Lands.
17. Geoscience testimony and exhibits submitted in support of the Application by Benjamin Burke, Geologist for Fifth Creek, showed the Niobrara Formation is present throughout the Application Lands and ranges from approximately 240 to 260 feet thick.
18. Engineering testimony and exhibits submitted in support of the Application by Salina Derichsweiler, Senior Reservoir Engineer for Fifth Creek, demonstrated that the estimated recovery factor for the Niobrara Formation is predicted at 434,000 barrels of oil per horizontal well with a drainage area of 121 acres for 300 foot setbacks, and that 300’ setbacks in the six approximate 1,280-acre drilling and spacing units, with the requested number of wells, will promote efficient drainage, protect correlative rights, and prevent waste.
19. Applicant stated that the wells will be drilled from no more than five well pads in each of the proposed in each of the six drilling and spacing units to be located within such unit or adjacent thereto, unless an exception is granted by the Director.
20. 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.
21. Fifth Creek agreed to be bound by oral order of the Commission.
22. 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) maintain 10 approximate 640-acre drilling and spacing units established by Order No. 421-1 for Sections 20, 21, 22, 23, 24, 25, 26, 27, 28, and 29, Township 11 North, Range 63 West, 6th P.M.; 2) maintain the one approximate 640-acre drilling and spacing unit established by Order No. 421-3 for Section 19, Township 11 North, Range 63 West, 6th P.M.; 3) maintain the one approximate 1,280-acre drilling and spacing unit established by Order No. 421-43 for Section 30 and 31 of Township 11 North, 63 West, 6th P.M.; 4) establish six approximate 1,280-acre drilling and spacing units for Sections 19 and 30, 20 and 29, 21 and 28, 22 and 27, 23 and 26, and 24 and 25, Township 11 North, Range 63 West, 6th P.M.; and 5) approve up to eight new horizontal wells within each proposed unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. One approximate 1,280-acre exploratory drilling and spacing unit established by Order No. 421-43 for Sections 30 and 31, Township 11 North, Range 63 West, 6th P.M. is hereby vacated, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
2. An approximate 1,280-acre drilling and spacing unit for the below-described lands is hereby established, and up to eight new horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 11 North, Range 63 West, 6th P.M.
Section 19: All
Section 30: All
(“DSU #1”)
3. The productive interval of the wellbore will be located no closer than 300 feet from the boundaries of the unit and no closer than 150 feet from the productive interval of another well producing from the same source of supply within the unit, unless an exception is granted by the Director.
4. One approximate 640-acre drilling and spacing unit established by Order No. 421-3 for Section 19, Township 11 North, Range 63 West, 6th P.M. is hereby maintained, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit at which time production from the Critter Creek 15-19H Well (API No. 05-123-32665) shall be allocated to the proposed DSU #1.
5. An approximate 1,280-acre drilling and spacing unit for the below-described lands is hereby established, and up to eight new horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 11 North, Range 63 West, 6th P.M.
Section 20: All
Section 29: All
(“DSU #2”)
6. The productive interval of the wellbore will be located no closer than 300 feet from the boundaries of the unit and no closer than 150 feet from the productive interval of another well producing from the same source of supply within the unit, unless an exception is granted by the Director.
7. Two approximate 640-acre drilling and spacing unit established by Order No. 421-1 for Sections 20 and 29, Township 11 North, Range 63 West, 6th P.M. are hereby maintained, for the existing production of oil, gas and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit at which time production from the Critter Creek 16-20H Well (API No. 05-123-31431) and Critter Creek 23-19H Well (API No. 05-123-32679) shall be allocated to the proposed DSU #2.
8. An approximate 1,280-acre drilling and spacing unit for the below-described lands is hereby established, and up to eight new horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 11 North, Range 63 West, 6th P.M.
Section 21: All
Section 28: All
(“DSU #3”)
9. The productive interval of the wellbore will be located no closer than 300 feet from the boundaries of the unit and no closer than 150 feet from the productive interval of another well producing from the same source of supply within the unit, unless an exception is granted by the Director.
10. Two approximate 640-acre drilling and spacing unit established by Order No. 421-1 for Sections 21 and 28, Township 11 North, Range 63 West, 6th P.M. are hereby maintained, for the existing production of oil, gas and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit at which time production from the Critter Creek 17-21H Well (API No. 05-123-31505) and the Holstein 11-28H Well (API No. 05-123-30920) shall be allocated to the proposed DSU #3.
11. An approximate 1,280-acre drilling and spacing unit for the below-described lands is hereby established, and up to eight new horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 11 North, Range 63 West, 6th P.M.
Section 22: All
Section 27: All
(“DSU #4”)
12. The productive interval of the wellbore will be located no closer than 300 feet from the boundaries of the unit and no closer than 150 feet from the productive interval of another well producing from the same source of supply within the unit, unless an exception is granted by the Director.
13. Two approximate 640-acre drilling and spacing units established by Order No. 421-1 for Sections 22 and 27, Township 11 North, Range 63 West, 6th P.M. are hereby maintained, for the existing production of oil, gas and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit at which time production from the Critter Creek 18-22H Well (API No. 05-123-31738) and the Critter Creek 22-27H Well (API No. 05-123-31507) shall be allocated to the proposed DSU #4.
14. An approximate 1,280-acre drilling and spacing unit for the below-described lands is hereby established, and up to eight new horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 11 North, Range 63 West, 6th P.M.
Section 23: All
Section 26: All
(“DSU #5”)
15. The productive interval of the wellbore will be located no closer than 300 feet from the boundaries of the unit and no closer than 150 feet from the productive interval of another well producing from the same source of supply within the unit, unless an exception is granted by the Director.
16. Two approximate 640-acre drilling and spacing units established by Order No. 421-1 for Sections 23 and 26, Township 11 North, Range 63 West, 6th P.M. are hereby maintained, for the existing production of oil, gas and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit at which time production from the Critter Creek 19-23H Well (API No. 05-123-31477) and the Critter Creek 21-26H Well (API No. 05-123-31796) shall be allocated to the proposed DSU #5.
17. An approximate 1,280-acre drilling and spacing unit for the below-described lands is hereby established, and up to eight new horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 11 North, Range 63 West, 6th P.M.
Section 24: All
Section 25: All
(“DSU #6”)
18. The productive interval of the wellbore will be located no closer than 300 feet from the boundaries of the unit and no closer than 150 feet from the productive interval of another well producing from the same source of supply within the unit, unless an exception is granted by the Director.
19. Two approximate 640-acre drilling and spacing units established by Order No. 421-1 for Sections 24 and 25, Township 11 North, Range 63 West, 6th P.M. are hereby maintained, for the existing production of oil, gas and associated hydrocarbons from the Niobrara Formation only until the date of first completion of the new horizontal well into the unit at which time production from the Critter Creek 20-24H Well (API No. 05-123-31939) and the Jersey 12-25H Well (API No. 05-123-30994) shall be allocated to the proposed DSU #6.
20. All new permitted wells shall be located on no more than five total wellpads, including existing wellpads, within each of the five appropriate drilling and spacing units, unless an exception is granted by the Director.
21. Section 31, Township 11 North, Range 63 West, 6th P.M. shall be deemed unspaced lands, and shall revert to Rule 318.a.
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 14th day of February, 2017, as of January 30, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Julie Murphy, Secretary