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. 170900553
TYPE: ADDITIONAL WELLS
ORDER NO. 421-91 |
REPORT OF THE COMMISSION
The Commission heard this matter on September 11, 2017, at the Durango Public Library, Program Room #2, 1900 East Third Avenue, Durango, Colorado, 81301, upon application for an order to approve a total of up to 15 horizontal wells within four approximate 1,280-acre drilling and spacing units established for Sections 33 and 4, 34 and 3, 35 and 2, and 36 and 1, Townships 12 and 11 North, Range 63 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Fifth Creek Energy Operating Company, LLC (Operator No. 10629) (“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 Order No. 421-1 which, among other things, established 58 approximate 640-acre drilling and spacing units for certain lands, including Drilling and Spacing Units #1, #2, #3, and #4, for Sections 33 and 4, 34 and 3, 35 and 2, and 36 and 1, Townships 12 and 11 North, Range 63 West, 6th P.M., 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 April 29, 2010, the Commission entered Order No. 421-2 which, among other things, approved up to two horizontal wells to be drilled from a common pad for the established 640-acre drilling and spacing unit for Section 36, Township 12 North, Range 63 West, 6th P.M. for the production of the oil 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.
6. On April 4, 2011, the Commission entered Order No. 421-8 which, among other things, approved up to three horizontal wells to be drilled from a common pad for the established 640-acre drilling and spacing unit for Section 36, Township 12 North, Range 63 West, 6th P.M. for the production of the oil 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, with no inter-well setback required, without exception being granted by the Director.
7. On January 30, 2017, the Commission entered Order No. 421-82 which, among other things, established four approximate 1,280-acre drilling and spacing units for Drilling and Spacing Units #1, #2, #3 and #4 for Sections 33 and 4, 34 and 3, 35 and 2, and 36 and 1, Townships 12 and 11 North, Range 63 West, 6th P.M., providing that the existing 640-acre units for the production of the existing wells shall be maintained only until the date of first completion of the new horizontal well into the unit, and approved up to eight new horizontal wells in each approximate 1,280-acre drilling and spacing unit, providing that the productive interval of each wellbore shall 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, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
8. On July 13, 2017, 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 approve a total of 15 horizontal wells within four approximate 640-acre drilling and spacing units (Drilling and Spacing Units #1, #2, #3, and #4) established by Order No. 421-82 for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of any horizontal well to be no closer than 300 feet from the boundaries of the unit (regardless of the lease lines within the unit), and no closer than 150 feet from the treated interval of another well producing from the same formation, unless the Director grants an exception:
Township 12 North, Range 63 West, 6th P.M.
Section 33: All
Township 11 North, Range 63 West, 6th P.M.
Section 4: All
(“Drilling and Spacing Unit #1”)
Township 12 North, Range 63 West, 6th P.M.
Section 34: All
Township 11 North, Range 63 West, 6th P.M.
Section 3: All
(“Drilling and Spacing Unit #2”)
Township 12 North, Range 63 West, 6th P.M.
Section 35: All
Township 11 North, Range 63 West, 6th P.M.
Section 2: All
(“Drilling and Spacing Unit #3”)
Township 12 North, Range 63 West, 6th P.M.
Section 36: All
Township 11 North, Range 63 West, 6th P.M.
Section 1: All
(“Drilling and Spacing Unit #4”)
9. On August 17, 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.
10. Land Testimony and exhibits submitted in support of the Application by Teale Stone, Senior Landman for Fifth Creek, showed that Fifth Creek holds oil and gas leasehold interests and has a right to drill in the Application Lands.
11. Geoscience testimony and exhibits submitted in support of the Application by Benjamin C. Burke, Geoscience Manager for Fifth Creek, showed the Niobrara Formation is present throughout the Application Lands, is approximately 230 to 260 feet thick, and is generally of uniform thickness throughout the Application Lands. Further testimony showed that the Niobrara Formation is a sequence of chalks, marls and limestones.
12. Engineering testimony and exhibits submitted in support of the Application by William Irwin, Engineering Advisor for Fifth Creek, showed that the drainage area for analog 2-section horizontal Niobrara Formation wells is estimated at 85 acres and the drainage area for analog 1-section horizontal Niobrara Formation wells is estimated at 38 acres, and an approximate 1,280-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by a horizontal well producing oil, gas and associated hydrocarbons from the Niobrara Formation.
13. 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.
14. Fifth Creek agreed to be bound by oral order of the Commission.
15. 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 approve a total of up to 15 horizontal wells within four approximate 1,280-acre drilling and spacing units established by Order No. 421-82 for Sections 33 and 4, 34 and 3, 35 and 2, and 36 and 1, Townships 12 and 11 North, Range 63 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. A total of up to 15 horizontal wells within an approximate 1,280-acre drilling and spacing unit established by Order No. 421-82 for the below-described lands are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of any horizontal well to be no closer than 300 feet from the boundaries of the unit (regardless of the lease lines within the unit), and no closer than 150 feet from the productive interval of another well producing from the same formation, unless the Director grants an exception:
Township 12 North, Range 63 West, 6th P.M.
Section 33: All
Township 11 North, Range 63 West, 6th P.M.
Section 4: All
(“Drilling and Spacing Unit #1”)
2. A total of up to 15 horizontal wells within an approximate 1,280-acre drilling and spacing unit established by Order No. 421-82 for the below-described lands, are hereby approved for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of any horizontal well to be no closer than 300 feet from the boundaries of the unit (regardless of the lease lines within the unit), and no closer than 150 feet from the productive interval of another well producing from the same formation, unless the Director grants an exception:
Township 12 North, Range 63 West, 6th P.M.
Section 34: All
Township 11 North, Range 63 West, 6th P.M.
Section 3: All
(“Drilling and Spacing Unit #2”)
3. A total of up to 15 horizontal wells within an approximate 1,280-acre drilling and spacing unit established by Order No. 421-82 for the below described lands are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of any horizontal well to be no closer than 300 feet from the boundaries of the unit (regardless of the lease lines within the unit), and no closer than 150 feet from the productive interval of another well producing from the same formation, unless the Director grants an exception:
Township 12 North, Range 63 West, 6th P.M.
Section 35: All
Township 11 North, Range 63 West, 6th P.M.
Section 2: All
(“Drilling and Spacing Unit #3”)
4. A total of up to 15 horizontal wells within an approximate 1,280-acre drilling and spacing unit established by Order No. 421-82 for the below described lands are hereby approved for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of any horizontal well to be no closer than 300 feet from the boundaries of the unit (regardless of the lease lines within the unit), and no closer than 150 feet from the productive interval of another well producing from the same formation, unless the Director grants an exception:
Township 12 North, Range 63 West, 6th P.M.
Section 36: All
Township 11 North, Range 63 West, 6th P.M.
Section 1: All
(“Drilling and Spacing Unit #4”)
5. All wells will be drilled from no more than five well pads, including the existing well pads, in each of the four drilling and spacing units to be located within such unit or adjacent thereto, unless an exception is granted by the Director, consistent with Order No. 421-82.
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 22nd day of September 2017, as of September 11, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
James P. Rouse, Acting Secretary