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, UNNAMED FIELD, JACKSON COUNTY, COLORADO

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CAUSE NO. 531

 

DOCKET NO. 1407-AW-16

ORDER NO. 531-17

 

REPORT OF THE COMMISSION

 

         The Commission heard this matter on July 28, 2014, at the Weld County Administration Building - Events Center, 1150 “O” Street, Greeley, CO, upon application for an order to approve an additional two horizontal wells, for a total of up to three horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 531-12 for Section 32, Township 8 North, Range 80 West, 6th P.M. for the production of oil, gas, and associated hydrocarbons of the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         EE3, LLC (“EE3” 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 June 17, 2014, the Commission entered Order No. 531-12 which established an approximate 640-acre drilling and spacing unit for Section 32, Township 8 North, Range 80 West, 6th P.M. and approved up to one horizontal well within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; the order also polled all interests within the unit and subjected any non-consenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., for the Grizzly 3-32H Well, for the development and operation of the Niobrara Formation.

 

            5.         On July 15, 2014, EE3, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S. for an order to approve an additional two horizontal wells, for a total of up to three horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 531-12 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 the wellbore to be located no closer than 600 feet from the unit boundaries, and no closer than 300 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:

 

Township 8 North, Range 80 West, 6th P.M.

Section 32:      All

 

Applicant stated that all proposed wells shall be located on no more than one multi-well pad per quarter section within the unit.

 

6.         On July 15, 2014, EE3, 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.         Land testimony and exhibits submitted in support of the Application by Douglas C. Sandridge, Vice President of Land for EE3, showed that both the surface and the mineral interest in the Application Lands are owned in fee. Testimony further showed EE3 owns a substantial leasehold interest in the Application Lands and has the right to drill wells on the Application Lands.

 

8.         Geologic testimony and exhibits submitted in support of the Application by Jeffrey Dynda, Geologist for EE3, showed the Niobrara Formation is present throughout the Application Lands, and is generally of uniform thickness throughout the Application Lands.

 

9.         Engineering testimony and exhibits submitted in support of the Application by Robert E. McClure, the Engineering Manager for EE3, showed that the drainage area for a Niobrara Formation analog well in the Application Lands is 169 aces and the drainage area for a Niobrara Formation horizontal well in the Application Lands varies between 16 and 317 acres. Testimony concluded the drilling, completion, and production of horizontal Niobrara wells requested in the Application for the Application Lands, will increase recovery from the reservoir and thereby prevent waste, will protect correlative rights, and can be done economically and efficiently.

 

10.       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.

 

11.       EE3 agreed to be bound by oral order of the Commission. 

 

12.       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 approve an additional two horizontal wells, for a total of up to three horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 531-12 for Section 32, Township 8 North, Range 80 West, 6th P.M. for the production of oil, gas, and associated hydrocarbons of the Niobrara Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

            1.         An additional two horizontal wells, for a total of up to three horizontal wells within an approximate 640-acre drilling and spacing unit established by Order No. 531-12 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 the wellbore to be located no closer than 600 feet from the unit boundaries, and no closer than 300 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:

 

Township 8 North, Range 80 West, 6th P.M.

Section 32:      All

 

2.         All proposed wells shall be located on no more than one multi-well pad per quarter section within the unit.

 

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   13th  day of August, 2014, as of July 28, 2014.                 

 

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary