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, UNNAMED FIELD, JACKSON COUNTY, COLORADO
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CAUSE NO. 531
DOCKET NO. 150400236
ORDER NO. 531-19 |
REPORT OF THE COMMISSION
The Commission heard this matter on May 18, 2015, at the Aims Community College, Fort Lupton Campus, 260 College Avenue, Fort Lupton, Colorado, 80621, upon application for allow 300 foot setbacks to the exterior unit boundaries of the Peterson Ridge Federal Exploratory Unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. EE3 LLC (Operator No. 10450) (“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. Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that 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 February 12, 2015 (Amended April 10, 2015), EE3 filed a verified application pursuant to §34-60-116, C.R.S., for an order to allow 300 foot setbacks as to the exterior unit boundaries of the Peterson Ridge Federal Exploratory Unit, composed of the below-described lands (“Application Lands”), for the production of the oil, gas, and associated hydrocarbons from the Niobrara Formation:
Township 7 North, Range 80 West, 6th P.M.
Section 1: W˝
Section 2: All
Section 3: All
Township 8 North, Range 80 West, 6th P.M.
Section 1: All
Section 2: All
Section 3: All
Section 4: All
Section 5: All
Section 7: All
Section 8: All
Section 9: All
Section 10: All
Section 11: All
Section 12: All
Section 13: All
Section 14: All
Section 15: All
Section 16: All
Section 17: All
Section 18: All
Section 19: All
Section 20: All
Section 21: All
Section 22: All
Section 23: All
Section 24: All
Section 25: All
Section 26: All
Section 27: All
Section 28: All
Section 29: All
Section 30: All
Section 33: All
Section 34: All
Section 35: All
Section 36: All
Township 8 North, Range 81 West, 6th P.M.
Section 13: All
Section 24: All
Section 25: All
6. On March 20, 2015, the Commission received a protest of the Application from Max R. and Jean E. Maxwell (“Maxwells”).
7. On March 30, 2015, a prehearing conference was held at which time, the Maxwells indicated that they owned no interest in, contiguous to, or cornering the Application Lands. The Hearing Officer determined they had no standing to protest the Application. The Maxwells’ protest was converted to a Rule 510 statement.
8. On April 27, 2015, 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.
9. Testimony and exhibits submitted in support of the Application by Douglas C. Sandridge, Vice President of Land for EE3, showed that EE3 owns 90% or more of the working interest in each of the existing and proposed drilling and spacing units within the Application Lands.
10. Testimony and exhibits submitted in support of the Application by Jeffrey Dynda, Geologist for EE3, showed that the Niobrara Formation underlies the entirety of the Application Lands and is approximately 435 feet thick.
11. Testimony and exhibits submitted in support of the Application by Richard F. McClure, President for EE3, showed that horizontal development is the most efficient and economic way to develop the Application Lands. Further engineering testimony showed that each horizontal well drilled in the Niobrara Formation of the Application Lands is expected to have a drainage radius of less than 300 feet, and that therefore, the treated interval of each well should be no less than 300 feet from the boundaries of the federal unit.
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. EE3 agrees to be bound by oral order of the Commission.
14. Based on the facts stated in the verified Application, all protests having been resolved, and based on the Hearing Officer review of the Application under Rule 511., the Commission should enter an order to allow 300 foot setbacks to the exterior unit boundaries of the Peterson Ridge Federal Exploratory Unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. The productive interval of any horizontal well within the below-described lands shall be no closer than 300 feet from the boundaries of the exterior unit boundaries of the Peterson Ridge Federal Exploratory Unit, for the production of the oil, gas, and associated hydrocarbons from the Niobrara Formation, without exception being granted by the Director:
Township 7 North, Range 80 West, 6th P.M.
Section 1: W˝
Section 2: All
Section 3: All
Township 8 North, Range 80 West, 6th P.M.
Section 1: All
Section 2: All
Section 3: All
Section 4: All
Section 5: All
Section 7: All
Section 8: All
Section 9: All
Section 10: All
Section 11: All
Section 12: All
Section 13: All
Section 14: All
Section 15: All
Section 16: All
Section 17: All
Section 18: All
Section 19: All
Section 20: All
Section 21: All
Section 22: All
Section 23: All
Section 24: All
Section 25: All
Section 26: All
Section 27: All
Section 28: All
Section 29: All
Section 30: All
Section 33: All
Section 34: All
Section 35: All
Section 36: All
Township 8 North, Range 81 West, 6th P.M.
Section 13: All
Section 24: All
Section 25: All
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 1st day of June, 2015, as of May 18, 2015.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By____________________________________
Julie Murphy, Secretary