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. 160300119

 

TYPE: ADDITIONAL WELLS

 

ORDER NO. 531-25

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on March 7, 2016, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to approve a total of up to nine horizontal wells within an approximate 640-acre drilling and spacing unit established by Order No. 531-2 for Section 8, Township 7 North, Range 80 West, 6th P.M., for the production of the oil, gas, and associated hydrocarbons from the Niobrara Formation. 

 

FINDINGS

 

The Commission finds as follows:

 

1.         SandRidge Exploration & Production LLC, Operator No. 10598 (“SandRidge” 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 July 15, 2008, the Commission entered Order No. 531-2 which, among other things, established 640-acre drilling and spacing units for various lands, including Section 8, Township 7 North, Range 80 West, 6th P.M., and approved one horizontal well, with the option to drill a second horizontal well, within each unit for the production of oil and associated hydrocarbons from the Niobrara Formation.

 

5.         On May 18, 2015, the Commission entered Order No. 531-18 which, among other things, modified Order No. 531-2 to allow the productive interval of any horizontal well to be no closer than 300 feet from the unit boundaries established by the order; modified Order No. 531-2 to allow the productive interval of any horizontal well to be no closer than 150 feet from the productive interval of another horizontal well producing from the Niobrara Formation within the same unit; and approved up to four (4) horizontal wells within each 640-acre drilling and spacing unit established by Order No. 531-2 for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Section 8, Township 7 North, Range 80 West, 6th P.M., is subject to this Order.

 

6.         On January 28, 2016, SandRidge, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified amended application (“Application”) for an order to approve a total of up to nine horizontal wells within an approximate 640-acre drilling and spacing unit established by Order No. 531-2 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 wellbore to be no closer than 300 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:

Township 7 North, Range 80 West, 6th P.M.

Section 8:        All

 

7.         Applicant states that any horizontal wells to be drilled under this Application will be drilled from no more than two multi-well pads, unless the Director grants an exception.

 

8.         On February 12, 2016, SandRidge, 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.         Land testimony and exhibits submitted in support of the Application by Richard Silman, Landman for SandRidge, showed that SandRidge holds oil and gas leasehold interests and has a right to drill in the Application Lands.

 

10.       Geoscience testimony and exhibits submitted in support of the Application by Scott Cherry, Geologist for SandRidge, showed the Niobrara Formation is present throughout the Application Lands, is approximately 470 to 490 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 and is a common source of supply.

 

11.       Engineering testimony and exhibits submitted in support of the Application by Earuch Broacha, Rockies Division Subsurface Manager for SandRidge, showed that the drainage area for analog horizontal Niobrara Formation wells is estimated at 46.02 acres, and an approximate 640-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by nine horizontal wells producing oil, gas and associated hydrocarbons from the Niobrara Formation.

 

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.       SandRidge agreed to be bound by oral order of the Commission. 

 

14.       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 nine horizontal wells within an approximate 640-acre drilling and spacing unit established by Order No. 531-2 for the Section 8, Township 7 North, Range 80 West, 6th P.M., for the production of the oil, gas, and associated hydrocarbons from the Niobrara Formation. 

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         A total of up to nine horizontal wells within an approximate 640-acre drilling and spacing unit established by Order No. 531-2 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 wellbore to be no closer than 300 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, unless the Director grants an exception:

 

Township 7 North, Range 80 West, 6th P.M.

Section 8:        All

 

2.         All wells permitted under this Order shall be drilled from no more than two multi-well pads within the Application Lands, unless the Director grants an exception. 

 

 

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 30 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 March, 2016, effective as of March 7, 2016.

           

OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

By: ____________________________________     

     Julie Murphy, Secretary