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 |
) ) ) ) ) ) ) |
CAUSE NO. 531
DOCKET NO. 160700280
TYPE: EXCEPTION LOCATION
ORDER NO. 531-35 |
REPORT OF THE COMMISSION
The Commission heard this matter on August 29, 2016, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln St., Suite 801, Denver, Colorado, upon application for an order to modify the setbacks in Order No. 531-18 to provide that the productive intervals of any wellbore shall be no closer than 100 feet from the northern and southern boundaries of the approximate 1280-acre drilling and spacing unit established by Order No. 531-4 for Sections 4 and 5, Township 7 North, Range 80 West, 6th P.M., for the production of 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. Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that, on unspaced lands, 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 July 29, 2013, the Commission entered Order No. 531-4 which, among other things, vacated two approximate 641.34-acre and 626.24-acre drilling and spacing units established by Order No. 531-2 for Sections 4 and 5, Township 7 North, Range 80 West, 6th P.M., established an approximate 1,280-acre drilling and spacing unit for Sections 4 and 5, Township 7 North, Range 80 West, 6th P.M., and approved up to 16 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
6. On May 18, 2015, the Commission entered Order No. 531-18 which, among other things, modified Order No. 531-4 to allow the productive interval of any horizontal well to be no closer than 300 feet from the unit boundary, for the production of the oil, gas, and associated hydrocarbons from the Niobrara Formation, and modified Order No. 531-4 to allow the productive interval of any horizontal well to be no closer than 150 feet from the productive interval of another well producing from the Niobrara Formation, without exception being granted by the Director.
7. On May 19, 2016, SandRidge, by its attorneys, filed with the Commission a verified application (“Application”) for an order to modify the setbacks in Order No. 531-18 to provide that the productive intervals of any wellbore shall be no closer than 100 feet from the northern and southern boundaries of the approximate 1280-acre drilling and spacing unit established by Order No. 531-4 for the below-described lands (“Application Lands”), for the production of 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 4: All
Section 5: All
Applicant is not requesting to modify the boundary setbacks established for the eastern or western boundaries of the drilling and spacing unit.
8. Applicant certified that it has no objection to any request to modify the setbacks to a reciprocal 100 feet as to any lands adjoining the northern or southern boundaries of the approximate 1280-acre existing drilling and spacing unit established by Order No. 531-4.
9. On August 9, 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.
10. Testimony and exhibits submitted in support of the Application by Richard Silman, Landman for Applicant, showed that SandRidge owns substantial leasehold interests in the Application Lands.
11. Testimony and exhibits submitted in support of the Application by Simon Anzaldua, Geologist for Applicant, showed that the Niobrara Formation underlies the entirety of the Application Lands and is a common source of supply. Further testimony showed that the total thickness of the Niobrara Formation underlying the Application Lands ranges from approximately 460 to 510 feet.
12. Engineering testimony and exhibits submitted in support of the Application by Wesley McAlister, Reservoir Engineer in the Rockies Division for Applicant, showed that a setback of 100 feet from the northern and southern unit boundaries will allow production of reserves that otherwise would not be recovered from the Niobrara Formation, thus preventing waste while protecting correlative rights.
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. SandRidge agrees 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 enter an order to modify the setbacks in Order No. 531-18 to provide that the productive intervals of any wellbore shall be no closer than 100 feet from the northern and southern boundaries of the approximate 1280-acre drilling and spacing unit established by Order No. 531-4 for Sections 4 and 5, Township 7 North, Range 80 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. The setbacks are hereby modified such that the productive interval of any permitted well within the approximate 1280-acre existing drilling and spacing unit established by Order No. 531-4 for the below-described lands, shall be no closer than 100 feet from the northern or southern boundaries of the approximate 1280-acre drilling and spacing unit established by Order No. 531-4 for Sections 4 and 5, Township 7 North, Range 80 West, 6th P.M., for the production of the oil, gas, and associated hydrocarbons from the Niobrara Formation, unless an exception is granted by the Director:
Township 7 North, Range 80 West, 6th P.M.
Section 4: All
Section 5: All
IT IS FURTHER ORDERED:
1. The provisions contained in the above order shall become effective immediately.
2. The Commission expressly reserves the 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 19th day of September, 2016, as of August 29, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Julie Murphy, Secretary