BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

IN THE MATTER OF THE APPLICATION OF EE3, LLC, FOR AN ORDER TO APPROVE ONE ADDITIONAL HORIZONTAL WELL IN A 628-ACRE DRILLING AND SPACING UNIT LOCATED IN THE SECTION 7, TOWNSHIP 7 NORTH, RANGE 80 WEST, 6TH P.M. FOR THE NIOBRARA FORMATION, UNNAMED FIELD, JACKSON COUNTY, COLORADO

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CAUSE NO. 531

 

DOCKET NO. 1309-AW-50

 

ORDER NO. 531-6

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on October 28, 2013, at the Limon Community Center, 477 D Avenue, Limon, Colorado, upon application for an order to approve one additional horizontal well, for a total of three horizontal wells, within an approximate 628-acre drilling and spacing unit established for Section 7, 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.         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 July 15, 2008, the Commission entered Order No. 531-2 which, among other things, established various drilling and spacing units and approved one horizontal well within each unit, with the option to drill a second horizontal well in each of the drilling and spacing units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Section 7, Township 7 North, Range 80 West, 6th P.M., is subject to Order No. 531-2 for the Niobrara Formation.

 

5.         On July 9, 2012, the Commission entered Order No. 531-3 which, among other things, pooled all interests in an approximate 628-acre drilling and spacing unit established for the development and operation of the Niobrara Formation.  Section 7, Township 7 North, Range 80 West, 6th P.M., is subject to Order No. 531-3 for the Niobrara Formation.

           

6.         On July 18, 2013, EE3, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an order to approve one additional horizontal well, for a total of three horizontal wells, within an approximate 628-acre drilling and spacing unit established for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the horizontal wellbore to be no closer than 600 feet from the unit boundaries, and no closer than 600 feet from the treated 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 7:        All

 

7.         On September 3, 2013, EE3 requested, and Commission staff granted, a continuance to the October 28, 2013 hearing.

 

8.         On October 15, 2013, 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.         Land testimony and exhibits submitted in support of the Application by Douglas Sandridge, Vice President of Land for EE3, showed the minerals are partially held in fee and EE3 owns a leasehold interest covering 100% of the Application Lands.

 

10.       Geologic testimony and exhibits submitted in support of the Application by Jeffrey Dynda, Geologist for EE3, included micro-seismic and seismic data showing the Niobrara and Frontier Formations are uniform and contiguous throughout the Application Lands and that the proposed unit configuration supported a wellbore orientation that would maximize stimulation of the reservoir.

 

11.       Engineering testimony and exhibits submitted in support of the Application by Richard McClure, President of EE3, showed the calculated drainage area for an analogous horizontal well to be 159-acres (Exhibit E-2).  Testimony concluded the well would be economic with an estimated ultimate recovery (“EUR”) of 126 MBOE of oil and 139 MMCF of gas.

 

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 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 enter an order to approve one additional horizontal well, for a total of three horizontal wells, within an approximate 628-acre drilling and spacing unit established for Section 7, 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.         One additional horizontal well, for a total of three horizontal wells, within an approximate 628-acre drilling and spacing unit established for the below-described lands, is hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the horizontal wellbore to be no closer than 600 feet from the unit boundaries, and no closer than 600 feet from the treated 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 7:        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 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   8th   day of November, 2013, as of October 28, 2013.

           

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary