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 IN AN UNNAMED FIELD,
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CAUSE NO. 535
ORDER NO. 535-179
CORRECTED |
The
Commission heard this matter on July 9, 2012, in Suite 801, The Chancery
Building, 1120 Lincoln Street, Denver, Colorado, upon application for an
order to establish six approximate
960-acre drilling and spacing units, and authorize up to four horizontal wells
within each unit, for
Sections 5,
6, 7, 8, 19, 20, 29 and 30, Township 10 North, Range 57 West, 6th
P.M. and Sections 1, 12, 19 and 30, Township 10 North, Range 58 West, 6th
P.M.,
for the production of oil, gas and associated hydrocarbons from the Niobrara
Formation.
FINDINGS
The
Commission finds as follows:
1.
Whiting Oil and Gas Corporation (“Whiting” 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. Sections 5, 6, 7, 8, 19, 20, 29 and 30, Township 10 North, Range 57
West, 6th P.M. and Sections 1, 12, 19 and 30, Township 10 North,
Range 58 West, 6th P.M. are subject to Rule 318.a. for the Niobrara
Formation.
5.
On May 10, 2012, Whiting, by its attorneys, filed with the Commission
pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an
order to establish six approximate 960-acre drilling and spacing units for the
below-described lands (“Application Lands”), and authorize up to four horizontal
wells within each unit, for the production of oil, gas and associated
hydrocarbons from the Niobrara Formation, with the treated interval of the
wellbore to be located no closer than 600 feet from the unit boundaries and no
closer than 1200 feet from the treated interval of any other wellbore located in
the unit, without exception being granted by the Director:
Township 10 North, Range 57 West, 6th P.M.
Section 5:
All
Section 8:
N½
Township 10 North, Range 57 West, 6th P.M.
Section 6:
All
Section 7:
N½
Township 10 North, Range 57 West, 6th P.M.
Section 19:
All
Section 30:
N½
Township 10 North, Range 57 West, 6th P.M.
Section 20:
All
Section 29:
N½
Township 10 North, Range 58 West, 6th P.M.
Section 1:
All
Section 12:
N½
Township 10 North, Range 58 West, 6th P.M.
Section 19:
All
Section 30:
N½
6.
On June 28, 2012,
Whiting, 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
Scott McDaniel, Regional Land Manager for Whiting, showed Whiting is the
majority leaseholder in the Application Lands, and that the lands are in the
immediate vicinity of other Niobrara Formation wells that have been drilled,
tested and completed. Testimony concluded that Niobrara type wells demonstrate
the horizontal well development proposed by Whiting will prevent waste and
protect correlative rights.
8.
Geologic testimony and exhibits submitted in support of the Application
by Mark K. Odegard, Staff Geologist for Whiting, included an analysis of a
cross-section from the Niobrara Formation located within the Application Lands,
indicating the Niobrara Formation is present throughout the Application Lands,
and averages 345 feet in thickness.
9.
Engineering testimony and exhibits submitted in support of the
Application by Ralph L. Nelms, Senior Reservoir Engineer for Whiting, showed an
estimated ultimate recovery of 378,000 barrels of oil with a resulting drainage
area of approximately 240-acres per horizontal well. The testimony also showed
the proposed 960-acre drilling and spacing unit is not smaller than the maximum
area that can be efficiently drained by one horizontal Niobrara well and that
the economics for the project are favorable.
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. Whiting
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 establish six approximate
960-acre drilling and spacing units for
Sections 5,
6, 7, 8, 19, 20, 29 and 30, Township 10 North, Range 57 West, 6th
P.M. and Sections 1, 12, 19 and 30, Township 10 North, Range 58 West, 6th
P.M.,
and authorize up to four horizontal wells within each unit, for the production
of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
NOW,
THEREFORE IT IS ORDERED, that
six approximate 960-acre
drilling and spacing units for the below-described lands, are hereby
established, and up to four horizontal wells within each unit, are hereby
approved, for the production of oil, gas and associated hydrocarbons from the
Niobrara Formation, with the treated interval of the wellbore to be located no
closer than 600 feet from the unit boundaries and no closer than 1200 feet from
the treated interval of any other wellbore located in the unit, without
exception being granted by the Director.
Township 10 North, Range 57 West,
6th P.M.
Section 5: All
Section 8: N½
Township 10 North, Range 57 West,
6th P.M.
Section 6: All
Section 7: N½
Township 10 North, Range 57 West,
6th P.M.
Section 19: All
Section 30: N½
Township 10 North, Range 57 West,
6th P.M.
Section 20: All
Section 29: N½
Township 10 North, Range 58 West,
6th P.M.
Section 1: All
Section 12: N½
Township 10 North, Range 58 West,
6th P.M.
Section 19: All
Section 30: N½
IT IS FURTHER ORDERED, that the
provisions contained in the above order shall become effective immediately.
IT IS FURTHER
ORDERED, that the Commission expressly reserves its right, after notice and
hearing, to alter, amend or repeal any and/or all of the above orders.
IT IS FURTHER
ORDERED, that 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.
IT IS FURTHER
ORDERED, that an application for reconsideration by the Commission of this Order
is not required prior to the filing for judicial review.
ENTERED this
11th day of July, 2012,
as of July 9, 2012.
CORRECTED
this 13th
day of December, 2012, as of July 9, 2012
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary