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

REPORT OF THE COMMISSION

The Commission heard this matter on October 1, 2012, at the Routt County Justice Center, 1955 Shield Drive, Steamboat Springs, Colorado, upon application for an order to establish six approximate 960-acre drilling and spacing units for Sections 8, 17, 29 and 32, Township 10 North, Range 57 West, 6^th P.M. and Sections 3, 7 through 10, and 16 through 18, Township 10 North, Range 58 West, 6^th P.M., and approve up to four horizontal wells within each unit, 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 8, 17, 29 and 32, Township 10 North, Range 57 West, 6^th P.M. and Sections 3, 7 through 10, and 16 through 18, Township 10 North, Range 58 West, 6^th P.M., are subject to Rule 318.a. for the Niobrara Formation.

5.         On June 21, 2012 (Amended July 19, 2012), Whiting, by its attorneys, filed with the Commission pursuant to § 34-60-116 C.R.S., a verified amended application (“Amended Application”) for an order to establish six approximate 960-acre drilling and spacing units for the below-described lands (“Application Lands”), and approve 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 1,200 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, 6^th P.M.

Section   8:    S½

Section 17:    All                               (960-acre DSU #1)

Township 10 North, Range 57 West, 6^th P.M.

Section 29:    S½

Section 32:    All                               (960-acre DSU #2)

Township 10 North, Range 58 West, 6^th P.M.

Section 3:      All

Section 10:    N½                              (960-acre DSU #3)

Township 10 North, Range 58 West, 6^th P.M.

Section 7:      S½

Section 18:    All                               (960-acre DSU #4)

Township 10 North, Range 58 West, 6^th P.M.

Section 8:      S½

Section 17:    All                               (960-acre DSU #5)

Township 10 North, Range 58 West, 6^th P.M.

Section 9:      S½

Section 16:    All                               (960-acre DSU #6)

6.         On August 9, 2012, Whiting requested, and Commission Staff granted, a continuance to the October 1, 2012 hearing.

7.         On September 18, 2012, Whiting, by its attorneys, filed with the Commission a written request to approve the Amended Application based on the merits of the verified Application and the supporting exhibits.  Sworn written testimony and exhibits were submitted in support of the Amended Application.

8.         Land testimony and exhibits submitted in support of the Amended Application by Scott McDaniel, Regional Land Manager for Whiting, showed Whiting is a mineral leaseholder for the Application Lands.

9.         Geologic testimony and exhibits submitted in support of the Amended Application by Mark K. Odegard, Staff Geologist for Whiting, showed that the Niobrara Formation has a gross thickness of 320 feet based on logs available from wells adjacent to the Application Lands.  Additional testimony showed that the gross thickness from the top of the Niobrara to the top of the Codell formation ranges from 320 – 365 feet and averages a335 feet across the Application Lands.

10.       Engineering testimony and exhibits submitted in support of the Amended Application by Ralph L. Nelms, Senior Reservoir Engineer for Whiting, showed a summary of Niobrara reservoir characteristics, the values of net pay, porosity, water saturation, recovery factors, and drainage area used for Niobrara volumetric calculations.  The testimony further showed the estimated oil recovery for wells drilled on 960-spacing on the Application lands.  

11.       The above-referenced testimony and exhibits show that granting the Amended Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.

12.       Whiting agreed to be bound by oral order of the Commission. 

13.       Based on the facts stated in the verified Amended Application, having received no protests, and based on the Hearings Officer review of the Amended Application under Rule 511., the Commission should enter an order to establish six approximate 960-acre drilling and spacing units for Sections 8, 17, 29 and 32, Township 10 North, Range 57 West, 6^th P.M. and Sections 3, 7 through 10, and 16 through 18, Township 10 North, Range 58 West, 6^th P.M., and approve 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 1,200 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, 6^th P.M.

Section   8:    S½

Section 17:    All                               (960-acre DSU #1)

Township 10 North, Range 57 West, 6^th P.M.

Section 29:    S½

Section 32:    All                               (960-acre DSU #2)

Township 10 North, Range 58 West, 6^th P.M.

Section 3:      All

Section 10:    N½                              (960-acre DSU #3)

Township 10 North, Range 58 West, 6^th P.M.

Section 7:      S½

Section 18:    All                               (960-acre DSU #4)

Township 10 North, Range 58 West, 6^th P.M.

Section 8:      S½

Section 17:    All                               (960-acre DSU #5)

Township 10 North, Range 58 West, 6^th P.M.

Section 9:      S½

Section 16:    All                               (960-acre DSU #6)

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_____day of October, 2012, as of October 1, 2012.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By____________________________________         

                                                                                    Robert J. Frick, Secretary