BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF CONDOR ENERGY TECHNOLOGY LLC FOR AN ORDER TO
ESTABLISH AN APPROXIMATE 1280-ACRE EXPLORATORY DRILLING AND SPACING UNIT, AND
APPROVE UP TO EIGHT HORIZONTAL WELLS WITHIN THE UNIT, LOCATED IN SECTIONS 16 AND
17, TOWNSHIP 7 NORTH, RANGE 59 WEST, 6TH P.M., FOR THE NIOBRARA
FORMATION, UNNAMED FIELD, WELD COUNTY, COLORADO |
)
)
)
)
)
)
)
)
) |
CAUSE NO. 535
DOCKET NO. 1301-SP-02
ORDER NO.535-243 |
REPORT OF THE COMMISSION
The Commission heard this matter on January 7, 2013, at the
Sheraton Denver Downtown Hotel, 1550 Court Place, Denver,
Colorado, upon application for an order to establish an approximate
1280-acre exploratory drilling and spacing unit for Sections 16 and 17, Township
7 North, Range 59 West, 6th P.M., and approve up to eight horizontal
wells within the unit, for the production of oil, gas and associated
hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1.
Condor Energy Technology, LLC (“Condor” 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 16 and 17, Township 7 North, Range 59 West, 6th P.M. are
subject to Rule 318.a. for the Niobrara Formation.
5.
On October 31, 2012, Condor, by its attorneys, filed with the Commission
pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an
order to establish an approximate 1280-acre exploratory drilling and spacing
unit for the below-described lands (“Application Lands”), and approve up to
eight horizontal wells within the 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 150 feet from the treated interval of any other wellbore
located in the unit, without exception being granted by the Director:
Township 7 North, Range 59 West, 6th
P.M.
Section 16: All
Section 17:
All
6.
On December 19, 2012, Condor, 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
Sean Fitzgerald, Engineering and Land Manager of South Texas Reservoir Alliance
LLC for Condor, showed the surface of the Application Lands is owned in fee, the
mineral ownership of the Application Lands is held in fee, and that Condor owns
a partial leasehold ownership interest in the Application Lands.
8.
Geologic testimony and exhibits submitted in support of the Application
by Cynthia L. Welch, Geoscience Manager of South Texas Reservoir Alliance LLC
for Condor, showed the Niobrara Formation is present throughout the Application
Lands, is approximately 240 to 265 feet thick, and is generally of uniform
thickness throughout the Application Lands.
9.
Engineering testimony and exhibits submitted in support of the
Application by Sean Fitzgerald, Engineering and Land Manager of South Texas
Reservoir Alliance LLC for Condor, showed nearby horizontal Niobrara type wells
on 640-acre units drained an average of 153-acres. Testimony showed the use of long
horizontal wells in a 1280-acre unit will increase the recovery of hydrocarbons
from the reservoir. Testimony
further showed an estimated ultimate recovery (“EUR”) of 280 MBBL of oil and 420
MMCF of gas at a 5% recovery factor, showing the economics of the project are
sound.
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.
Condor 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 Hearings Officer review of the Application under Rule
511., the Commission should enter an order to establish an approximate 1280-acre
exploratory drilling and spacing unit for Sections 16 and 17, Township 7 North,
Range 59 West, 6th P.M., and approve up to eight horizontal wells
within the unit, for the production of oil, gas and associated hydrocarbons from
the Niobrara Formation.
ORDER
NOW, THEREFORE IT IS ORDERED, that an approximate 1280-acre exploratory drilling
and spacing unit for the below-described lands, is hereby established, and up to
eight horizontal wells within the 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 150 feet from the treated interval of any
other wellbore located in the unit, without exception being granted by the
Director:
Township 7 North, Range 59 West, 6th
P.M.
Section 16: All
Section 17:
All
IT IS FURTHER ORDERED, that up to
four well pads within the unit, are hereby approved, with no more than one
wellpad located within each quarter quarter section, without exception being
granted by the Director.
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 January, 2013, as of January 7, 2013.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary