BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF CONOCOPHILLIPS COMPANY FOR AN ORDER TO
ESTABLISH TWO APPROXIMATE 640-ACRE DRILLING AND SPACING UNITS AND APPROVE UP TO
TWO HORIZONTAL WELLS WITHIN EACH UNIT FOR SECTIONS 18 AND 32, TOWNSHIP 4 SOUTH,
RANGE 63 WEST, 6TH P.M. FOR THE NIOBRARA FORMATION, UNNAMED FIELD,
ARAPAHOE COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1301-SP-09
ORDER NO. 535-247
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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 two
approximate 640-acre drilling and spacing units for Sections 18 and 32, Township
4 South, Range 63 West, 6th P.M., and approve up to two 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.
ConocoPhillips
Company ("ConocoPhillips" or “Applicant”), 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 18 and 32,
Township 4 South, Range 63 West, 6th
P.M. are subject to this Rule for the Niobrara Formation.
5.
On November 2,
2012, ConocoPhillips Company ("ConocoPhillips" or “Applicant”), by its
attorneys, filed with the Commission pursuant to § 34-60-116 C.R.S., a verified
application (“Application”) for an order to establish two approximate 640-acre
drilling and spacing units for the below-described lands (“Application Lands”),
and approve up to two 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 460 feet from the
unit boundaries and no closer than 920 feet from the treated interval of any
other wellbore located in the unit, without exception being granted by the
Director:
Township 4 South, Range 63 West, 6th P.M.
Section 18
All
(DSU #1)
Section 32:
All
(DSU #2)
6.
On December 19,
2012, ConocoPhillips, by its
attorneys, filed with the Commission a written request to approve the
Application based on its 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 Carson Buckles, Landman for
ConocoPhillips, showed that ConocoPhillips holds a mineral leasehold interest in
the Application Lands.
8.
Geologic testimony
and exhibits submitted in support of the Application by Dennis P. Holler, Senior
Geological Associate for MHA Petroleum Consultants for ConocoPhillips, showed
that the Niobrara Formation exists under all of the Application Lands.
Additional testimony showed that the total thickness of the Niobrara Formation
under the Application Lands is 300 feet thick.
9.
Engineering
testimony and exhibits submitted in support of the Application by John Seidle,
Vice-President of MHA Petroleum Consultants, LLC for ConocoPhillips,
showed the estimated ultimate recovery from horizontal wells
in the Niobrara Formation within the Application Lands is 271 MBO. Additional testimony showed that the
calculated drainage area is expected to be 261-acres, with a recovery factor of
5%. Testimony concluded the
economics of the project are sound.
10.
The
above-referenced testimony and exhibits show that the granting of the
Application will allow more efficient reservoir drainage, and will prevent
waste, will assure a greater ultimate recovery of hydrocarbons and will not
violate correlative rights.
11.
ConocoPhillips has agreed to be bound by the oral order of the
Commission.
12.
Based on the facts stated in the Application, having received no
protests, and based on the Hearing Officer review under Rule 511, the Commission
should enter an order to establish two approximate 640-acre drilling and spacing
units for Sections 18 and 32, Township 4 South, Range 63 West, 6th
P.M., and approve up to two 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 two approximate 640-acre drilling and
spacing units for the below-described lands, are hereby established, and up to
two horizontal wells within each unit, are hereby approved,
for the production of oil, gas and
associated hydrocarbons from the Niobrara Formation,
with the bottomhole locations not less than 600
feet from the boundary of the proposed drilling unit and not less than 460 feet
from any other well or treated interval of a well producing from the Niobrara
Formation, without exception being granted by the Director:
Township 4 South,
Range 63 West, 6th P.M.
Section 18
All
(DSU #1, 640-acre)
Section 32:
All
(DSU #2, 640-acre)
IT IS FURTHER ORDERED, 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 thirty (30) days after the date of 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