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 1280-ACRE DRILLING AND SPACING UNITS AND APPROVE UP TO
TWO HORIZONTAL WELLS WITHIN EACH UNIT FOR SECTIONS 11, 12, 13 AND 14, TOWNSHIP 5
SOUTH, RANGE 64 WEST, 6TH P.M., FOR THE NIOBRARA FORMATION, UNNAMED FIELD,
ARAPAHOE COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1301-SP-11
ORDER NO. 535-249
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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 vacate an 640-acre
drilling and spacing unit established by Order No. 535-145 for Section 14,
Township 5 South, Range 64 West, 6th
P.M. and establish two approximate 1280-acre drilling and spacing units for
Sections 11, 12, 13 and 14, Township 5 South, Range 64 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.
On March 12, 2012,
the Commission entered Order No. 535-145 which, among other things, established
14 approximate 640-acre drilling and spacing units, and approved 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
permitted wellbore to be located no closer than 460 feet from the boundaries of
the proposed units, and no closer than 920 feet from the completed interval of
another well producing from the same common source of supply. Section 14,
Township 5 South, Range 64 West, 6th P.M. is subject to this Order for
the Niobrara Formation.
5.
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 11, 12 and 13,
Township 5 South, Range 64 West, 6th
P.M. are subject to this Rule for the Niobrara Formation.
6.
On November 2,
2012 (amended December 3, 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 vacate
an approximate 640-acre drilling and spacing unit established by Order No.
535-145 for Section 14, Township 5 South, Range 64 West, 6th P.M.,
and establish two approximate 1280-acre drilling and spacing units for the
below-described lands (“Application Lands”), and to 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
horizontal wellbores to be 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 5 South, Range 64 West, 6th P.M.
Sections 11 and 12:
All
(DSU #1, 1280-acre)
Township 5 South, Range 64 West, 6th P.M.
Sections 13 and 14:
All (DSU #2, 1280-acre)
7.
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.
8.
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.
9.
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.
10.
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 (“EUR”) from analogous
horizontal type wells 271 MBO and the EUR from a long lateral would double to
542 MBO. Additional testimony showed
that the calculated drainage area for long lateral wells in a 1280-acre drilling
and spacing unit is expected to be 522 acres, with a recovery factor of 5%. Further testimony concluded that by
maximizing horizontal well length, the longer lateral well will recover
hydrocarbons which would not otherwise be recovered within 640-acre drilling and
spacing units.
11.
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.
12.
ConocoPhillips has agreed to be bound by the oral order of the Commission.
13.
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 1280-acre drilling and spacing units for
Sections 11, 12, 13 and 14, Township 5
South, Range 64 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 an approximate 640-acre drilling and
spacing unit established by Order No. 535-145 for Section 14, Township 5 South,
Range 64 West, 6th P.M., is hereby vacated, and
two approximate 1280-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 5 South, Range 64 West, 6th P.M.
Sections 11 and 12:
All
(DSU #1, 1280-acre)
Township 5 South, Range 64 West, 6th P.M.
Sections 13 and 14:
All (DSU #2, 1280-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