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

 

IN THE MATTER OF THE APPLICATION OF CARRIZO OIL & GAS, INC. FOR AN ORDER TO APPROVE UP TO SIX HORIZONTAL WELLS WITHIN EACH OF THREE APPROXIMATE 640-ACRE EXPLORATORY DRILLING AND SPACING UNITS FOR SECTIONS 28, 31 AND 33, TOWNSHIP 10 NORTH, RANGE 59 WEST, 6TH P.M., FOR THE NIOBRARA FORMATION, UNNAMED FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 535

 

DOCKET NO. 1302-AW-07

 

ORDER NO. 535-264

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on February 11, 2013, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to approve up to six horizontal wells within each of three approximate 640-acre exploratory drilling and spacing units established for Sections 28, 31, and 33, Township 10 North, Range 59 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Carrizo Oil and Gas, Inc. (“Carrizo” 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 28, 31, and 33, Township 10 North, Range 59 West, 6th P.M. are subject to this Rule for the Niobrara Formation.

 

5.         On December 13, 2012, Carrizo, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”), for an order to approve up to six horizontal wells within each of four approximate 640-acre exploratory drilling and spacing units established for the below-described lands, 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 600 feet from the treated interval of any other well located in each unit, without exception being granted by the Director:

 

Township 8 North, Range 60 West, 6th P.M.

Section 27:      All                    (DSU #1)

 

Township 10 North, Range 59 West, 6th P.M.

Section 28:      All                    (DSU #2)

Section 31:      All                    (DSU #3)

Section 33:      All                    (DSU #4)

 

6.         On February 1, 2013, Carrizo, by its attorneys, filed an amended application (“Amended Application”), withdrawing the below-described lands from the Application:

 

Township 8 North, Range 60 West, 6th P.M.

Section 27:      All

 

7.         The following below-described lands (“Application Lands”) remain subject to the Application:

 

Township 10 North, Range 59 West, 6th P.M.

Section 28:      All                    (DSU #1)

Section 31:      All                    (DSU #2)

Section 33:      All                    (DSU #3)

 

8.         On January 29, 2013, Carrizo, 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.

 

9.         Land testimony and exhibits submitted in support of the Application by Craig E. Wiest, Land Manager for Carrizo, showed the Applicant is an owner with the right to drill in the Application Lands.

 

10.       Geologic testimony and exhibits submitted in support of the Application by Paul Fears, Geological Manager for Carrizo, included stratigraphic cross-sections and gross thickness isopach tests showing the Niobrara Formation is approximately 330 feet thick and to be consistent, continuous, and underlying all of the Application Lands.

 

11.       Engineering testimony and exhibits submitted in support of the Application by Stephen C. Peters, Manager of Reservoir Engineering for Carrizo, showed an estimated ultimate recovery (“EUR”) of 200 MBO and a drainage area estimated at 70-acres, for analogous type wells drilled by Carrizo within its Weld County operational area.  Testimony further showed drainage estimates for the best 35 horizontal wells in the nearby Silo Field varied from 41 to 356-acres, with an average of 78-acres.  Testimony concluded the economics of the project were sound.

 

12.       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.

 

13.       Carrizo agreed to be bound by oral order of the Commission. 

 

14.       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 approve up to six horizontal wells within each of three approximate 640-acre exploratory drilling and spacing units established for Sections 28, 31, and 33, Township 10 North, Range 59 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that up to six horizontal wells within each of three approximate 640-acre exploratory drilling and spacing units established for the below-described lands, 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 600 feet from the treated interval of any other well located in each unit, without exception being granted by the Director:

 

Township 10 North, Range 59 West, 6th P.M.

Section 28:      All                    (DSU #1)

Section 31:      All                    (DSU #2)

Section 33:      All                    (DSU #3)

 

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 February, 2013, as of February 11, 2013.

           

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary