BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE APPLICATION OF CARRIZO OIL & GAS, INC. FOR AN ORDER TO
APPROVE UP TO SIX HORIZONTAL WELLS WITHIN EACH OF FIVE APPROXIMATE 640-ACRE
DRILLING AND SPACING UNITS FOR SECTION 9, TOWNSHIP 8 NORTH, RANGE 60 WEST,
SECTION 20, TOWNSHIP 8 NORTH, RANGE 61 WEST, SECTION 15, TOWNSHIP 9 NORTH, RANGE
59 WEST AND SECTIONS 25 AND 35, TOWNSHIP 9 NORTH, RANGE 60 WEST, 6TH
P.M., FOR THE NIOBRARA FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1302-AW-09
ORDER NO. 535-265 |
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 a total of six
horizontal wells within each of five approximate 640-acre drilling and spacing
units established for Section 9, Township 8 North, Range 60 West, 6th
P.M., Section 20, Township 8 North, Range 61 West, 6th P.M., Section
15, Township 9 North, Range 59 West, 6th P.M. Sections 25 and 35,
Township 9 North, Range 60 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.
On February 21, 2011, the Commission entered Order No. 535-3 which, among
other things, established 160 approximate 640-acre drilling and spacing units,
and authorized one horizontal well within each unit, for the production of oil,
gas and associated hydrocarbons from the Niobrara Formation. Section 20, Township 8 North, Range
61 West, 6th P.M., Section 15, Township 9 North, Range 59 West, 6th
P.M. and Sections 25 and 35, Township 9 North, Range 60 West, 6th
P.M. are subject to this Order for the Niobrara Formation.
5.
On September 19, 2011, the Commission entered Order No. 535-69 which,
among other things, established 40 approximate 640-acre drilling and spacing
units, and authorized two horizontal wells within each unit, for the production
of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 9, Township 8 North, Range 60
West, 6th P.M. is subject to this Order for the Niobrara Formation.
6.
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 a total of six horizontal wells
within each of five approximate 640-acre drilling and spacing units established
for the below-described lands (“Application 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
wellbore located in the unit, without exception being granted by the Director:
Township 8 North, Range 60 West, 6th P.M.
Section 9:
All
(DSU #1)
Township 8 North, Range 61 West, 6th P.M.
Section 20:
All
(DSU #2)
Township 9 North, Range 59 West, 6th P.M.
Section 15:
All
(DSU #3)
Township 9 North, Range 60 West, 6th P.M.
Section 25:
All
(DSU #4)
Township 9 North, Range 60 West, 6th P.M.
Section 35:
All
(DSU #5)
7.
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.
8.
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.
9.
Geologic testimony and exhibits submitted in support of the Application
by Douglas Reid, Geological Manager for Carrizo, included stratigraphic
cross-sections and gross thickness isopach tests showing the Niobrara Formation
is approximately 320 feet thick and to be consistent, continuous, and underlying
all of the Application Lands.
10.
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.
11.
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.
12.
Carrizo agreed to be bound by oral order of the Commission.
13.
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 a total of six
horizontal wells within each of five approximate 640-acre drilling and spacing
units established for Section 9, Township 8 North, Range 60 West, 6th
P.M., Section 20, Township 8 North, Range 61 West, 6th P.M., Section
15, Township 9 North, Range 59 West, 6th P.M. Sections 25 and 35,
Township 9 North, Range 60 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 a
total of six horizontal wells, are hereby approved, within each of five
approximate 640-acre drilling and spacing units established for the
below-described lands (“Application 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 wellbore
located in the unit, without exception being granted by the Director:
Township 8 North, Range 60 West, 6th P.M.
Section 9:
All
(DSU #1)
Township 8 North, Range 61 West, 6th P.M.
Section 20:
All
(DSU #2)
Township 9 North, Range 59 West, 6th P.M.
Section 15:
All
(DSU #3)
Township 9 North, Range 60 West, 6th P.M.
Section 25:
All
(DSU #4)
Township 9 North, Range 60 West, 6th P.M.
Section 35:
All
(DSU #5)
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