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

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, Suite 801, Denver, Colorado, upon application for an order to establish ten approximate 960-acre drilling and spacing units for Sections 1-3, 6-7, 9-12, 14-16, 18, 25, 27, 34 and 36, Township 11 North, Range 58 West, 6^th P.M.  and approve up to four 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.         Whiting Oil and Gas Corporation (“Whiting” 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 1-3, 6-7, 9-12, 14-16, 18, 25, 27, 34 and 36, Township 11 North, Range 58 West, 6^th P.M. are subject to Rule 318.a. for the Niobrara Formation.

5.         On December 13, 2012, Whiting, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an order to establish ten approximate 960-acre drilling and spacing units for the below-described lands (“Application Lands”), and approve up to four 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 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 11 North, Range 58 West, 6^th P.M.                                    (DSU #1)

Section 1:        All (comprised of Lots 1, 2, 3, 4, S½ N½, S½)

Section 12:      N½

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #2)

Section 2:        All (comprised of Lots 1, 2, 3, 4, S½ N½, S½)

Section 11:      N½

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #3)

Section 3:        All (comprised of Lots 1, 2, 3, 4, S½ N½, S½)

Section 10:      N½

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #4)

Section 6:        All (comprised of Lots 1, 2, 3, 4, 5, 6, 7, SE¼ NW¼, S½ NE¼, E½ SW¼, SE¼)

Section 7:        N½ (comprised of Lots 1, 2, E½ NW¼, NE¼)

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #5)

Section 7:        S½ (comprised of Lots 3, 4, E½ SW¼, SE¼)

Section 18:      All (comprised of Lots 1, 2, 3, 4, E½ W½, E½)

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #6)

Section 9:        S½

Section 16:      All

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #7)

Section 10:      S½

Section 15:      All

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #8)

Section 11:      S½

Section 14:      All

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #9)

Section 25:      S½

Section 36:      All

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #10)

Section 27:      S½

Section 34:      All

Applicant requests that the surface location of the permitted wells be located anywhere on the surface within the proposed unit.

6.         On January 29, 2013, Whiting, 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 Scott McDaniel, Regional Land Manager for Whiting, showed that Whiting owns a significant leasehold in the Application Lands.

8.         Geologic testimony and exhibits submitted in support of the Application by Mark K. Odegard, Senior Geologist for Whiting, showed the gross thickness of the Niobrara Formation under the Application Lands ranges from 296-360 feet thick, and averages 340 feet across the Application Lands.  Across the Application lands, the Niobrara generally dips down to the west at approximately 40 – 60 feet per mile. Testimony further showed the Niobrara Formation is present and continuous throughout the Application Lands and shares a common source of supply.

9.         Engineering testimony and exhibits submitted in support of the Application by Ralph L. Nelms, Senior Reservoir Engineer for Whiting, showed estimated ultimate recovery (“EUR”) from the Niobrara Formation to be 378,203 stock tank barrels (“STB”) per horizontal well for a total of 1,512,810 STB.  Additional testimony estimated a recovery factor of 5.0% from the Niobrara Formation.  The drainage area for each of the four horizontal wells is 240 acres per well.  Further testimony concluded the economics of the project were 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.       Whiting 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 Hearing Officer review of the Application under Rule 511., the Commission should enter an order to establish ten approximate 960-acre drilling and spacing units for Sections 1-3, 6-7, 9-12, 14-16, 18, 25, 27, 34 and 36, Township 11 North, Range 58 West, 6^th P.M. and approve up to four 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 ten approximate 960-acre drilling and spacing units for the below-described lands, is hereby established, and up to four horizontal wells within each 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 11 North, Range 58 West, 6^th P.M.                                    (DSU #1)

Section 1:        All (comprised of Lots 1, 2, 3, 4, S½ N½, S½)

Section 12:      N½

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #2)

Section 2:        All (comprised of Lots 1, 2, 3, 4, S½ N½, S½)

Section 11:      N½

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #3)

Section 3:        All (comprised of Lots 1, 2, 3, 4, S½ N½, S½)

Section 10:      N½

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #4)

Section 6:        All (comprised of Lots 1, 2, 3, 4, 5, 6, 7, SE¼ NW¼, S½ NE¼, E½ SW¼, SE¼)

Section 7:        N½ (comprised of Lots 1, 2, E½ NW¼, NE¼)

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #5)

Section 7:        S½ (comprised of Lots 3, 4, E½ SW¼, SE¼)

Section 18:      All (comprised of Lots 1, 2, 3, 4, E½ W½, E½)

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #6)

Section 9:        S½

Section 16:      All

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #7)

Section 10:      S½

Section 15:      All

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #8)

Section 11:      S½

Section 14:      All

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #9)

Section 25:      S½

Section 36:      All

Township 11 North, Range 58 West, 6^th P.M.                                    (DSU #10)

Section 27:      S½

Section 34:      All

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