BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF CONDOR ENERGY TECHNOLOGY LLC FOR AN ORDER TO
VACATE AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT ESTABLISHED BY ORDER
407-374 AND ESTABLISH AN APPROXIMATE
1280-ACRE EXPLORATORY DRILLING AND SPACING UNIT AND APPROVE UP TO EIGHT HORIZONTAL WELLS WITHIN THE UNIT, FOR SECTIONS 6 AND 7,
TOWNSHIP 6 NORTH, RANGE 60 WEST, 6TH P.M., FOR THE NIOBRARA
FORMATION, UNNAMED FIELD, MORGAN COUNTY, COLORADO |
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CAUSE NOS. 407 & 535
DOCKET NO. 1305-SP-61
ORDER NOS. 407-782 & 535-321 |
REPORT OF THE COMMISSION
The Commission heard this matter on May 6, 2013, at the Weld County Southwest
Services Complex, 4209 Weld County Road 24 ½, Longmont, Colorado, upon
application for an order to: 1) vacate an approximate 640-acre drilling and
spacing unit established by Order No. 407-374 for Section 6, Township 6 North,
Range 60 West, 6th P.M.; and 2) establish an approximate 1280-acre
exploratory drilling and spacing unit for Sections 6 and 7, Township 6 North,
Range 60 West, 6th P.M., and approve up to eight horizontal wells
within the unit, for the production of oil, gas and associated hydrocarbons from
the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1.
Condor Energy Technology, LLC (“Condor” 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 July 8, 2010, the Commission entered Order No. 407-374 which, among
other things, established 11 approximate 640-acre 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.
Section 6, Township 6 North, Range 60 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.
Section 7, Township 6 North, Range 60 West, 6th P.M. is subject to
Rule 318.a. for the Niobrara Formation.
6.
On March 7, 2013, Condor, 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. 407-374 for Section 6, Township 6 North, Range 60 West, 6th
P.M., and establish an approximate 1280-acre exploratory drilling and spacing
unit for the below-described lands (“Application Lands”), and approve up to
eight horizontal wells within the 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 6 North, Range 60 West, 6th
P.M.
Section 6:
All
Section 7:
All
7.
On April 23, 2013, Condor, 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
Sean Fitzgerald, Land Manager for South Texas Reservoir Alliance LLC as contract
operator for Condor, showed that the surface of the Application Lands is owned
in fee, the mineral ownership of the Application Lands is held in fee, and that
Condor owns a partial leasehold ownership interest in the Application Lands.
9.
Geologic testimony and exhibits submitted in support of the Application
by Amy K. Noack, Senior Geologist for South Texas Reservoir Alliance LLC as
contract operator for Condor, showed an analysis of cross-sections from nearby
Niobrara Formation type wells, demonstrating the Niobrara Formation underlies,
and is generally of uniform thickness throughout the Application Lands.
10.
Engineering testimony and exhibits submitted in support of the Application by
Sean Fitzgerald, Engineering Manager for South Texas Reservoir Alliance LLC as
contract operator for Condor, indicated that the use of horizontal wells in the
Application Lands is necessary to increase the recovery of hydrocarbons from the
reservoir and the economics utilized for the project are economic and efficient.
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.
Condor 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: 1) vacate an approximate 640-acre
drilling and spacing unit established by Order No. 407-374 for Section 6,
Township 6 North, Range 60 West, 6th P.M.; and 2) establish an
approximate 1280-acre exploratory drilling and spacing unit for Sections 6 and
7, Township 6 North, Range 60 West, 6th P.M., and approve up to eight
horizontal wells within the 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. 407-374 for Section 6, Township 6 North, Range 60
West, 6th P.M., is hereby vacated.
IT IS FURTHER ORDERED, that an approximate 1280-acre exploratory drilling and
spacing unit for the below-described lands, is hereby established, and up to
eight horizontal wells within the 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 6 North, Range 60 West, 6th
P.M.
Section 6:
All
Section 7:
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 Procedures 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 May, 2013, as of May 6, 2013.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary