BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF CARRIZO OIL AND GAS, INC., FOR AN ORDER TO
ESTABLISH AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT AND APPROVE UP TO
SIX HORIZONTAL WELLS WITHIN THE UNIT FOR SECTION 8, TOWNSHIP 10 NORTH, RANGE 59
WEST, 6TH P.M., FOR THE NIOBRARA FORMATION, UNNAMED FIELD, WELD
COUNTY, COLORADO |
)
)
)
)
)
)
)
) |
CAUSE NO. 535
DOCKET NO. 1305-SP-69
ORDER NO. 535-327 |
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 establish an approximate 640-acre drilling and spacing unit for
Section 8, Township 10 North, Range 59 West, 6th P.M., and
approve up to six 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.
Carrizo Oil & 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. Section 8, Township 10 North, Range
59 West, 6th P.M. is subject to Rule 318.a. for the Niobrara
Formation.
5.
On March 7, 2013, Carrizo,
by its attorneys, filed with the Commission pursuant to
§34-60-116 C.R.S., a verified application (“Application”) for an order to
establish an approximate 640-acre drilling and spacing unit for the
below-described lands (“Application Lands”), and approve up to six horizontal
wells within the unit, for the production of oil, gas and associated
hydrocarbons from the Niobrara Formation, with the treated interval of the
horizontal wellbore to be 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
10 North, Range 59 West, 6th P.M.
Section 8:
All
6.
On April 23, 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.
7.
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.
8.
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 350 feet thick and to be consistent, continuous, and underlying
all of the Application Lands.
9.
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.
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.
Carrizo 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 an approximate 640-acre drilling and spacing unit for
Section 8, Township 10 North, Range 59 West, 6th P.M., and
approve up to six 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 for the below-described lands, is hereby
established, and up to six 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 horizontal wellbore to be
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
10 North, Range 59 West, 6th P.M.
Section 8:
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 May, 2013, as of May 6, 2013.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary