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

REPORT OF THE COMMISSION

            The Commission heard this matter on July 29, 2013, at offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to approve an appropriate number of wells, not to exceed 32 wells, within an approximate 640-acre drilling and spacing unit established for Section 25, Township 10 North, Range 58 West, 6^th P.M., and to modify existing setbacks 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.         On February 22, 2011, the Commission entered Order No. 535-3 which, among other things, established 160 approximate 640-acre drilling and spacing units, and approved up to one horizontal well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Section 25, Township 10 North, Range 58 West, 6^th P.M. is subject to this Order for the Niobrara Formation.

5.         On March 25, 2013, the Commission entered Order No. 535-296 which approved up to eight horizontal wells within each of 21 approximate 640 to 960-acre drilling and spacing units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  The Commission further approved the treated interval of the wellbore to be no closer than 100 feet from the unit boundary and no closer than 200 feet from the treated interval of any other wellbore producing from the Niobrara Formation.  Section 25, Township 10 North, Range 58 West, 6^th P.M. is subject to this Order for the Niobrara Formation.

6.         On May 6, 2013, the Commission entered Order No. 535-314 which approved up to sixteen horizontal wells within each of 21 approximate 640 to 960-acre drilling and spacing units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Section 25, Township 10 North, Range 58 West, 6^th P.M. is subject to this Order for the Niobrara Formation.

7.         On May 30, 2013, Whiting, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an order to approve an appropriate number of wells, not to exceed 32 wells, within an approximate 640-acre drilling and spacing unit established for the below-described lands (“Application Lands”) for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the intrawell distance to be no closer than 100 feet from the treated interval of any other wellbore producing from the Niobrara Formation, and no closer than 100 feet from a unit boundary unless such boundary abuts or corners lands for which the Commission has not at the time of the drilling permit application granted the right to locate the treated interval of the wellbore no closer than 100 feet from a unit boundary, without exception being granted by the Director.  If the Commission has not at the time of the drilling permit application granted to the owners of the adjacent or cornering lands the right to locate the treated interval of the wellbore no closer than 100 feet from a unit boundary, then the treated interval of the wellbore shall be located no closer than the distance permitted in the adjacent or cornering lands, without exception being granted by the Director:

                        Township 10 North, Range 58 West, 6^th P.M.                       

                        Section 25:      All

8.         On July 17, 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.

            9.         Land testimony and exhibits submitted in support of the Application by Scott McDaniel, Regional Land Manager for Whiting, showed that Whiting owns significant leasehold interests in the Application Lands, and that all of the unleased mineral interest owners and mineral lessees within the Application Lands and lands which are contiguous or corner to the Application Lands received notice of this Application.

10.       Geologic testimony and exhibits submitted in support of the Application by Mark K. Odegard, Staff Geologist for Whiting, showed the gross thickness of the Niobrara Formation averages 325 feet across the Application Lands. Testimony further showed the Niobrara Formation is present and continuous throughout the Application Lands and constitutes a common source of supply.

11.       Engineering testimony and exhibits submitted in support of the Application by Ralph L. Nelms, Senior Reservoir Engineer for Whiting, included rate transient analysis (RTA), data from downhole pressure gauge responses, and volumetric and economic analysis supporting horizontal offset wellbore density of up to 32 wells within the unit.  Estimated ultimate recovery (“EUR”) 142 MBO of oil and 128 MMCF of gas per well.  Further testimony concluded the economics of the project are 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.       Whiting 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 an appropriate number of wells, not to exceed 32 wells, within an approximate 640-acre drilling and spacing unit established for Section 25, Township 10 North, Range 58 West, 6^th P.M., and to modify existing setbacks for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

ORDER

IT IS HEREBY ORDERED:

1.         Up to 32 horizontal wells, are hereby approved, within an approximate 640-acre drilling and spacing unit established for the below-described lands, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the intrawell distance to be no closer than 100 feet from the treated interval of any other wellbore producing from the Niobrara Formation, and no closer than 100 feet from a unit boundary unless such boundary abuts or corners lands for which the Commission has not at the time of the drilling permit application granted the right to locate the treated interval of the wellbore no closer than 100 feet from a unit boundary, without exception being granted by the Director.  If the Commission has not at the time of the drilling permit application granted to the owners of the adjacent or cornering lands the right to locate the treated interval of the wellbore no closer than 100 feet from a unit boundary, then the treated interval of the wellbore shall be located no closer than the distance permitted in the adjacent or cornering lands, without exception being granted by the Director:

                        Township 10 North, Range 58 West, 6^th P.M.                       

                        Section 25:      All

2.         All other provisions of Order Nos. 535-296 and 535-314 remain unaffected by this Order.

IT IS FURTHER ORDERED:

1.         The provisions contained in the above order shall become effective immediately.

2.         The Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

3.         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.

4.         An application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.

ENTERED this   27   day of August, 2013, as of July 29, 2013.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary