BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF BILL BARRETT CORPORATION FOR AN ORDER TO
APPROVE UP TO EIGHT HORIZONTAL WELLS WITHIN AN APPROXIMATE 640-ACRE DRILLING AND
SPACING UNIT FOR SECTION 35, TOWNSHIP 6 NORTH, RANGE 62 WEST, 6TH
P.M., FOR THE NIOBRARA FORMATION, AND TO ESTABLISH AN APPROXIMATE 640-ACRE
DRILLING AND SPACING UNIT FOR SECTION 35, TOWNSHIP 6 NORTH, RANGE 62 WEST, 6TH
P.M., FOR THE CODELL FORMATION, WATTENBERG FIELD, WELD COUNTY, COLORADO |
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CAUSE NOS. 407 & 535
DOCKET NO. 1307-SP-1122
ORDER NOS. 407-821 & 535-381 |
REPORT OF THE COMMISSION
The Commission heard this matter on July 29, 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 approve an additional seven
horizontal wells, for a total of up to eight horizontal wells, within an
approximate 640-acre drilling and spacing unit established for Section 35,
Township 6 North, Range 62 West, 6th P.M., for the production of oil,
gas, and associated hydrocarbons from the Niobrara Formation; and to establish
an approximate 640-acre drilling and spacing unit, and approve up to four
horizontal wells within the unit, for the production of oil, gas, and associated
hydrocarbons from the Codell Formation.
FINDINGS
The Commission finds as follows:
1.
Bill Barrett Corporation, (“BBC” 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 (Corrected
April 4, 2013), the Commission entered Order No. 535-4 which, among other
things, established 74 approximate 640-acre drilling and spacing units, and
approved one horizontal well within each unit, for the production of oil, gas
and associated hydrocarbons from the Niobrara Formation.
Section 35, Township 6 North, Range 62
West, 6th P.M. is subject to this Order for the Niobrara Formation.
5.
On April 27, 1988, the Commission adopted Rule 318A which, among other
things, allowed certain drilling locations to be utilized to drill or twin a
well, deepen a well or recomplete a well and to commingle any or all Cretaceous
Age Formations from the base of the Dakota Formation to the surface. Rule 318A supersedes all prior
Commission drilling and spacing orders affecting well location and density
requirements of Greater Wattenberg Area wells. On December 5, 2005,
Rule 318A was amended, among other things, to allow interior infill and boundary
wells to be drilled and wellbore spacing units to be established. On
August 8, 2011, Rule 318A was again amended, among other things, to address
drilling of horizontal wells.
Section 35, Township 6 North, Range 62 West, 6th P.M. is subject to
Rule 318A for the Codell and Niobrara Formations.
6.
On May 30, 2013, BBC, by its attorneys, filed with the
Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”)
for an order to: 1) approve an additional seven horizontal wells, for a total of
up to eight horizontal 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; and 2) establish an approximate 640-acre drilling and spacing unit
for the Application Lands and approve up to four horizontal wells within the
unit, for the production of oil, gas, and associated hydrocarbons from the
Codell Formation, with the treated interval of the wellbore to be located no
closer than
460 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 62 West, 6th P.M.
Section 35:
All
Applicant stated the proposed
wells shall be located on no more than two multi-well pads within the drilling
and spacing unit within Rule 318A drilling windows or on adjacent lands with
surface owner consent.
7.
Applicant states the proposed wells shall be located on no more than two
multi-well pads within the drilling and spacing unit within Rule 318A drilling
windows or on adjacent lands with surface owner consent.
8.
On July 17, 2013, BBC, 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
Hal Writer, Senior Landman for BBC, showed that the Applicant had a leasehold
interest and a right to drill in the Application Lands.
10.
Geologic testimony and exhibits submitted in support of the Application by John
Roesink, Petroleum Geologist for BBC, showed that the Niobrara Formation
underlies the entirety of the Application Lands and ranges from 12 to 14 feet
thick. Further testimony showed the
Codell Formation is a sequence of siltstones and sandstones and is a common
source of supply.
11.
Engineering testimony and exhibits submitted in support of the Application by
Mark Stouffer, Reservoir Engineering Advisor for BBC, showed that drilling and
completing horizontal wells within the Codell and Niobrara Formations underlying
the Application Lands is an efficient and economic method of developing the
resource. Further testimony revealed
the well drainage area for 640-acre would accommodate up to eight horizontal
Niobrara wells and up to four horizontal Codell wells. Testimony concluded the
economics of the project were 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. BBC
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: 1) approve an additional seven
horizontal wells, for a total of up to eight horizontal wells, within an
approximate 640-acre drilling and spacing unit established for Section 35,
Township 6 North, Range 62 West, 6th P.M., for the production of oil,
gas, and associated hydrocarbons from the Niobrara Formation: and 2) establish
an approximate 640-acre drilling and spacing unit, and approve up to four
horizontal wells within the unit, for the production of oil, gas, and associated
hydrocarbons from the Codell Formation.
ORDER
IT IS HEREBY ORDERED:
1.
An additional seven horizontal wells, for a total of up to eight
horizontal wells within an approximate 640-acre drilling and spacing unit
established for the below-described lands, are hereby approved, for the
production of oil, gas and associated hydrocarbons from the Niobrara Formation.
Township 6 North, Range 62 West, 6th P.M.
Section 35:
All
2.
An approximate 640-acre drilling and spacing unit for the below-described
lands, is hereby established, and up to four horizontal wells within the unit,
are hereby approved, for the production of oil, gas and associated hydrocarbons
from the Codell Formation:
Township 6 North, Range 62 West, 6th P.M.
Section 35:
All
3.
The treated interval of the horizontal wellbore shall be no closer than
460 feet from the unit boundaries, and no closer than 150 feet from the treated
interval of any other wellbore located in the unit.
4.
The proposed wells shall be located on no more than two multi-well pads
within the drilling and spacing unit within Rule 318A drilling windows.
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 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.
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