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
ESTABLISH AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT FOR SECTION 10,
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 10, 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-1123
ORDER NOS. 407-822 & 535-382 |
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, 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 10, 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 10, Township 6 North, Range 62 West, 6th P.M. is subject to
this Order for the Niobrara Formation.
5.
On January 23, 2012, the Commission entered Order No.
407-529 which approved a well location exception to the requirements of
Commission Rule 318A Greater Wattenberg Area drilling windows for the proposed
horizontal well, the Dutch Lake #08-10H Well, to be drilled from a surface
location of 519 feet FNL and 230 feet FWL in the NW¼ NW¼ of Section 10, Township
6 North, Range 62 West, 6th P.M., for the production of oil, gas and
associated hydrocarbons from the Niobrara Formation.
6.
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 10, Township 6 North, Range 62 West, 6th P.M. is subject to
Rule 318A for the Codell and Niobrara Formations.
7.
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 10:
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.
8.
On July 16, 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 the Applicant has a leasehold
interest in the Applicant Lands with the right to drill.
10.
Geologic testimony and exhibits submitted in support of the Application by John
G. Roesink, Senior Petroleum Geologist for BBC, showed that the Niobrara
Formation underlies the entirety of the Application Lands and ranges from
approximately 265 to 268 feet thick, and the Codell Formation also underlies the
entirety of the Application Lands and ranges in thickness from about 11 to 12
feet. The testimony showed that the
Niobrara Formation and the Codell Formation are consistent, continuous, and
underlying all of the Application Lands.
11.
Engineering testimony and exhibits submitted in support of the Application by
Mark Stouffer, Manager of 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 lateral wells 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 resolved all
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 10,
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 that:
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.
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 10:
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.
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 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