BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF DAKOTA EXPLORATION, LLC FOR AN ORDER TO
ESTABLISH AN APPROXIMATE 640-ACRE DRILLING AND SPACING UNIT AND APPROVE UP TO
FOUR HORIZONTAL WELLS WITHIN THE UNIT FOR SECTION 11, TOWNSHIP 11 NORTH, RANGE
59 WEST, 6TH P.M., FOR THE NIOBRARA FORMATION, UNNAMED FIELD, WELD
COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1307-SP-1139
ORDER NO. 535-399 |
REPORT OF THE COMMISSION
The Commission heard this matter on September 16, 2013, at the offices of the
Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver,
Colorado, upon application for an order to establish an approximate 640-acre
drilling and spacing unit established for Section 11, Township 11 North, Range
59 West, 6th P.M., and approve up to four horizontal wells within the
unit, for the production of oil, gas, and related hydrocarbons of the Niobrara
Formation.
FINDINGS
The Commission finds as
follows:
1.
Dakota Exploration (“Dakota” 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, on unspaced lands, 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 11, Township 11 North, Range
59 West, 6th P.M. is subject to Rule 318.a. for the Niobrara
Formation.
5.
On May 30, 2013, Dakota, 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 four 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 within the
unit, with no more than one wellpad in each quarter quarter section within the
unit, without exception being granted by the Director:
Township 11 North, Range 59 West, 6th P.M.
Section 11:
All
6.
On July 16, 2013 (supplemented on September 4, 2013), Dakota, 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
Kevin Conners, Manager/Owner of Conners Oil and Gas LLC, Contractor for Dakota,
showed that Dakota holds oil and gas leasehold interests in the Niobrara
Formation in the Application Lands.
8.
Geologic Testimony and exhibits submitted in support of the Application
by Jacob Cinnamon, Petroleum Geologist for Dakota, showed that the Niobrara
Formation is underlying the Application Lands ranges from 180-200 feet thick and
is a common source of supply and generally is of uniform thickness throughout
the entire spacing area.
9.
Engineering Testimony and exhibits submitted in support of the
Application by Derek K. Waits, Petroleum Engineer for Dakota, showed that the
estimated drainage area is 160-acres per well and over 238 Stock Tank Barrels
per well. Additional testimony
concluded that the projected economics are good.
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. Dakota
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 established for Section 11, Township 11 North, Range 59 West, 6th
P.M., and approve up to four horizontal wells within the unit, for the
production of oil, gas, and related hydrocarbons of the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1.
An
approximate 640-acre drilling and spacing unit, is hereby established, and up to
four horizontal wells within the unit established for the below-described lands,
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 150 feet from the treated interval of any other wellbore located in the
unit, without exception being granted by the Director:
Township 11 North, Range 59 West, 6th P.M.
Section 11:
All
2.
The proposed wells shall be located on no more than one wellpad in each quarter
quarter section within the unit.
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
11th
day of October, 2013, as of September 16,
2013.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary