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. 

 

            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  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