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

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 vacate two approximate 640-acre drilling and spacing units established by Order No. 535-3 for Sections 13 and 24, Township 8 North, Range 61 West, 6^th P.M., and establish an  approximate 1,280-acre drilling and spacing unit for Sections 13 and 24, Township 8 North, Range 61 West, 6^th P.M., and approve up to two horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation.

FINDINGS

The Commission finds as follows:

1.         Noble Energy, LLC (“Noble” 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 issued Order No. 535-3 which, among other things, established 160 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.  Sections 13 and 24, Township 8 North, Range 61 West, 6^th P.M. are subject to Order No. 535-3 for the Niobrara Formation.

            5.         On April 18, 2013 (Amended August 19, 2013), Noble, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified amended application (“Amended Application”) for an order to vacate two approximate 640-acre drilling and spacing units established by Order No. 535-3 for Sections 13 and 24, Township 8 North, Range 61 West, 6^th P.M., and establish an  approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to two horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell-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, without exception being granted by the Director:

Township 8 North, Range 61 West, 6^th P.M.

Section 13:      All

Section 24:      All

6.         On September 3, 2013, Noble, 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 Julie T. Jenkins, Land Manager for Noble, showed the Application Lands consist of fee mineral interests and Noble holds leasehold ownership in a substantial portion of the Application Lands.

8.         Geologic testimony and exhibits submitted in support of the Application by Mark Nicholson, Geologist for Noble, showed the Codell Formation is present throughout the Application Lands, is approximately 9 feet thick in the area of interest, and the Niobrara Formation is present throughout the Application Lands, is approximately 225 feet thick in the area of interest and both formations are generally of uniform thickness throughout the Application Lands.

9.         Engineering testimony and exhibits submitted in support of the Application by Evan White, Development Engineer for Noble, showed that the estimated recovery factor of hydrocarbons under the Application Lands using downspaced horizontal laterals would improve from 0.22% for 16 vertical wells to .70% for 2 extended reach horizontal wells.  Testimony concluded the estimated ultimate recovery (“EUR”) is 298 MBOE of oil and 447 MCF of gas, showing the economics of the project are favorable.

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.       Noble 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 vacate two approximate 640-acre drilling and spacing units established by Order No. 535-3 for Sections 13 and 24, Township 8 North, Range 61 West, 6^th P.M., and establish an  approximate 1,280-acre drilling and spacing unit for Sections 13 and 24, Township 8 North, Range 61 West, 6^th P.M., and approve up to two horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formation.

ORDER

IT IS HEREBY ORDERED:

            1.         Two approximate 640-acre drilling and spacing units established by Order No. 535-3 for Sections 13 and 24, Township 8 North, Range 61 West, 6^th P.M., are hereby vacated.

            2.         An  approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and up to two horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell-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, without exception being granted by the Director:

Township 8 North, Range 61 West, 6^th P.M.

Section 13:      All

Section 24:      All

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  11^th  day of October, 2013, as of September 16, 2013.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary