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

 

IN THE MATTER OF THE APPLICATION OF CONOCOPHILLIPS COMPANY FOR AN ORDER TO POOL ALL INTERESTS WITHIN AN APPROXIMATE 960-ACRE EXPLORATORY DRILLING AND SPACING UNIT FOR SECTIONS 13 AND 14, TOWNSHIP 4 SOUTH, RANGE 65 WEST, 6TH P.M. FOR THE NIOBRARA FORMATION, UNNAMED FIELD, ARAPAHOE COUNTY, COLORADO

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CAUSE NO. 535

 

DOCKET NO. 1312-UP-249

 

ORDER NO. 535-453

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on December 16, 2013, at the Ralph L. Carr Colorado Judicial Center, 1300 Broadway, 1st Floor, Room 1E, Denver, Colorado, upon application for an order to pool all interests within an approximate 960-acre drilling and spacing unit established for Sections 13 and 14, Township 4 South, Range 65 West, 6th P.M. to accommodate the Prosper Farms 4-65 13-14 1H Well, for the development and operation of the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         ConocoPhillips Company (“ConocoPhillips” 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 November 29, 2011, the Commission entered Order No. 535-97 which, among other things, established 25 approximate 640-acre drilling and spacing units and approved up to two horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 14, Township 4 South, Range 65 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

5.         On December 12, 2011, the Commission entered Order No. 535-100 which, among other things, granted a well location exception to the requirements of Commission Rule 318.a. for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Section 13, Township 4 South, Range 65 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

6.         On October 17, 2013, ConocoPhillips, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified concurrent application (“Concurrent Application”), Docket No. 1312-SP-1207, for an order to vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 14, Township 4 South, Range 65 West, 6th P.M.; 2) vacate the well exception location established by Order No. 535-100 for Section 13, Township 4 South, Range 65 West, 6th P.M.; and 3) establish an approximate 960-acre exploratory drilling and spacing unit and approve one horizontal well within the unit.

 

7.         On October 17, 2013, ConocoPhillips, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to pool all interests in an approximate 960-acre exploratory drilling and spacing unit established for the below-described lands (“Application Lands”), for the development and operation of the Niobrara Formation, effective as of the earlier of the date of the Application, or the date that any of the costs specified in C.R.S. §34-60-116(7)(b)(II) were first incurred for the drilling of the Prosper Farms 4-65 13-14 1H (API No. to be determined):

 

Township 4 South, Range 65 West, 6th P.M.

Section 13:  W˝

Section 14:  All

 

8.         On December 3, 2013, ConocoPhillips, 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 Samuel A. Hamidi, Landman for ConocoPhillips, showed that there are no nonconsenting parties and no cost recovery penalties being sought from this Application.

 

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.       ConocoPhillips agreed to be bound by oral order of the Commission. 

 

12.       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 pool all interests within an approximate 960-acre drilling and spacing unit established for Sections 13 and 14, Township 4 South, Range 65 West, 6th P.M. to accommodate the Prosper Farms 4-65 13-14 1H Well, for the development and operation of the Niobrara Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, all interests in an approximate 960-acre drilling and spacing unit  established for the below-described lands, are hereby pooled, for the development and operation of the Niobrara Formation, effective as of the earlier of the date of the Application, or the date that any of the costs specified in C.R.S. §34-60-116(7)(b)(II) are first incurred for the drilling of the Prosper Farms 4-65 13-14 1H Well:

 

Township 4 South, Range 65 West, 6th P.M.

Section 13:  W˝

Section 14:  All

 

2.         The production obtained from the drilling and spacing unit shall be allocated to each owner in the unit on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within the drilling and  spacing unit; each owner of an interest in the drilling and spacing unit shall be entitled to receive its share of the production of the Well located on the drilling and spacing unit applicable to its interest in the drilling and spacing unit.

 

3.         The operator of the well drilled on the above-described drilling and spacing unit shall furnish the nonconsenting owners with a monthly statement of all costs incurred, together with the quantity of oil and gas produced, and the amount of proceeds realized from the sale of production during the preceding month.

 

4.         Nothing in this order is intended to conflict with §34-60-116, C.R.S., as amended.  Any conflict that may arise shall be resolved in favor of the statute.

 

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 _____ day of January, 2014, as of December 16, 2013.

 

           

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary