BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE APPLICATION OF CONOCOPHILLIPS COMPANY FOR AN ORDER TO ESTABLISH AN APPROXIMATE 1280-ACRE EXPLORATORY DRILLING AND SPACING UNIT FOR SECTIONS 11 AND 12, 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. 1401-SP-2008
ORDER NO. 535-459 |
REPORT OF THE COMMISSION
The Commission heard this matter on January 27, 2014, at the Centennial Building, 1313 Sherman Street, Room 318, Denver, Colorado, upon application for an order to vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 12, Township 4 South, Range 65 West, 6th P.M., and establish an approximate 1280-acre exploratory drilling and spacing unit for Sections 11 and 12, Township 4 South, Range 65 West, 6th P.M., and approve up to two horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from 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. Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that 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 4 South, Range 65 West, 6th P.M. is subject to Rule 318.a. for the Niobrara Formation.
5. 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 12, Township 4 South, Range 65 West, 6th P.M. is subject to this Order for the Niobrara Formation.
6. On November 27, 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 vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 12, Township 4 South, Range 65 West, 6th P.M. and establish an approximate 1280-acre exploratory 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 Niobrara Formation, with the productive interval of the wellbore to be located no closer than 460 feet from the unit boundaries, and no closer than 960 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:
Township 4 South, Range 65 West, 6th P.M.
Section 11: All
Section 12: All
7. Applicant states the proposed wells shall be drilled from no more than two wellpads within the drilling and spacing unit.
8. On January 13, 2014, 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 Julia Browning, Landman for ConocoPhillips, showed that ConocoPhillips has a right to drill in the Application Lands.
10. Geologic Testimony and exhibits submitted in support of the Application by Dana Helbert, Senior Geologist for ConocoPhillips, showed that the Niobrara Formation underlies the entirety of the Application Lands and is a sequence of chalks, marls and limestones. Further testimony showed the Niobrara Formation is approximately 315 feet thick under the Application Lands from the top of the Niobrara to the top of the Ft Hayes Limestone.
11. Engineering Testimony and exhibits submitted in support of the Application by Clint Hutchinson, Lead Reservoir Engineer for ConocoPhillips, showed that drilling and completing horizontal wells within the Niobrara Formation underlying the Application Lands is the most efficient and economic method of developing the resource. A long lateral exposes an additional 920 feet of reservoir and would permit the recovery of the resource within the 920-foot area between the two sections which would not be recovered with 640-acre spacing and 460-foot setbacks on each side of the section line. Testimony reveals the well drainage area for a long lateral well is not greater than 407.3 acres per individual well and not greater than 814.5 acres for two long lateral wells within the Niobrara Formation.
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. ConocoPhillips agreed to be bound by oral order of the Commission.
14. 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 an approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 12, Township 4 South, Range 65 West, 6th P.M., and establish an approximate 1280-acre exploratory drilling and spacing unit for Sections 11 and 12, Township 4 South, Range 65 West, 6th P.M., and approve up to two horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 12, Township 4 South, Range 65 West, 6th P.M., is hereby vacated.
2. An approximate 1280-acre exploratory drilling and spacing unit, for the below-described lands, is hereby established, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 4 South, Range 65 West, 6th P.M.
Section 11: All
Section 12: All
3. Up to two horizontal wells within the unit, are hereby approved, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation, with the productive interval of the wellbore to be located no closer than 460 feet from the unit boundaries, and no closer than 960 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director.
4. The proposed wells shall be located on no more than two wellpads within the drilling and spacing 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 35 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 21st day of February, 2014, as of January 27, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary