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 1280-ACRE EXPLORATORY DRILLING AND SPACING UNIT FOR SECTIONS 9 AND 10, 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-248
ORDER NO. 535-468 |
REPORT OF THE COMMISSION
The Commission heard this matter on March 17, 2014, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to pool all interests within an approximate 1280-acre drilling and spacing unit established for Sections 9 and 10, Township 4 South, Range 65 West, 6th P.M. for the Sky Ranch 4-65 9-10 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. Sections 9 and 10, Township 4 South, Range 65 West, 6th P.M. are subject to this Order for the Niobrara Formation.
5. On December 16, 2013, the Commission entered Order No. 535-448 which, among other things, vacated two approximate 640-acre drilling and spacing units and established an approximate 1280-acre drilling and spacing unit and approved up to two horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation. Sections 9 and 10, Township 4 South, Range 65 West, 6th P.M. are 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 application (“Application”) for an order to pool all interests in an approximate 1280-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) were first incurred for the drilling of the Sky Ranch 4-65 9-10 1H Well (API No. to be determined) and one additional well (“Wells”) and to subject any nonconsenting interests to the cost recovery provisions of C.R.S. §34-60-116(7):
Township 4 South, Range 65 West, 6th P.M.
Section 9: All
Section 10: All
7. 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.
8. 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.
9. Testimony and exhibits submitted in support of the Application further showed that certain royalty owners have not agreed to participate in the Well. Applicant contacted each of these royalty owners, or has made diligent efforts to do so, to obtain their consent to participate in the spacing unit for purposes of royalty payments. Despite diligent efforts, Applicant has not been able to contact some of these individuals, or has received no response from them. Applicant confirms that the cost recovery provisions shall not apply to these leased mineral interests owners.
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 1280-acre drilling and spacing unit established for Sections 13 and 14, Township 4 South, Range 65 West, 6th P.M., for the Sky Ranch 4-65 9-10 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 1280-acre drilling and spacing unit established for the below-described lands, are hereby pooled, for the development and operation of the Niobrara Formation:
Township 4 South, Range 65 West, 6th P.M.
Section 9: All
Section 10: 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. 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 11th day of April, 2014, as of March 17, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary