BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE NIOBRARA FORMATION, UNNAMED FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1404-SP-2050
ORDER NO. 535-481 |
REPORT OF THE COMMISSION
The Commission heard this matter on April 28, 2014, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to vacate three approximate 640-acre drilling and spacing units established by Order No. 535-42 for Sections 7, 8 and 17, Township 9 North, Range 57 West, 6th P.M.; establish five approximate 960-acre drilling and spacing units for Sections 4 through 9, 16 and 17, Township 9 North, Range 57 West, 6th P.M., and approve up to 16 horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons form the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Whiting Oil and Gas Corporation (“Whiting” 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. Sections 4, 5, 6, 9, and 16, Township 9 North, Range 57 West, 6th P.M. are subject to Rule 318.a. for the Niobrara Formation.
5. On June 27, 2011, the Commission entered Order No. 535-42 which established eight 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 7, 8, and 17, Township 9 North, Range 57 West, 6th P.M. are subject to this Order.
6. On February 27, 2014, Whiting, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to vacate three approximate 640-acre drilling and spacing units established by Order No. 535-42 for Sections 7, 8 and 17, Township 9 North, Range 57 West, 6th P.M.; establish five approximate 960-acre drilling and spacing units for the below-described lands (“Application Lands”), and approve up to 16 horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons form the Niobrara Formation, with the productive interval of the horizontal wellbore to be no closer than 200 feet from the productive interval of any other wellbore producing from the Niobrara Formation, and no closer than 100 feet from a unit boundary unless such boundary abuts or corners lands for which the Commission has not at the time of the drilling permit application granted the right to locate the productive interval of the wellbore no closer than 100 feet from a unit boundary, without exception being granted by the Director. If the Commission has not at the time of the drilling permit application granted to owners of adjacent or cornering lands the right to locate the productive interval of the wellbore no closer than 100 feet from a unit boundary, then the productive interval of the wellbore shall be located no closer than the distance permitted in the adjacent or cornering lands.
Township 9 North, Range 57 West, 6th P.M.
Section 4: ALL (Lots 1-4, S½ N½, S½)
Section 9: N½ (DSU #1)
Township 9 North, Range 57 West, 6th P.M.
Section 5: ALL (Lots 1-4, S½ N½, S½)
Section 8: N½ (DSU #2)
Township 9 North, Range 57 West, 6th P.M.
Section 6: ALL (Lots 1-7, S½ NE¼, SE¼ NW¼, E½ SW¼, SE¼)
Section 7: N ½ (Lots 1, 2, E½ NW¼, NE¼) (DSU #3)
Township 9 North, Range 57 West, 6th P.M.
Section 8: S½
Section 17: All (DSU #4)
Township 9 North, Range 57 West, 6th P.M.
Section 9: S½
Section 16: All (DSU #5)
7. On April 15, 2014, Whiting, 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. On April 22, 2014, the Bureau of Land Management (”BLM”) filed a Protest to the Applicaton. BLM conditionally agreed to withdraw the protest upon confirmation of the withdrawal of DSU #4 from the Application Lands.
9. On April 23, 2014, Whiting withdrew DSU #4 from the Application Lands. By withdrawing DSU #4, Whiting further requested not to vacate Order No. 535-42 insofar as it pertains to Section 17:
Township 9 North, Range 57 West, 6th P.M.
Section 8: S½
Section 17: All (DSU #4)
10. Land testimony and exhibits submitted in support of the Application by Scott McDaniel, Regional Land Manager for Whiting, showed that Whiting owns significant leasehold interests in the Application Lands, and that all of the unleased mineral interest owners and mineral lessees within the Application Lands and lands which are contiguous to or corner the Application Lands received notice of this Application.
11. Geologic testimony and exhibits submitted in support of the Application by Mark K. Odegard, Staff Geologist for Whiting, included an analysis of the Niobrara Formation structure; an isopach map showing the gross thickness of the Niobrara Formation across the Application Lands; and a type cross section of several wells in the vicinity of the Application Lands showing the vertical distribution of the A, B and C chalk benches within the Niobrara Formation and that the Niobrara Formation is ubiquitous across the Application Lands, sharing a common source of supply.
12. Engineering testimony and exhibits submitted in support of the Application by Donald F. Koenig, Senior Reservoir Engineer for Whiting, included volumetric and economic analysis supporting horizontal wellbore density of up to 16 wells within the unit. Estimated ultimate recovery (“EUR”) was estimated at 297 MBO of oil and 392 MMCF of gas per well. Further testimony concluded the economics of the project are sound.
13. 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.
14. Whiting agreed to be bound by oral order of the Commission.
15. 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 for an order to vacate two approximate 640-acre drilling and spacing units established by Order No. 535-42 for Sections 7 and 8, Township 9 North, Range 57 West, 6th P.M.; establish four approximate 960-acre drilling and spacing units for Sections 4 through 7, 9 and 16, Township 9 North, Range 57 West, 6th P.M., and approve up to 16 horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons form the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. Two approximate 640-acre drilling and spacing units established by Order No. 535-42 for Sections 7 and 8, Township 9 North, Range 57 West, 6th P.M., are hereby vacated.
2. Four approximate 960-acre drilling and spacing units for the below-described lands, are hereby established, and up to 16 horizontal wells within each unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of the horizontal wellbore to be no closer than 200 feet from the productive interval of any other wellbore producing from the Niobrara Formation, and no closer than 100 feet from a unit boundary unless such boundary abuts or corners lands for which the Commission has not at the time of the drilling permit application granted the right to locate the productive interval of the wellbore no closer than 100 feet from a unit boundary, without exception being granted by the Director. If the Commission has not at the time of the drilling permit application granted to owners of adjacent or cornering lands the right to locate the productive interval of the wellbore no closer than 100 feet from a unit boundary, then the productive interval of the wellbore shall be located no closer than the distance permitted in the adjacent or cornering lands:
Township 9 North, Range 57 West, 6th P.M.
Section 4: ALL (Lots 1-4, S½ N½, S½)
Section 9: N½ (DSU #1)
Township 9 North, Range 57 West, 6th P.M.
Section 5: ALL (Lots 1-4, S½ N½, S½)
Section 8: N½ (DSU #2)
Township 9 North, Range 57 West, 6th P.M.
Section 6: ALL (Lots 1-7, S½ NE¼, SE¼ NW¼, E½ SW¼, SE¼)
Section 7: N ½ (Lots 1, 2, E½ NW¼, NE¼) (DSU #3)
Township 9 North, Range 57 West, 6th P.M.
Section 9: S½
Section 16: All (DSU #5)
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 23rd day of May, 2014, as of April 28, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary