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 CODELL AND NIOBRARA FORMATIONS, UNNAMED FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1407-AW-17
ORDER NO. 535-505 |
REPORT OF THE COMMISSION
The Commission heard this matter on July 28, 2014, at the Weld County Administration Building - Events Center, 1150 “O” Street, Greeley, CO, upon application for an order to modify Order No. 535-314 as it applies to Sections 27 and 34, Township 10 North, Range 58 West, 6th P.M. to include the Codell Formation, and approve an additional 16 horizontal wells, for a total of up to 32 horizontal wells, within an approximate 960-acre drilling and spacing unit established by Order No. 535-178 for Sections 27 and 34, Township 10 North, Range 58 West, 6th P.M. for the production of oil, gas, and associated hydrocarbons of the Codell and Niobrara Formations.
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, on unspaced lands, 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 27 and 34, Township 10 North, Range 58 West, 6th P.M. are subject to Rule 318.a. for the Codell Formation.
5. On February 22, 2011, the Commission entered Order No. 535-3 which 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 27 and 34, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
6. On July 9, 2012, the Commission entered Order No. 535-178 which established eight approximate 960-acre drilling and spacing units and approved four horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 27 and 34, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
7. On March 25, 2013, the Commission entered Order No. 535-296, which established 21 approximate 640 to 960-acre drilling and spacing units and approving up to a total of eight horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 27 and 34, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
8. On May 6, 2013, the Commission entered Order No. 535-314, which approved up to a total of 16 horizontal wells within each of 21 approximate 640 to 960-acre drilling and spacing units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 27 and 34, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
9. On May 29, 2014, Whiting, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S. for an order to modify Order No. 535-314 as it applies to Sections 27 and 34, Township 10 North, Range 58 West, 6th P.M. to include the Codell Formation, approve an additional 16 horizontal wells, for a total of up to 32 horizontal wells within an approximate 960-acre drilling and spacing unit established by Order No. 535-178 for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of the wellbore to be located no closer than 100 feet from the productive interval of any other wellbore producing from the Niobrara and/or Codell Formations, 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 treated interval of the wellbore no closer than 100 feet from a unit boundary. 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, without exception being granted by the Director:
Township 10 North, Range 58 West, 6th P.M.
Section 27: S½
Section 34: All
Applicant also requests that the proposed wells be located on a common or existing well pad within the unit or from no more than eight well pads within the unit.
10. On July 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.
11. Land testimony and exhibits submitted in support of the Application by Scott McDaniel, Regional Land Manager for Whiting, showed that Whiting owns a substantial leasehold interest and is an owner with the right to drill wells in the Application Lands.
12. Geologic testimony and exhibits submitted in support of the Application by Mark K. Odegard, Senior Geologist for Whiting, showed the Niobrara and Codell Formations are present, uniform, and are a common source of supply throughout the Application Lands. Testimony further showed that the Niobrara Formation has an average thickness of 325 feet across the Application Lands.
13. Engineering testimony and exhibits submitted in support of the Application by Donald F. Koenig, Senior Reservoir Engineer for Whiting, showed that the estimated drainage area for Niobrara Formation horizontal wells is 115 acres. Testimony concluded the drilling, completion, and production of horizontal Niobrara and Codell wells requested in the Application for the Application Lands, will increase recovery from the reservoir and thereby prevent waste, will protect correlative rights, and can be done economically and efficiently.
14. 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.
15. Whiting agreed to be bound by oral order of the Commission.
16. 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 modify Order No. 535-314 as it applies to Sections 27 and 34, Township 10 North, Range 58 West, 6th P.M. to include the Codell Formation, and approve an additional 16 horizontal wells, for a total of up to 32 horizontal wells, within an approximate 960-acre drilling and spacing unit established by Order No. 535-178 in the Application Lands, for the production of oil, gas, and associated hydrocarbons of the Codell and Niobrara Formations.
ORDER
IT IS HEREBY ORDERED:
1. Order No. 535-314 as it applies to Sections 27 and 34, Township 10 North, Range 58 West, 6th P.M., is hereby modified to include the Codell Formation.
2. An additional 16 horizontal wells, for a total of up to 32 horizontal wells, within an approximate 960-acre drilling and spacing unit established by Order No. 535-178 for the below-described lands, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations:
Township 10 North, Range 58 West, 6th P.M.
Section 27: S½
Section 34: All
3. The productive interval of the wellbores shall be located no closer than 100 feet from any other wellbore producing from the Niobrara and/or Codell Formations, 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. 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, without exception being granted by the Director.
4. The proposed wells shall be located on a common or existing well pad within the unit or from no more than eight well pads within the 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 13th day of August, 2014, as of July 28, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert J. Frick, Secretary