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, ADAMS COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1407-SP-2085 ORDER NO. 535-512 |
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: 1) vacate two approximate 640-acre drilling and spacing units established by Order No. 535-89 for Sections 16 and 17, Township 3 South, Range 65 West, 6th P.M.; and 2) establish an approximate 1280-acre exploratory drilling and spacing unit for Sections 16 and 17, Township 3 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 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 October 31, 2011, the Commission entered Order No. 535-89 which established 18 approximate 640-acre drilling and spacing units and approved up to two horizontal wells in each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 16 and 17, Township 3 South, Range 65 West, 6th P.M. are subject to this Order for the Niobrara Formation.
5. On May 29, 2014, ConocoPhillips, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: 1) vacate two approximate 640-acre drilling and spacing units established by Order No. 535-89 for Sections 16 and 17, Township 3 South, Range 65 West, 6th P.M.; and 2) 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 related hydrocarbons of 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 3 South, Range 65 West, 6th P.M.
Section 16: All
Section 17: All
Applicant stated that all proposed wells shall be located on no more than two well pads within the drilling and spacing unit.
6. On July 15, 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.
7. Land testimony and exhibits submitted in support of the Application by Kelsey L. Swinford, Staff Landman, Rockies Business Unit, Niobrara Land, for ConocoPhillips, showed that both the surface and the mineral interest in the Application Lands is owned in fee, and that ConocoPhillips owns a partial undivided leasehold ownership interest in the Application Lands.
8. Geologic Testimony and exhibits submitted in support of the Application by Christian Marine Lahsberg, Staff Geophysicist for ConocoPhillips, showed the Niobrara Formation is present throughout the Application Lands, is approximately 329 feet thick, and is generally of uniform thickness throughout the Application Lands.
9. Engineering Testimony and exhibits submitted in support of the Application by Clint Hutchinson, Lead Reservoir Engineer for ConocoPhillips, demonstrated that the drainage area of a horizontal well in the Niobrara formation of the Application Lands having a wellbore lateral of greater than 6,000 feet in length is estimated to be no greater than 407.3 acres, that a horizontal well with a greater than 6,000 foot lateral producing from the Niobrara formation meets ConocoPhillips’ economic requirements for exploration wells, that the proposed 1280 acre drilling and spacing unit, with the requested setbacks, for a horizontal well in the Niobrara formation in the Application Lands, and authorization for an optional second such well in each unit, will promote efficient drainage, protect correlative rights, and prevent waste.
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 received no protests, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to: 1) vacate two approximate 640-acre drilling and spacing units established by Order No. 535-89 for Sections 16 and 17, Township 3 South, Range 65 West, 6th P.M.; and 2) establish an approximate 1280-acre exploratory drilling and spacing unit for Sections 16 and 17, Township 3 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 of the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. Two approximate 640-acre drilling and spacing units established by Order No. 535-89 for Sections 16 and 17, Township 3 South, Range 65 West, 6th P.M., are hereby vacated.
2. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of 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 will 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 3 South, Range 65 West, 6th P.M.
Section 16: All
Section 17: All
3. All proposed wells shall be located on no more than two well pads 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 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