BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS FOR THE CRETACEOUS FORMATIONS, UNNAMED FIELD, WELD   COUNTY, COLORADO

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CAUSE NO. 535

 

DOCKET NO. 1407-SP-2098

 

ORDER NO. 535-521

 

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 an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 19, Township 9 North, Range 60 West, 6th P.M. for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and 2) establish an approximate 640-acre exploratory drilling and spacing unit for Section 19, Township 9 North, Range 60 West, 6th P.M., and approve one horizontal well within the unit, for the production of oil, gas and associated hydrocarbons from the Cretaceous Formations.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Noble Energy, Inc (“Noble” 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 February 22, 2011, Order No. 535-3 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. Section 19, Township 9 North, Range 60 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

5.         On July 29, 2013, Order No. 535-343 pooled all interests within an approximate 640-acre drilling and spacing unit for Section 19, Township 9 North, Range 60 West, 6th P.M. to accommodate the Lone Pine LB19-78HNX Well (API No. 05-123-36726), for the development and operation of the Niobrara Formation.

 

6.         On May 29, 2014, Noble, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 19, Township 9 North, Range 60 West, 6th P.M. for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and 2) establish an approximate 640-acre exploratory drilling and spacing unit for the below-described lands (“Application Lands”), and approve one horizontal well within the unit, for the production of oil, gas and associated hydrocarbons from the Greenhorn, Graneros, Niobrara, and Codell Formations (“collectively referred to as the “Cretaceous Formations”), with the productive interval of the wellbore to be located no closer than 600 feet from the unit boundaries, without exception being granted by the Director:

                       

                        Township 9 North, Range 60 West, 6th P.M.

                        Section 19:      All

                       

7.         On May 29, 2014, Noble filed a concurrent application (“Concurrent Application”), Docket No. 1407-UP-237, for an order to pool all interests in an approximate 640-acre drilling and spacing unit established for the Application Lands, for the development and operation of the Cretaceous Formations.

 

8.         On July 15, 2014, Noble, 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 Julie T. Jenkins, Land Manager for Noble, showed Noble Energy, Inc. and Noble Energy WyCo, Inc. together own a majority of the leasehold or unleased mineral interests in the Application Lands, and have the right to drill.

 

10.       Geologic Testimony and exhibits submitted in support of the Application by Mark Nicholson, Geologist for Noble, showed the structure of the Greenhorn, Graneros, Niobrara and Codell Formations underlying the Application Lands. Isopach maps showed that the Greenhorn  Formation is 285 feet thick; the Graneros Formation is 115 feet thick, the Niobrara Formation is 245 feet thick, and the Codell Formation is 12 feet under the Application Lands.

 

11.       Engineering Testimony and exhibits submitted in support of the Application by Jenette Hilton, Senior Production Engineer for Noble, showed the recovery factor of hydrocarbons under the Application Lands using a horizontal lateral would be approximately 2-30% per well, and by executing a horizontal lateral, additional reserves can be captured without the need for drilling individual vertical wells.

 

11.       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.

 

12.       Noble agreed to be bound by oral order of the Commission. 

 

13.       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 an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 19, Township 9 North, Range 60 West, 6th P.M. for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and 2) establish an approximate 640-acre exploratory drilling and spacing unit for Section 19, Township 9 North, Range 60 West, 6th P.M., and approve one horizontal well within the unit, for the production of oil, gas and associated hydrocarbons from the Cretaceous Formations.

 

 

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 19, Township 9 North, Range 60 West, 6th P.M. for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, is hereby vacated.

 

2.         An approximate 640-acre exploratory drilling and spacing unit for the below-described lands, is hereby established, and one horizontal well within the unit, is hereby approved, for the production of oil, gas and associated hydrocarbons from the Cretaceous Formations, with the productive interval of the wellbore will be located no closer than 600 feet from the unit boundaries, without exception being granted by the Director:

 

                        Township 9 North, Range 60 West, 6th P.M.

                        Section 19:      All

 

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 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 29th day of July, 2014, as of July 28, 2014. 

 

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary