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 AND CODELL FORMATIONS, UNNAMED FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1410-AW-24
ORDER NO. 535-553 |
REPORT OF THE COMMISSION
The Commission heard this matter on October 27, 2014 at the Durango Public Library, 1900 E. 3rd Avenue, Durango, CO 81301, upon application for an order to: 1) amend Order Nos. 535-314, 535-471, 535-482, and 535-504 as they apply to the Application Lands to include the Codell Formation; and 2) approve up to 32 horizontal wells within each approximate 960-acre drilling and spacing units within Sections 6 through 9, 17 through 20, and 29 through 32, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
FINDINGS
The Commission finds as follows:
1. Whiting Oil and Gas Corporation (“Whiting” or “Applicant”) 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. The Application Lands are subject to this Rule 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 31 and 32, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
6. On March 5, 2012, the Commission entered Order No. 535-150 which established three approximate 960-acre drilling and spacing units and approved up to four horizontal wells within each unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 20 and 29, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
7. On July 9, 2012, the Commission entered Order No. 535-178 which vacated the drilling and spacing units established by Order No. 535-3 in Sections 26 through 28 and Sections 31 through 35, Township 10 North, Range 58 West, 6th P.M., and established eight approximate 960-acre drilling and spacing units and approved up to four horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 29, 30, 31, and 32, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
8. On July 9, 2012, the Commission entered Order No. 535-179 which established six approximate 960-acre drilling and spacing units and authorized up to four horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 19 and 30, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
9. On October 1, 2012, the Commission entered Order No. 535-204 which established six approximate 960-acre drilling and spacing units with up to four horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 7, 8, 17 and 18, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
10. On March 25, 2013, the Commission entered Order No. 535-296 which approved up to eight horizontal wells in 21 approximate 640 to 960-acre drilling and spacing units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 20, 29, 30, 31, and 32, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
11. On May 6, 2013, the Commission entered Order No. 535-314 which approved up to 16 horizontal wells in 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 20, 29, 30, 31, and 32, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
12. On April 28, 2014, the Commission entered Order No. 535-471 which approved up to 16 horizontal wells within five approximate 960-acre drilling and spacing units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 7, 8, 17, 18, 19, and 30, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
13. On April 28, 2014, the Commission entered Order No. 535-482 which established two approximate 960-acre drilling and spacing units and approved up to 16 horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 4, 5, 8 and 9, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
14. On July 28, 2014, the Commission entered Order No. 535-504 which established an approximate 960-acre drilling and spacing unit and approved up to 16 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 6 and 7, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.
15. On August 28, 2014, Whiting, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: 1) amend Order Nos. 535-314, 535-471, 535-482, and 535-504 to include the Codell Formation; and 2) approve up to 32 horizontal wells within each approximate 960-acre drilling and spacing units for the below-described lands (“Application Lands”), with the productive interval of the horizontal wellbore to be no closer than 100 feet from the productive interval of any other wellbore producing from the Codell and Niobrara 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, 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:
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Township 10 North, Range 58
West, 6th P.M. Township 10 North, Range 58
West, 6th P.M. Township 10 North, Range 58
West, 6th P.M. Township 10 North, Range 58
West, 6th P.M.
Township 10 North, Range 58 West, 6th P.M. Section 8: S½ Section 17: All
Township 10 North, Range 58
West, 6th P.M. Township 10 North, Range 58
West, 6th P.M. Township 10 North, Range 58
West, 6th P.M. Township 10 North, Range 58
West, 6th P.M. |
Applicant also requested that all proposed wells be drilled from no more than eight well pads within the unit.
16. On October 16, 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.
17. On or about October 16, 2014, the Bureau of Land Management (“BLM”) and Whiting reached an agreement that if the BLM has not previously approved a Communitization Agreement (“CA”) on the Application Lands, Whiting shall submit a CA to BLM within 90 days of the spud of the first well, or within 60 days of the date of this Order is there is an existing well completed in the spaced formation, whichever applies first, in any drilling and spacing unit that contains Federal minerals managed by BLM.
18. Land testimony and exhibits submitted in support of the Application by Scott McDaniel, Regional Land Manager for Whiting, showed that Whiting holds oil and gas leasehold interests and has a right to drill in the Application Lands.
19. Geologic testimony and exhibits submitted in support of the Application by Mark K. Odegard, Staff Geologist for Whiting, showed that the Niobrara and Codell Formations are underlying the Application Lands. Further testimony included an analysis of the Codell and 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 the Fort Hayes and Codell Formations are a common source of supply.
20. Engineering testimony and exhibits submitted in support of the Application by Donald F. Koenig, Senior Reservoir Engineer for Whiting, showed that the drainage area for analog horizontal Niobrara and Codell Formations wells are estimated at 115 acres with a corresponding drainage width of 642 ft., economic analysis support horizontal wellbore density of up to 32 wells within the unit., and an approximate 960-acre drilling and spacing unit are therefore not less than the maximum area than can be efficiently, economically and effectively drained by a horizontal well producing oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.
21. 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.
22. Whiting agreed to be bound by oral order of the Commission.
23. 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) amend Order Nos. 535-314, 535-471, 535-482, and 535-504 as they apply to the Application Lands to include the Codell Formation; and 2) approve up to 32 horizontal wells within each approximate 960-acre drilling and spacing units within Sections 6 through 9, 17 through 20, and 29 through 32, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
ORDER
IT IS HEREBY ORDERED:
1. Order Nos. 535-314, 535-471, 535-482, and 535-504 are hereby amended to include the Codell Formation, as they apply to the below-described lands.
2. A total of up to 32 horizontal wells within the approximate 960-acre drilling and spacing unit established for the below described-lands, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations, with the productive interval of the wellbore will be located no closer than 100 feet from the unit boundaries, and no closer than 100 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:
Township 10
North, Range 58 West, 6th P.M.
Section 6: All
Section 7: N½
Township 10
North, Range 58 West, 6th P.M.
Section 5: All
Section 8: N½
Township 10
North, Range 58 West, 6th P.M.
Section 4: All
Section 9: N½
Township 10
North, Range 58 West, 6th P.M.
Section 7: S½
Section 18: All
Township 10 North, Range 58 West, 6th P.M.
Section 8: S½
Section 17: All
Township 10
North, Range 58 West, 6th P.M.
Section 19: All
Section 30: N½
Township 10
North, Range 58 West, 6th P.M.
Section 20: All
Section 29: N½
Township 10
North, Range 58 West, 6th P.M.
Section 30: S½
Section 31: All
Township 10
North, Range 58 West, 6th P.M.
Section 29: S½
Section 32: All
3. The productive interval of the wellbore shall be no closer than 100 feet from the productive interval of any other wellbore producing from the Codell and Niobrara 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, 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, without exception being granted by the Director.
4. The proposed wells shall be drilled from no more than eight well pads within the unit.
5. If the BLM has not previously approved a CA on the Application Lands, Whiting shall submit a CA to BLM within 90 days of the spud of the first well, or within 60 days of the date of this Order is there is an existing well completed in the spaced formation, whichever applies first, in any drilling and spacing unit that contains Federal minerals managed by BLM.
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 18th day of November, 2014, as of October 27, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Robert J. Frick, Secretary