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-SP-2138
ORDER NO. 535-555 |
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) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-42 for Section 17, Township 9 North, Range 57 West, 6th P.M.; and 2) establish an approximate 960-acre drilling and spacing unit for Sections 8 and 17, Township 9 North, Range 57 West, 6th P.M., and approve up to 32 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell 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. Sections 8 and 17, Township 9 North, Range 57 West, 6th P.M. are subject to Rule 318.a. for the Codell 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 8 and 17, Township 9 North, Range 57 West, 6th P.M. are subject to this Order for the Niobrara Formation.
6. On April 28, 2014, the Commission entered Order No. 535-481 which vacated two approximate 640-acre drilling and spacing units established by Order No. 535-42, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 8, Township 9 North, Range 57 West, 6th P.M. is subject to this Order for the Niobrara Formation.
7. On August 28, 2014, Whiting, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-42 for Section 17, Township 9 North, Range 57 West, 6th P.M.; and 2) establish an approximate 960-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to 32 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations, with the productive interval of the wellbore to 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, 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:
Township 9
North, Range 57 West, 6th P.M.
Section 8: S½
Section 17: All
Applicant also requested that all proposed wells be drilled from no more than eight well pads within the unit.
8. On October 14, 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.
9. On October 15 2014, the Bureau of Land Management (“BLM”) and Whiting reached an agreement wherein, 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. The Application Lands contain Federal minerals managed by the BLM.
10. Land testimony and exhibits submitted in support of the Application by Scott McDaniel, Regional Land Manger for Whiting, showed that Whiting holds oil and gas leasehold interests and has a right to drill in the Application Lands.
11. Geologic testimony and exhibits submitted in support of the Application by Mark K. Odegard, Senior Geologist for Whiting, showed that the Niobrara and Codell Formations is present throughout the Application Lands, is approximately 325 feet thick, and is generally of uniform thickness throughout the Application Lands. The testimony further showed that there are four separate producing zones in the Niobrara and Codell formations.
12. 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 analogous horizontal Niobrara and Codell Formations wells are estimated at 115 acres, and 960-acre drilling and spacing unit are therefore not less than the maximum area in each of the four zones than can be efficiently, economically and effectively drained by a horizontal well producing oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.
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 order to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-42 for Section 17, Township 9 North, Range 57 West, 6th P.M.; and 2) establish an approximate 960-acre drilling and spacing unit for the Application Lands, and approve up to 32 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit established by Order No. 535-42 for Section 17, Township 9 North, Range 57 West, 6th P.M. is hereby vacated
2. An approximate 960-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 32 horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:
Township 9
North, Range 57 West, 6th P.M.
Section 8: S½
Section 17: 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