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 CODELL FORMATION, UNNAMED FIELD, WELD COUNTY, COLORADO

)

)

)

)

)

CAUSE NO. 535

 

DOCKET NO. 1410-SP-2163

 

ORDER NO. 535-570

 

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 establish an approximate 1349-acre drilling and spacing unit for Section 13, 24, and 25, Township 12 North, Range 65 West, 6th P.M., and approve one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Anadarko E&P Onshore LLC (“Anadarko” 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. Section 13, 24, and 25, Township 12 North, Range 65 West, 6th P.M. are subject to Rule 318.a. for the Codell Formation.

 

5.         On August 28, 2014, Anadarko, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to establish an approximate 1349-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to one horizontal well within the unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation, 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 12 North, Range 65 West, 6th P.M.
Section 13:      Lots 1 through 4 (approximately 68.78 acres),                                               being that portion lying within the state of Colorado
Section 24:      All
Section 25:      All

 

Applicant also requested that all proposed wells be drilled from the surface of the drilling unit.

 

6.         On October 10, 2014, Anadarko, 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.         On October 20, 2014, the Bureau of Land Management (“BLM”) and Anadarko reached an agreement that the drilling and spacing unit contains federal leased and/or unleased minerals.   As such, Anadarko agrees to submit a Communitization Agreement (“CA”) to the BLM for any existing wells within 60 days of the entry of this order.  Anadarko also agrees to submit a CA to the BLM within 90 days from the date of first production (as defined in the Commission Rules) from the initial well drilled within the drilling and spacing unit.

 

8.         Land testimony and exhibits submitted in support of the Application by Jason Rayburn, Landman for Anadarko, showed that Anadarko holds oil and gas leasehold interests and has a right to drill in the Application Lands.            

 

9.         Geologic testimony and exhibits submitted in support of the Application by Thomas A. Berkman, Senior Project Geologist for Anadarko, showed that the Codell Formation underlies the entirety of the Application Lands and ranges from approximately 16 to 20 feet thick.  Further testimony showed the Codell Formation is a sandstone consisting of a very fine-grained laminated sandstone, interbedded with bioturbated sands and silts which were deposited in a marine setting during the Cretaceous Western Interior Seaway.

 

10.       Engineering testimony and exhibits submitted in support of the Application by Emily Boecking, Reservoir Engineer for Anadarko, showed that the drainage area for analog horizontal Codell Formation wells are estimated at 90 to 259 acres, and an approximate 1349-acre drilling and spacing unit is 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 Codell Formation.

 

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.       Anadarko 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 establish an approximate 1349-acre drilling and spacing unit for Section 13, 24 and 25, Township 12 North, Range 65 West, 6th P.M. and to approve one horizontal well within the unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation.

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 1349-acre 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 Codell Formation:

 

Township 12 North, Range 65 West, 6th P.M.
Section 13:      Lots 1 through 4 (approximately 68.78 acres),                                               being that portion lying within the state of Colorado
Section 24:      All
Section 25:      All

 

2.         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.

 

3.         Anadarko agrees to submit a Communitization Agreement (“CA”) to the BLM for any existing wells within 60 days of the entry of this order.  Anadarko also agrees to submit a CA to the BLM within 90 days from the date of first production (as defined in the Commission Rules) from the initial well drilled within the drilling and spacing unit.

 

 

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