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 CODELL AND NIOBRARA FORMATIONS, UNNAMED FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1412-SP-2174 ORDER NO. 535-589 |
REPORT OF THE COMMISSION
The Commission heard this matter on December 15, 2014 at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, CO, upon application for an order to: 1) establish an approximate 640-acre drilling and spacing unit for Section 22, Township 9 North, Range 58 West, 6th P.M., and approve up to seven horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation; and 2) approve an additional six wells, for a total of up to seven horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for the Application Lands, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Noble Energy, Inc. (Operator No. 100322) (“Noble” 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 22, Township 9 North, Range 58 West, 6th P.M. is 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. The Order further stated that the surface location for any permitted well would be located anywhere within the unit with the bottomhole location to be no closer than 600 feet from the unit boundary.
6. On October 16, 2014, Noble, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: 1) establish an approximate 640-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to seven horizontal wells 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 300 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director, and 2) approve an additional six horizontal wells, for a total of up to seven horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for the Application Lands, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of the wellbore to be located no closer than 300 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:
Township 9 North, Range 58 West, 6th P.M.
Section 22: All
7. On November 24, 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.
8. Land testimony and exhibits submitted in support of the Application by Julie Jenkins, Land Manager for Noble, showed that Noble 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 Mark Nicholson, Geologist for Noble, showed that the Codell Formation is present throughout the Application Lands, is approximately 8 to 10 feet thick, and is generally of uniform thickness throughout the Application Lands. The Niobrara Formation is also present throughout the Application Lands and is approximately 250 feet thick and of uniform thickness throughout the Application Lands.
10. Engineering testimony and exhibits submitted in support of the Application by Jenette Hilton, Senior Production Engineer for Noble, showed that the drainage area for analog horizontal Niobrara Formations wells is estimated at 92 to 202 acres, and the drainage area for analog horizontal Codell Formation wells is estimated at 46 to 534-acres, with an average of 177 acres. An appropriate 640-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 and Niobrara Formations.
11. Applicant further requested that the Commission take administrative notice of the Rule 511 testimony submitted in Order Nos. 535-3 and 535-218 as further grounds for approval of establishing well densities per approximate 640-acre drilling and spacing unit for the Niobrara Formation and Order No 535- 174 as further grounds for approval of increased density for the Codell Formation in the vicinity of the Application Lands.
12. 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.
13. Noble agreed to be bound by oral order of the Commission.
14. 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) establish an approximate 640-acre drilling and spacing unit for Section 22, Township 9 North, Range 58 West, 6th P.M., and approve up to seven horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation, 2) approve an additional six wells, for a total of up to seven horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for the Application Lands, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to seven horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation:
Township 9 North, Range 58 West, 6th P.M.
Section 22: All
2. The productive interval of the wellbore will be located no closer than 300 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director.
3. An additional six horizontal wells, for a total of up to seven horizontal wells, within an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for the below-described lands, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.,
Township 9 North, Range 58 West, 6th P.M.
Section 22: All
4. The productive interval of the wellbore to be located no closer than 300 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director.
5. The proposed wells shall be located on no more than four well pads within the drilling and spacing unit, without exception granted by the Director.
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 7th day of January, 2015, as of December 15, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Jill Dorancy, Acting Secretary