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 FORMATION, UNNAMED FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1412-SP-2183 ORDER NO. 535-593 |
REPORT OF THE COMMISSION
The Commission heard this matter on December 15, 2014 at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, CO, upon application for an order to: 1) vacate two approximate 640-acre drilling and spacing units established by Order No. 535-2 for Sections 19 and 30, Township 10 North, Range 66 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Codell Formation; and 2) establish an approximate 1280-acre drilling and spacing unit for Sections 19 and 30, Township 10 North, Range 66 West, 6th P.M., and approve up to four horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation.
FINDINGS
The Commission finds as follows:
1. Extraction Oil & Gas, LLC (“Extraction” 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. On August 12, 2010, the Commission entered Order No. 535-2 which established 145 approximate 640-acre drilling and spacing units and approved one horizontal well within each unit, including Sections 19 and 30, Township 10 North, Range 66 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
5. On October 16, 2014, Extraction, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: 1) vacate two approximate 640-acre drilling and spacing units established by Order No. 535-2 for Sections 19 and 30, Township 10 North, Range 66 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Codell Formation; and 2) establish an approximate 1280-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to four horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation, with the productive interval of each wellbore to be no closer than 600 feet from the productive interval of any other wellbore producing from the Codell Formation, and no closer than 300 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 300 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 treated interval of the wellbore no closer than 300 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 10 North, Range 66 West, 6th P.M.
Section 19: All
Section 30: All
6. On November 24, 2014 (supplemented on December 5, 2014), Extraction, 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. Land testimony and exhibits submitted in support of the Application by Allyson Vistica, Land Manager for Extraction, showed that Extraction holds oil and gas leasehold interests and has a right to drill in the Application Lands.
8. Geologic testimony and exhibits submitted in support of the Application by Matt Volkmar, Petroleum Engineer for Extraction, showed that the Codell Formation is present throughout the Application Lands, is approximately 18 to 24 feet thick, and is generally of uniform thickness throughout the Application Lands.
9. Engineering testimony and exhibits submitted in support of the Application by John Tonello, Engineering Manager for Extraction, showed that the drainage area for analog horizontal Codell Formation wells are estimated at 319 acres, and an approximate 1280-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.
10. Applicant further requested that the Commission take administrative notice of the 511 testimony submitted in Order Nos. 535-542 and 535-546 as further grounds for approval of establishing well densities of four horizontal wells per approximate 1280-acre drilling and spacing unit for the Codell Formation in the vicinity of the Application Lands.
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. Extraction 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 two approximate 640-acre drilling and spacing units established by Order No. 535-2 for Sections 19 and 30, Township 10 North, Range 66 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Codell Formation; and 2) establish an approximate 1280-acre drilling and spacing unit for Sections 19 and 30, Township 10 North, Range 66 West, 6th P.M., and approve up to four horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell Formation.
ORDER
IT IS HEREBY ORDERED:
1. Two approximate 640-acre drilling and spacing units established by Order No. 535-2 for Sections 19 and 30, Township 10 North, Range 66 West, 6th P.M., are hereby vacated, for the production of oil, gas and associated hydrocarbons from the Codell Formation.
2. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to four horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation:
Township 10 North, Range 66 West, 6th P.M.
Section 19: All
Section 30: All
3. The productive interval of each wellbore shall be no closer than 600 feet from the productive interval of any other wellbore producing from the Codell Formation, and no closer than 300 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 300 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 treated interval of the wellbore no closer than 300 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.
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 8th day of January, 2015, as of December 15, 2014.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Jill Dorancy, Acting Secretary