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-2209
ORDER NO. 535-608 |
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 an approximate 640-acre drilling and spacing unit established by Order No. 535-2 for Section 27, Township 11 North, Range 67 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 22 and 27, Township 11 North, Range 67 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. Cirque Resources LP (“Cirque” 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 11 North, Range 67 West, 6th P.M is are subject to this Rule for the Codell Formation.
5. On August 12, 2010, the Commission entered Order No. 535-2 which established 145 approximate 640-acre drilling and spacing units for certain lands, including Section 28, Township 11 North, Range 67 West, 6th P.M., and approved one horizontal well within each unit for the Codell Formation and one horizontal well within each unit for the Niobrara Formation, with the permitted wells located no closer than 600 feet from the unit boundaries, and no closer than 1200 feet from the productive interval of the first well located in the unit.
6. On October 16, 2014, Cirque, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-2 for Section 27, Township 11 North, Range 67 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 the wellbore to be located no closer than 300 feet from the unit boundaries, and no closer than 660 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:
Township 11 North, Range 67 West, 6th P.M.
Section 22: All
Section 27: All
7. On November 24, 2014, Cirque, 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 William Givan, Regional Land Manager for Cirque, showed that Cirque 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 Robert Sterling, Senior Geologist for Cirque, showed that the Codell Formation is present throughout the Application Lands, is approximately 18 to 19 feet thick, and is generally of uniform thickness throughout the Application Lands.
10. Engineering testimony and exhibits submitted in support of the Application by Barry Voigt, Reservoir Engineer for Cirque, showed that the drainage area for analog horizontal Codell Formation wells are estimated at 250 acres, and an appropriate 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.
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. Cirque 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 an approximate 640-acre drilling and spacing unit established by Order No. 535-2 for Section 27, Township 11 North, Range 67 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 22 and 27, Township 11 North, Range 67 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. An approximate 640-acre drilling and spacing unit established by Order No. 535-2 for Section 27, Township 11 North, Range 67 West, 6th P.M., is hereby vacated, for the production of oil, gas and associated hydrocarbons from the Codell Formation.
2. One 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 11 North, Range 67 West, 6th P.M.
Section 22: All
Section 27: All
3. The productive interval of the wellbore will be located no closer than 300 feet from the unit boundaries, and no closer than 660 feet from the productive interval of any other wellbore located in the unit, 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