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 FORMATION, UNNAMED FIELD, ARAPAHOE COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 1412-SP-2214
ORDER NO. 535-613 |
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 modify Order No. 535-97 only to allow for the lateral of a given horizontal well to enter the Niobrara Formation anywhere within an approximate 640-acre drilling and spacing unit for Section 8, Township 4 South, Range 64 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. ConocoPhillips Company (“ConocoPhillips” 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 October 31, 2011, the Commission entered Order No. 535-97 which established 25 approximate 640-acre drilling and spacing units and approved two horizontal wells in each unit, for production of oil, gas, and other hydrocarbons from the Niobrara Formation, and allowed for the lateral of a given horizontal well to enter the Niobrara Formation no closer than 300 feet from the section line, with the treated interval of the permitted wellbore to be located no closer than 460 feet from the boundary of the unit and no closer than 920 feet from the treated interval of any other well in the unit producing from the Niobrara, without exception being granted by the Director. Section 8, Township 4 South, Range 64 West, 6th P.M. is subject to this Rule for the Niobrara Formation.
5. On October 16, 2014, ConocoPhillips, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116 C.R.S. for an order to modify Order No. 535-97 only to allow for the lateral of a given horizontal well to enter the Niobrara Formation anywhere within an approximate 640-acre drilling and spacing unit for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, without exception being granted by the Director:
Township 4 South, Range 64 West, 6th P.M.
Section 8: All
6. On October 16, 2014, Applicant filed a concurrent application (Docket No. 1412-UP-324) to pool all interests in an approximate 640-acre drilling and spacing unit established for the Application Lands, for the development and operation of the Niobrara Formation
7. On November 24, 2014, ConocoPhillips, 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 Samuel Hamidi, Landman – Rockies Business Unit, Niobrara Land, for ConocoPhillips, showed that ConocoPhillips 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 Kristie Ramlal, Geologist for ConocoPhillips, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 315 feet thick, and is generally of uniform thickness throughout the Application Lands, with minimal local depositional variations in thickness.
9. Engineering testimony and exhibits submitted in support of the Application by Clint Hutchinson, Lead Reservoir Engineer for ConocoPhillips, showed that the drainage area for an individual analog horizontal Niobrara Formation well is estimated at 301.2 acres, with a second well the total drainage area is estimated to be not greater than 602.3. 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 Niobrara Formation.
10. 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.
11. ConocoPhillips agreed to be bound by oral order of the Commission.
12. 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 modify Order No. 535-97 only to allow for the lateral of a given horizontal well to enter the Niobrara Formation anywhere within an approximate 640-acre drilling and spacing unit for Section 8, Township 4 South, Range 64 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. Order No. 535-97 is hereby modified to allow for the lateral of a given horizontal well to enter the Niobrara Formation anywhere within the approximate 640-acre drilling and spacing unit for the below-described lands, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 4 South, Range 64 West, 6th P.M.
Section 8: All
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