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. 150300131
ORDER NO. 535-646 |
REPORT OF THE COMMISSION
The Commission heard this matter on March 2, 2015 at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 25, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; 2) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-180 for Section 24, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; 3) vacate Order No. 535-296; 4) vacate Order No. 535-314; 5) vacate Order No. 535-508; 6) establish an approximate 1280-acre drilling and spacing unit for the Application Lands, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, and approve up to 32 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
FINDINGS
The Commission finds as follows:
1. Whiting Oil and Gas Corporation (“Whiting” or “Applicant”), as applicant herein, 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 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. Section 25, Township 10 North, Range 58 West, 6th P.M. is subject to this Order for the Niobrara Formation.
5. On July 9, 2012, the Commission entered Order No. 535-180, which establish one approximate 640-acre drilling and spacing unit and approved up to four wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 24, Township 10 North, Range 58 West, 6th P.M. is subject to this Order for the Niobrara Formation.
6. On March 25, 2013, the Commission entered Order No. 535-296 which approved up to sixteen horizontal wells in various approximate 640 to 960-acre drilling and spacing units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, and modified previous Orders to include the Codell Formation. Section 24, Township 10 North, Range 58 West, 6th P.M. is subject to this Order for the Codell and Niobrara Formations.
7. On May 6, 2013, the Commission entered Order No. 535-314 which approved up to 16 horizontal wells in 21 approximate 640- to 960-acre drilling and spacing units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 24 and 25, Township 10 North, Range 58 West, 6th P.M. are subject to this Order for the Codell and Niobrara Formations.
8. On July 28, 2014, the Commission entered Order No. 535-508 which modified various Orders to include the Codell Formation, and approved up to 32 horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.
9. On December 22, 2014, Whiting, by its attorneys, filed with the Commission pursuant to Section 34-60-116, C.R.S., a verified application (“Application”) for an order to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 25, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; 2) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-180 for Section 24, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; 3) vacate Order No. 535-296 which approved up to eight horizontal wells within an approximate 640-acre drilling and spacing unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; 4) vacate Order No. 535-314 which approved up to 16 horizontal wells within two approximate 640-acre drilling and spacing units established for Sections 24 and 25, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; 5) vacate Order No. 535-508 which modified various Orders to include the Codell Formation and approved up to 32 horizontal wells within an approximate 640-acre drilling and spacing unit established for Section 24, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations; 6) establish an approximate 1280-acre drilling and spacing unit for the Application Lands, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations; and 7) approve up to 32 horizontal wells within the unit, with the productive interval of the horizontal wellbore to be no closer than 100 feet from the productive interval of any other wellbore producing from the Codell and Niobrara Formations, and no closer than 100 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 100 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 productive interval of the wellbore no closer than 100 feet from a unit boundary, then the productive interval of the wellbore shall be located no closer than 300 feet from the unit boundary, without exception being granted by the Director:
Township 10 North, Range 58 West, 6th P.M.
Section 24: All
Section 25: All
Applicant requested that the proposed wells be located on a common or existing wellpad or from no more than eight wellpads within the unit.
10. On February 9, 2015, Whiting, 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.
11. Land testimony and exhibits submitted in support of the Application by Scott McDaniel, Regional Land Manager for Whiting, showed that Whiting holds oil and gas leasehold interests and has a right to drill in the Application Lands.
12. Geologic testimony and exhibits submitted in support of the Application by Mark K. Odegard, Senior Geologist for Whiting, showed that the Codell and Niobrara Formations are present throughout the Application Lands, have a combined thickness of approximately 338 feet, and are generally of uniform thickness throughout the Application Lands.
13. Engineering testimony and exhibits submitted in support of the Application by Donald F. Koenig, Senior Reservoir Engineer for Whiting, showed that the drainage area for analog horizontal Niobrara and Codell Formations wells are estimated at 104 acres per well, 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 32 horizontal wells producing oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
14. 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. 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.
14. Whiting agreed to be bound by oral order of the Commission.
15. 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. 535-3 for Section 25, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; 2) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-180 for Section 24, Township 10 North, Range 58 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; 3) vacate Order No. 535-296; 4) vacate Order No. 535-314; 5) vacate Order No. 535-508; 6) establish an approximate 1280-acre drilling and spacing unit for the Application Lands, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, and approve up to 32 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 25, Township 10 North, Range 58 West, 6th P.M., is hereby vacated, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation;
2. An approximate 640-acre drilling and spacing unit established by Order No. 535-180 for Section 24, Township 10 North, Range 58 West, 6th P.M., is hereby vacated, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation;
3. Order No. 535-296 which approved up to eight horizontal wells within an approximate 640-acre drilling and spacing unit, is hereby vacated, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation;
4. Order No. 535-314 which approved up to 16 horizontal wells within two approximate 640-acre drilling and spacing units established for Sections 24 and 25, Township 10 North, Range 58 West, 6th P.M., is hereby vacated, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation;
5. Order No. 535-508 which modified various Orders to include the Codell Formation and approved up to 32 horizontal wells within an approximate 640-acre drilling and spacing unit established for Section 24, Township 10 North, Range 58 West, 6th P.M., is hereby vacated, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations
6. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 32 horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations:
Township 10 North, Range 58 West, 6th P.M.
Section 24: All
Section 25: All
7. The productive interval of the horizontal wellbore shall be no closer than 100 feet from the productive interval of any other wellbore producing from the Codell and Niobrara Formations, and no closer than 100 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 100 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 productive interval of the wellbore no closer than 100 feet from a unit boundary, then the productive interval of the wellbore shall be located no closer than 300 feet from the unit boundary, without exception being granted by the Director.
8. The proposed wells shall be located on a common or existing wellpad or from no more than eight wellpads within the 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 March, 2015, as of March 2, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Jill Dorancy, Acting Secretary