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. 150300118
ORDER NO. 535-649 |
REPORT OF THE COMMISSION
The Commission heard this matter on April 13, 2015 at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to: 1) vacate two approximate 640-acre drilling and spacing units established by Order Nos. 535-42 and 535-73 for Sections 20 and 21, Township 9 North, Range 57 West, 6th P.M.; 2) establish an approximate 720-acre drilling and spacing unit for Sections 20 and 21, Township 9 North, Range 57 West, 6th P.M., and 3) approve a total of 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 (Operator No. 96155) (“Whiting” 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. Sections 20 and 21, Township 9 North, Range 57 West, 6th P.M., are subject to this Rule for the Codell and Niobrara Formations.
5. On June 27, 2011, the Commission entered Order No. 535-42 which established eight 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 20 Township 9 North, Range 57 West, 6th P.M., is subject to this Order for the Niobrara Formation.
6. On September 19, 2011, the Commission entered Order No. 535-73 which established four approximate 640-acre drilling and spacing units and authorized one well within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Section 21, Township 9 North, Range 57 West, 6th P.M. is subject to this Order for the Niobrara Formation.
7. 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 two approximate 640-acre drilling and spacing units established by Order Nos. 535-42 and 535-73 for Sections 20 and 21, Township 9 North, Range 57 West, 6th P.M.; 2) establish an approximate 1080-acre drilling and spacing unit; 3) approve up to 32 horizontal wells within the approximate 1080-acre drilling and spacing unit established for the below described lands (“Application Lands”) for production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations, 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, but 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 9 North, Range 57 West, 6th P.M.
Section 20: E½NE¼
Section 21: All
Applicant states that the proposed wells shall be drilled on a common or existing wellpad or from no more than eight wellpads within the unit
8. 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.
9. 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.
10. 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 328 feet, are anticipated to be productive from four zones, and are generally of uniform thickness throughout the Application Lands.
11. Engineering testimony and exhibits submitted on March 17, 2015, in support of the Application by Donald F. Koenig, Senior Reservoir Engineer for Whiting, showed that the drainage area for analog horizontal Codell and Niobrara Formations wells are estimated at 80 acres, and an approximate 720-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.
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. Whiting 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: 1) vacate two approximate 640-acre drilling and spacing units established by Order Nos. 535-42 and 535-73 for Sections 20 and 21, Township 9 North, Range 57 West, 6th P.M.; 2) establish an approximate 720-acre drilling and spacing unit for Sections 20 and 21, Township 9 North, Range 57 West, 6th P.M., and 3) approve a total of up to 32 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with said wells to be drilled on a common or existing wellpad or from no more than four wellpads within the unit.
ORDER
IT IS HEREBY ORDERED:
1. Two approximate 640-acre drilling and spacing units established by Order Nos. 535-42 and 535-73 for Sections 20 and 21, Township 9 North, Range 57 West, 6th P.M. are hereby vacated.
2. An approximate 720-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 9 North, Range 57 West, 6th P.M.
Section 20: E½NE¼
Section 21: All
3. 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.
4. The proposed wells shall be drilled on a common or existing wellpad or from no more than four 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 _____ day of May, 2015, as of April 13, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By_____________________________________
Julie Murphy, Secretary