BEFORE THE OIL AND GAS CONSERVATION
COMMISSION
OF THE STATE OF COLORADO
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. 150500268
ORDER NO. 535-670
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REPORT OF THE COMMISSION
The Commission heard this matter
on May 18, 2015, at the Aims Community College, 260 College Avenue, Fort
Lupton, Colorado, upon application for an order to: 1) vacate an approximate 720-acre drilling and
spacing unit established by Order No. 535-5 for Sections 14 and 23, Township 12 North, Range 65 West, 6th P.M.,
for the production of oil, gas and associated hydrocarbons from the Niobrara
Formation; 2) establish an approximate 1,360-acre drilling and spacing unit for
Sections 14, 23 and 26, Township 12 North, Range 65 West, 6th
P.M.; and 3) approve
up to seven horizontal wells within an approximate 1372-acre drilling and
spacing unit, for production of oil, gas and associated hydrocarbons from the
Niobrara Formation; and 4) approve
an additional five horizontal wells, for a total of six horizontal wells within
an approximate 1360-acre drilling and spacing unit established by Order No.
535-569, for Sections 14, 23 and 26, Township 12 North, Range 65 West, 6th
P.M., for production of oil,
gas, and associated hydrocarbons from the Codell Formation.
FINDINGS
The Commission finds as follows:
1.
Anadarko
E&P Onshore LLC (“Anadarko” 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.
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.
5.
On April 4, 2011, the
Commission entered Order No. 535-5 which established an approximate 720-acre
drilling and spacing unit for Sections 14 and 23, Township 12 North, Range 65
West, 6th P.M., and approve up to two horizontal wells within each
unit, for the production of gas and associated hydrocarbons from the Niobrara
Formation.
6.
On October 27, 2014,
the Commission entered Order No. 535-569 which established an approximate 1,360-acre
drilling and spacing unit for Sections 14, 23 and 26, Township 12 North, Range
65 West, 6th P.M., and approved one horizontal well within the unit,
for the production of oil, gas and associated hydrocarbons from the Codell
Formation.
7.
On March 12, 2015, Anadarko, by its attorneys, filed with the Commission a
verified application (“Application”) for an order to: 1) vacate an approximate 720-acre drilling and
spacing unit established by Order No. 535-5 for Sections 14 and 23, Township 12
North, Range 65 West, 6th P.M., for the production of oil, gas and
associated hydrocarbons from the Niobrara Formation; 2) establish an
approximate 1,360-acre drilling and spacing unit for the below-described lands (“Application
Lands”); and 3) approve up to seven horizontal
wells within an approximate 1372-acre drilling and spacing unit, for production
of oil, gas and associated hydrocarbons from the Niobrara Formation; and 4) approve an additional five horizontal
wells, for a total of six horizontal wells within an approximate 1360-acre
drilling and spacing unit established by Order No. 535-569 for the Application
Lands, for production of oil, gas, and associated hydrocarbons from the Codell
Formation, with the
productive interval of the wellbore to be no closer than 600 feet from the unit
boundaries and no closer than 150 feet from the productive interval of any
other wellbore located within the unit, without exception being granted by the
Director:
Township 12 North, Range 65 West, 6th P.M.
Section
14: Lots 1-4 (approximately 80
acres), portion lying within
the State of Colorado
Section 23: All
Section 26: All
Applicant states that any
horizontal well to be drilled under this Application will be drilled from the
surface of the drilling unit, or on adjacent lands with consent of the
landowner, unless an exception is granted by the Director.
8.
On April 27, 2015, Anadarko, 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.
Testimony
and exhibits submitted in support of the Application by Jason Rayburn, Landman
for Anadarko, showed that Anadarko owns
substantial leasehold interests in the Application Lands.
10.
Testimony
and exhibits submitted in support of the Application by Thomas A. Berkman,
Senior Project Geologist for Anadarko, showed that the Codell and Niobrara
Formations underlie the entirety of the Application Lands. The Codell
Formation ranges from approximately 16 to 20 feet thick, and the Niobrara
Formation ranges from 135 to 140 feet thick under the Application Lands.
11.
Testimony
and exhibits submitted in support of the Application by Emily Boecking,
Reservoir Engineer for Anadarko, showed that well drainage area for the
Niobrara Formation is approximately 137 acres for the estimated drainage area
for the Codell Formation ranges from 94 to 286 acres for approximate 1280-acre
horizontal laterals and would accommodate a total of six horizontal wells, for
the Codell Formation and the estimated drainage area for the Niobrara Formation
is approximately 137 acres for approximate 1280-acre horizontal laterals, and
would accommodate up to seven horizontal wells for the Niobrara Formation.
12.
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.
Anadarko agrees to be bound by oral order of the Commission.
14.
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 720-acre drilling and spacing unit
established by Order No. 535-5 for Sections 14 and 23, Township 12 North, Range
65 West, 6th P.M., for the production of oil, gas and associated
hydrocarbons from the Niobrara Formation; 2) establish an approximate
1,360-acre drilling and spacing unit for Sections 14, 23 and 26, Township 12
North, Range 65 West, 6th P.M.; and 3) approve up to seven horizontal
wells within an approximate 1372-acre drilling and spacing unit, for production
of oil, gas and associated hydrocarbons from the Niobrara Formation; and 4) approve an additional five horizontal
wells, for a total of six horizontal wells within an approximate 1360-acre
drilling and spacing unit established by Order No. 535-569, for Sections 14, 23
and 26, Township 12 North, Range 65 West, 6th P.M., for production
of oil, gas, and associated hydrocarbons from the Codell Formation.
ORDER
IT IS HEREBY ORDERED:
1.
An approximate 720-acre
drilling and spacing unit established by Order No. 535-5 for Sections 14 and 23,
Township 12 North, Range 65 West, 6th P.M., is hereby vacated, for
the production of oil, gas and associated hydrocarbons from the Niobrara
Formation
2.
An approximate 1,360-acre
drilling and spacing unit for the below-described lands, is hereby established,
and up to seven
horizontal wells within the unit, are hereby approved, for production of oil,
gas and associated hydrocarbons from the Niobrara Formation
Township 12 North, Range 65 West, 6th P.M.
Section 14: Lots 1-4 (approximately 80 acres), portion lying within
the State of Colorado
Section 23: All
Section 26: All
3.
An additional five
horizontal wells, for a total of six horizontal wells, within an approximate 1360-acre
drilling and spacing unit established by Order No. 535-569, for the
below-described lands, are hereby approved, for production of oil, gas, and
associated hydrocarbons from the Codell Formation:
Township 12 North, Range 65 West, 6th P.M.
Section 14: Lots 1-4 (approximately 80 acres), portion lying within
the State of Colorado
Section 23: All
Section 26: All
4.
The productive
interval of the wellbores shall be located no closer than 600 feet from the
unit boundaries and no closer than 150 feet from the productive interval of any
well producing from the same formation, without exception being granted by the
Director.
5.
A maximum of
eight surface locations will be allowed for development of minerals from all
hydrocarbon-bearing formations within the spacing unit.
IT IS FURTHER ORDERED:
1.
The
provisions contained in the above order shall become effective immediately.
2.
The
Commission expressly reserves the 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 1st day of June, 2015, as of May 18, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary