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

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