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 IN AN UNNAMED FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 150500304
ORDER NO. 535-673 |
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 the approximate 640-acre drilling and spacing unit established by Order No. 535-610 for Section 22, Township 12 North, Range 66 West, 6th P.M., for production of oil, gas and associated hydrocarbons from the Codell Formation; and (2) establish an approximate 1,280-acre drilling and spacing unit for Sections 21 and 22, Township 12 North, Range 66 West, 6th P.M., and approve up to four horizontal wells within the proposed unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation.
FINDINGS
The Commission finds as follows:
1. Cirque Resources LP, Operator No. 10470 (“Cirque” 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 Commission Rules provides a well to be drilled 2,500 feet or greater shall be located not less than 600 feet from any lease line, and shall be 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, unless authorized by the Commission upon hearing.
5. On December 15, 2014, the Commission entered Order No. 535-610 which, among other things, established an approximate 640-acre drilling and spacing unit for Section 22, Township 12 North, Range 66 West, 6th P.M., and approved up to four horizontal wells for the Codell Formation within the unit.
6. On March 19, 2015, Cirque, by its attorneys, filed with the Commission a verified application (“Application”) for an order to: (1) vacate the approximate 640-acre drilling and spacing unit established for Section 22, Township 12 North, Range 66 West, 6th P.M., for production of oil, gas and associated hydrocarbons from the Codell Formation; and (2) establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to four horizontal wells within the proposed unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation, with the productive intervals of the wellbore to be located no closer than 300 feet from the proposed unit boundaries and no closer than 660 feet from the productive interval of a well producing from the Codell Formation, without exception being granted by the Director.
Township 12 North, Range 66 West, 6th P.M.
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7. On April 27, 2015, Cirque, 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.
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8. Testimony and exhibits submitted in support of the Application by William R. Givan, Regional Land Manager for Cirque, showed that Cirque owns substantial leasehold interests in the Application Lands.
9. Testimony and exhibits submitted in support of the Application by Robert H. Sterling, Senior Geologist for Cirque, showed that the Codell Formation underlies the entirety of the Application Lands and ranges from approximately 18 to 19 feet thick. Further testimony showed the Codell Formation is a series of siltstones and sandstones deposited in the Western Interior Seaway and is a common source of supply.
10. Testimony and exhibits submitted in support of the Application by Barry Voigt, Reservoir Engineer for Cirque, showed that drilling and completing horizontal wells within the Codell Formation underlying the Application Lands is the most efficient and economic method of developing the resource. Further testimony revealed the predicted well drainage area is about 223 acres for approximate 1280-acre laterals and would accommodate up to four horizontal Codell wells, while protecting correlative rights of adjacent mineral owners.
11. 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.
12. Cirque agrees to be bound by oral order of the Commission.
13. 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 the approximate 640-acre drilling and spacing unit established by Order No. 535-610 for Section 22, Township 12 North, Range 66 West, 6th P.M., for production of oil, gas and associated hydrocarbons from the Codell Formation; and (2) establish an approximate 1,280-acre drilling and spacing unit for Sections 21 and 22, Township 12 North, Range 66 West, 6th P.M., and approve up to four horizontal wells within the proposed unit, for the production of oil, gas and associated hydrocarbons from the Codell Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit established by Order No. 535-610, for Section 22, Township 12 North, Range 66 West, 6th P.M., is hereby vacated, for production of oil, gas and associated hydrocarbons from the Codell Formation.
2. An approximate 1280-acre drilling and spacing unit, is hereby established, for the below-described lands, and up to four horizontal wells, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell Formation,
Township 12 North, Range 66 West, 6th P.M.
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3. The productive interval of the wellbore shall be located no closer than 300 feet from the unit boundary and no closer than 660 feet from the productive interval of any well drilled or producing from the Codell Formation, without exception being granted by the Director.
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 2nd day of June, 2015, as of May 18, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Julie Murphy, Secretary