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. 150700365
ORDER NO. 535-675
TYPE: SPACING
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REPORT OF THE COMMISSION
The Commission heard this matter on July 20, 2015, at the Colorado Oil and Gas Conservation Commission, 1120
Lincoln Street, Suite 801, Denver, Colorado,
upon application for an order to: 1) establish an approximate 1280-acre
drilling and spacing unit for Section 4, Township 11 North, Range 64 West, 6th
P.M., and Section 33, Township 12 North, Range 64 West, 6th P.M.,
and approve up to seven horizontal wells within the proposed unit, for the
production of oil, gas and associated hydrocarbons from the Niobrara Formation;
and 2) approve an additional five horizontal wells, for a total of six
horizontal wells, within an approximate 1280-acre drilling and spacing unit for
Section 4, Township 11 North, Range 64 West, 6th P.M., and Section 33,
Township 12 North, Range 64 West, 6th P.M., for the production of
oil, gas and associated hydrocarbons from the Codell Formation.
FINDINGS
The Commission finds as follows:
1.
Anadarko
E&P Onshore LLC (Operator
No. 2800) (“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.
5.
On October 27, 2014,
the Commission approved Order No. 535-561, which established an approximate
1,280.00.00-acre drilling and spacing unit for Section 4, Township 11 North, Range 64 West, 6th
P.M., and Section 33, Township 12 North, Range 64 West, 6th P.M., for the production of oil, gas and
associated hydrocarbons from the Codell Formation, and approved one horizontal
well within the unit.
6.
On April 8, 2015, Anadarko, by its attorneys, filed with the Commission a
verified application (“Application”) for an order to: 1) establish an
approximate 1280-acre drilling and spacing unit for the below described lands
(“Application Lands”), and approve up to seven horizontal wells within the
proposed unit, for the production of oil, gas and associated hydrocarbons from
the Niobrara Formation; 2) approve an additional five horizontal wells, for a
total of six horizontal wells, within an approximate 1280-acre drilling and
spacing unit established for the Application Lands, for production from the
Codell Formation; and 3) require the productive interval of the wellbore to be located not
less than 600 feet from the unit boundaries, and not less than 150 feet from
the treated interval of any well from the Codell or Niobrara Formations,
without exception being granted by the Director:
Township 11 North, Range 64 West, 6th
P.M.
Section 4: All
Township 12 North, Range 64 West, 6th
P.M.
Section 33: All
7.
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 June 29, 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.
The Application Lands contain
federal leased and/or unleased minerals. As such, Anadarko agreed
to submit a Communitization Agreement to the Bureau of Land Management (“BLM”)
for any existing wells within 60 days of the date of entry of this order.
Carrizo also agreed to submit a Communitization Agreement to the BLM at least
90 days before the anticipated date of first production (as defined in the
Commission Rules) from the initial well drilled within the drilling and spacing
unit.
10.
Land testimony
and exhibits submitted in support of the Application by Jason Rayburn, Senior Landman
for Anadarko, showed that Anadarko owns
substantial leasehold interests in the Application Lands.
11.
An affidavit
signed by Thomas A. Berkman, Senior Project Advisor for Anadarko, requested
that the Commission take administrative notice of the geologic testimony and
exhibits on file with the Commission for Order Numbers 535-667 covering lands
adjacent to the lands that are the subject of this Application. Geologic testimony
and exhibits submitted in support of the application for Order Number 535-667
showed that the Codell and Niobrara Formations underlie the entirety of the
Application Lands. The Codell Formation ranges from approximately 20 to 21
feet thick, and the Niobrara Formation ranges from 133 to 134 feet thick.
12.
An affidavit
signed by Emily Boeking, Reservoir Engineer for Anadarko, requested that the Commission
take administrative notice of the engineering testimony and exhibits on file with
the Commission for Order Numbers 535-667 covering lands adjacent to the lands that
are the subject of this Application. Engineering testimony and exhibits
submitted in support of the application for Order Number 535-667 showed that the
estimated drainage area for analog wells for the Codell Formation ranges from 94
acres to 286 acres, with an average estimated drainage area of 163 acres per
well, and an approximate 1280-acre drilling and spacing unit would accommodate
the drilling of an additional five horizontal wells, for a total of six
horizontal wells, for the Codell Formation. The estimated drainage area for
analog wells for the Niobrara Formation ranges from 29 acres to 130 acres, with
an average estimated drainage area of 69 acres per well, the estimated drainage
area calculated using the Joshi method is 137 acres, and an approximate
1280-acre drilling and spacing unit would accommodate the drilling of seven
horizontal wells for the Niobrara Formation.
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.
Anadarko 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) establish an approximate 1280-acre
drilling and spacing unit for Section 4, Township 11 North, Range 64 West, 6th
P.M., and Section 33, Township 12 North, Range 64 West, 6th P.M., and
approve up to seven horizontal wells within the proposed unit, for the
production of oil, gas and associated hydrocarbons from the Niobrara Formation;
and 2) approve an additional five horizontal wells, for a total of six
horizontal wells, within an approximate 1280-acre drilling and spacing unit for
Section 4, Township 11 North, Range 64 West, 6th P.M., and Section 33,
Township 12 North, Range 64 West, 6th P.M., for the production of
oil, gas and associated hydrocarbons from the Codell Formation.
ORDER
IT IS HEREBY ORDERED:
1.
An
approximate 1280-acre drilling and spacing unit for the below-described lands,
is hereby established, and a total of up to seven horizontal wells within the
unit, are hereby approved, for the production of oil, gas and associated
hydrocarbons from the Niobrara Formation:
Township 11 North, Range 64 West, 6th
P.M.
Section 4: All
Township 12 North, Range 64 West, 6th
P.M.
Section 33: All
2.
An
additional five horizontal wells, for a total of six horizontal wells, in an approximate
1280-acre drilling and spacing unit for the below-described lands, are hereby
approved, for the production of oil, gas and associated hydrocarbons from the
Codell Formation:
Township 11 North, Range 64 West, 6th
P.M.
Section 4: All
Township 12 North, Range 64 West, 6th
P.M.
Section 33: All
3.
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 treated interval of any well producing
from the Codell or Niobrara Formations, without exception being granted by the
Director.
4.
A
maximum of eight surface locations will be allowed for development of
minerals from all hydrocarbon-bearing formations within the spacing units.
5.
Anadarko shall submit a
Communitization Agreement to the BLM for any existing wells within 60 days of
the date of entry of this order. Anadarko shall also submit a Communitization
Agreement to the BLM at least 90 days before the anticipated date of first
production (as defined in the Commission Rules) from the initial well drilled
within the drilling and 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 3rd day of August, 2015, as of July 20, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary