BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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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) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 20, Township 4 South, Range 65 West, 6th P.M.; 2) vacate Order No. 535-100 as it applies to Section 19, Township 4 South, Range 65 West, 6th P.M., and 3) establish an approximate 1280-acre drilling and spacing unit for Sections 19 and 20, Township 4 South, Range 65 West, 6th P.M., and to approve up to two horizontal wells in the 1280-acre drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. ConocoPhillips Company (“Conoco” 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.
Township 4 South, Range 65 West, 6th P.M.
Section 19: All
Section 20: All
Applicant requests that the proposed wells will be located on no more than one well pad per quarter quarter section within the drilling and spacing unit.
8. On June 29, 2015, Conoco, 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 Jace McKenzie, Associate Landman for Conoco, showed that both the surface and the mineral interest in the Application Lands is owned in fee, and that Conoco owns a partial undivided leasehold ownership interest in the Application Lands.
10. Geoscience testimony and exhibits submitted in support of the Application by Christian Marine Lahsberg, Staff Geologist for Conoco, showed the Niobrara Formation is present throughout the Application Lands, and is approximately 291 feet thick.
11. Engineering testimony and exhibits submitted in support of the Application by Stephanie LaCour, Reservoir Engineer for Conoco, demonstrated that the drainage area for analogue horizontal wells in the Niobrara Formation of the Application Lands is not greater than 407.3 acres and an approximate 1280-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by a horizontal well producing oil, gas and associated hydrocarbons from 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. Conoco agreed 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: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 20, Township 4 South, Range 65 West, 6th P.M.; 2) vacate Order No. 535-100 as it applies to Section 19, Township 4 South, Range 65 West, 6th P.M., and 3) establish an approximate 1280-acre drilling and spacing unit for Sections 19 and 20, Township 4 South, Range 65 West, 6th P.M., and to approve up to two horizontal wells in the 1280-acre drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 20, Township 4 South, Range 65 West, 6th P.M., is hereby vacated, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.
2. Order No. 535-100, is hereby vacated, as it applies to Section 19, Township 4 South, Range 65 West, 6th P.M.
3. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and up to two horizontal wells for the Niobrara Formation, are hereby approved, with the productive interval of the wellbore to be located no closer than 460 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:
Township 4 South, Range 65 West, 6th P.M.
Section 19: All
Section 20: All
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 30 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 4th day of August , 2015, as of July 20, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Julie Murphy, Secretary