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 IN AN UNNAMED FIELD, WELD COUNTY, COLORADO |
) ) ) ) |
CAUSE NO. 535
ORDER NO. 535-69
|
REPORT OF COMMISSION
The Commission heard this matter on September 19, 2011, at the Broomfield City & County Building, One Descombes Drive, Broomfield, Colorado 80020, upon application for an order to establish 40 approximate 640-acre drilling and spacing units for certain lands located in Townships 7 through 9 North, Ranges 58 through 61 West, 6th P.M., and approve two horizontal wells within each unit, and vertical wells with 150 foot bottomhole setbacks, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
FINDINGS
The Commission finds as follows:
1. Noble Energy, Inc. (“Noble” 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 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. The below-listed lands are subject to this Rule for the Niobrara Formation:
Township 7 North, Range 59 West, 6th P.M.
Sections: 2, 3, and 5
Township 8 North, Range 58 West, 6th P.M.
Section: 21
Township 8 North, Range 59 West, 6th P.M.
Sections: 4 through 9, 14, 16 through 30, 33, and 35
Township 8 North, Range 60 West, 6th P.M.
Sections: 9, 14, and 24
Township 8 North, Range 61 West, 6th P.M.
Sections: 22, 23, and 31 through 35
Township 9 North, Range 58 West, 6th P.M.
Section: 1
Township 9 North, Range 59 West, 6th P.M.
Sections: 11 and 32
Township 9 North, Range 60 West, 6th P.M.
Sections: 5, 8, 18, and 20
5. On June 9, 2011, Noble, by its attorneys, filed with the Commission a verified application (the “Application”) for an order to establish 45 approximate 640-acre drilling and spacing units for the below-listed lands, and approve two horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the wellbore for the permitted wells to be no closer than 600 feet from the unit boundaries, without exception being granted by the Director:
Township 7 North, Range 59 West, 6th P.M.
Sections: 2, 3, and 5
Township 8 North, Range 58 West, 6th P.M.
Section: 21
Township 8 North, Range 59 West, 6th P.M.
Sections: 4 through 9, 14, 16 through 30, 33, and 35
Township 8 North, Range 60 West, 6th P.M.
Sections: 9, 14, and 24
Township 8 North, Range 61 West, 6th P.M.
Sections: 22, 23, and 31 through 35
Township 9 North, Range 58 West, 6th P.M.
Section: 1
Township 9 North, Range 59 West, 6th P.M.
Sections: 11 and 32
Township 9 North, Range 60 West, 6th P.M.
Sections: 5, 8, 18, and 20
6. On July 18, 2011 Noble requested the withdrawal of Section 21, Township 8 North, Range 58 West, 6th P.M. from the Application, which leaves the below-listed lands subject to the Application (the “Application Lands”):
Township 7 North, Range 59 West, 6th P.M.
Sections: 2, 3, and 5
Township 8 North, Range 59 West, 6th P.M.
Sections: 4 through 9, 14, 16 through 30, 33, and 35
Township 8 North, Range 60 West, 6th P.M.
Sections: 9, 14, and 24
Township 8 North, Range 61 West, 6th P.M.
Sections: 22, 23, and 31 through 35
Township 9 North, Range 58 West, 6th P.M.
Section: 1
Township 9 North, Range 59 West, 6th P.M.
Sections: 11 and 32
Township 9 North, Range 60 West, 6th P.M.
Sections: 5, 8, 18, and 20
7. On July 27, 2011, Noble, 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 as it existed at the time.
8. On August 4, 2011, Noble met with Commission Permitting and Hearings Unit staff for informal discussions regarding the Application. Later the same day, Noble requested the following lands be withdrawn from the application:
Township 8 North, Range 59 West, 6th P.M.
Sections: 4, 5, 6, and 8
Noble also requested that the matter be continued to the September 19, 2011 Commission meeting. This request for withdrawal of lands left the following lands subject to the Application (the “Amended Application Lands”):
Township 7 North, Range 59 West, 6th P.M.
Sections: 2, 3, and 5
Township 8 North, Range 59 West, 6th P.M.
Sections: 7, 9, 14, 16 through 30, 33, and 35
Township 8 North, Range 60 West, 6th P.M.
Sections: 9, 14, and 24
Township 8 North, Range 61 West, 6th P.M.
Sections: 22, 23, and 31 through 35
Township 9 North, Range 58 West, 6th P.M.
Section: 1
Township 9 North, Range 59 West, 6th P.M.
Sections: 11 and 32
Township 9 North, Range 60 West, 6th P.M.
Sections: 5, 8, 18, and 20
9. On August 10, Noble filed an amended application (the “Amended Application”). In addition to its request for 40 640-acre spacing units and two horizontal wells authorized for each unit, Noble requested authorization to drill and complete one or more vertical wells in each of the 640-acre drilling and spacing units within the Application Lands. Noble requested that any vertical well proposed to be drilled and completed be located anywhere on the surface within the drilling and spacing unit, with a bottomhole location not less than 150 feet from any existing or permitted oil or gas wellbore, unless an exception is authorized by the Director.
10. On September 7, 2011, Noble, by its attorneys, filed with the Commission a written request to approve the Amended Application based on the merits of the verified Amended Application and the supporting exhibits. Sworn written testimony and exhibits were submitted in support of the Amended Application.
11. Land testimony and exhibits submitted in support of the Application by Joseph Lorenzo, Land Manager for Noble, showed Noble holds a leasehold interest in all the Amended Application Lands, and a majority of the mineral and surface ownership of the Application Lands is owned in fee. However, there are portions of the Application Lands that have state and federal mineral and surface ownership.
12. Geologic testimony and exhibits submitted in support of the amended Application by Thomas Zeiner, Petroleum Geologist for Noble, showed: (1) the Niobrara Formation dips an average of 25 feet per mile to the west in the Application Lands; (2) total thickness of the Niobrara Formation ranges from approximately 280 to 320 feet under the Application Lands, with the thickest area at the north end of the Application Lands; and (3) the Niobrara Formation exists under all the Amended Application Lands.
13. Engineering testimony and exhibits submitted in support of the Application by John Arsenault, Senior Reservoir Engineer for Noble, showed that: (1) by targeting the Niobrara Formation horizontally, the planned wells will efficiently develop resources in the Niobrara; (2) horizontal wells in the area recover resources that would not otherwise be recovered; and (3) the proposed wells are economic.
14. 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.
15. The Application was reviewed by the Colorado Department of Public Health and Environment (“CDPHE”) pursuant to consultation provisions of Rule 306.d. In a letter dated July 29, 2011, the CDPHE Oil & Gas Coordinator indicated that CDPHE does not believe any additional conditions of approval are necessary in approving the amended Application.
16. Noble agreed to be bound by oral order of the Commission.
17. 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 establish 40 approximate 640-acre drilling and spacing units for certain lands located in Townships 7 through 9 North, Ranges 58 through 61 West, 6th P.M., and approve two horizontal wells within each unit, and vertical wells with 150 foot bottomhole setbacks, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
NOW, THEREFORE IT IS ORDERED, that 40 approximate 640-acre drilling and spacing units are hereby established for the below-listed lands, and two horizontal wells are approved within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the wellbore for the permitted wells to be no closer than 600 feet from the unit boundaries, without exception being granted by the Director.
Township 7 North, Range 59 West, 6th P.M.
Sections: 2, 3, and 5
Township 8 North, Range 59 West, 6th P.M.
Sections: 7, 9, 14, 16 through 30, 33, and 35
Township 8 North, Range 60 West, 6th P.M.
Sections: 9, 14, and 24
Township 8 North, Range 61 West, 6th P.M.
Sections: 22, 23, and 31 through 35
Township 9 North, Range 58 West, 6th P.M.
Section: 1
Township 9 North, Range 59 West, 6th P.M.
Sections: 11 and 32
Township 9 North, Range 60 West, 6th P.M.
Sections: 5, 8, 18, and 20
IT IS FURTHER ORDERED, that vertical wells are authorized within each spacing unit, provided that the bottomhole location not less than 150’ from any existing or permitted oil or gas wellbore, unless an exception is authorized by the Director.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective immediately.
IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.
IT IS FURTHER ORDERED, that 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.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.
ENTERED this 23rd day of September, 2011, as of September 19, 2011.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Peter J. Gowen, Acting Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
September 23, 2011