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 NIOBRARA AND CODELL FORMATIONS, UNNAMED FIELD, WELD COUNTY, COLORADO
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CAUSE NO. 535
DOCKET NO. 150900504
ORDER NO. 535-695
TYPE: ADDITIONAL WELLS
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REPORT OF THE COMMISSION
The Commission heard this matter on September 14, 2015, at the Western State Colorado University, University Center, South Ballroom, 600 North Adams Street, Gunnison, Colorado, upon application for an order to modify Order No. 535-314 to include the Codell Formation, and approve up to 32 additional horizontal wells within two existing approximate 960-acre drilling and spacing units for Section 20 and the N1/2 of Section 29, Township 10 North, Range 57 West, 6th P.M. and the S1/2 of Section 29 and Section 32, Township 10 North, Range 57 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.
FINDINGS
The Commission finds as follows:
1. Whiting Oil and Gas Corporation (Operator No. 96155) (“Whiting” or “Applicant”) 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 July 9, 2012, corrected December 13, 2012, the Commission entered Order No. 535-179, which established 6 approximate 960-acre drilling and spacing units and approved up to four (4) horizontal wells within each unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. All of Section 20 and the N½ of Section 29, Township 10 North, Range 57 West, 6th P.M. are subject to this Order for the Niobrara Formation.
6. On October 1, 2012, the Commission entered Order No. 535-204, which established 6 approximate 960-acre drilling and spacing units and approved up to four (4) horizontal wells within each unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the surface location located anywhere in the designated drilling and spacing unit and the initial perforation and the bottomhole location to be no closer than 600 feet from the boundaries of the drilling and spacing unit and no closer than 1,200 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director. The S½ Section 29 and all of Section 32, Township 10 North, Range 57 West, 6th P.M. are subject to this Order for the Niobrara Formation.
7. On March 25, 2013, the Commission entered Order No. 535-296, which established 21 approximate 640 to 960-acre drilling and spacing units and approved up to eight (8) horizontal wells within each unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the surface location located anywhere in the designated drilling and spacing unit and the initial perforation and the bottomhole location to be no closer than 100 feet from the unit boundary and no closer than 200 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director. The Application Lands are subject to this Order.
8. On May 6, 2013, the Commission entered Order No. 535-314, which approved up to sixteen (16) horizontal wells within each 640 to 960-acre unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the surface location located anywhere in the designated drilling and spacing unit and the initial perforation and the bottomhole location to be no closer than 100 feet from the unit boundary and no closer than 200 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director. The Application Lands are subject to this Order.
9. On July 16, 2015, Whiting, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to modify Order No. 535-314 to include the Codell Formation, and approve up to 32 additional horizontal wells within two existing approximate 960-acre drilling and spacing units (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations, with the productive interval of the horizontal wellbore to be no closer than 100 feet from the productive interval of any other wellbore producing from the Codell and Niobrara Formations, and no closer than 100 feet from a unit boundary unless such boundary abuts or corners lands for which the Commission has not at the time of the drilling permit application granted the right to locate the productive interval of the wellbore no closer than 100 feet from a unit boundary, unless an exception is granted by the Director. If the Commission has not at the time of the drilling permit application granted to owners of adjacent or cornering lands the right to locate the productive interval of the wellbore no closer than 100 feet from a unit boundary, then the productive interval of the wellbore shall be located no closer than 300 feet from the unit boundary, unless an exception is granted by the Director:
Township 10 North, Range 57 West, 6th P.M.
Section 20: All
Section 29: N½
Township 10 North, Range 57 West, 6th P.M.
Section 29: S½
Section 32: All
10. On August 24, 2015, Whiting, 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.
11. On September 8, 2015, Whiting and the BLM agreed that the drilling and spacing units contain federal minerals. As such, Whiting agrees to submit a Communitization Agreement (“CA”) to the BLM for any existing wells within 60 days of the entry of this order. Whiting also agrees to submit a CA to the BLM at least 90 days before the anticipated date of first production (as defined in the COGCC Rules) from the initial well drilled within the drilling and spacing unit.
12. Land testimony and exhibits submitted in support of the Application by Scott McDaniel, Regional Land Manager for Whiting, showed that Whiting holds oil and gas leasehold interests and has a right to drill in the Application Lands.
13. Geologic testimony and exhibits submitted in support of the Application by Mark K. Odegard, Senior Geologist for Whiting, showed that the Niobrara and Codell Formations are present throughout the Application Lands, the combined Niobrara and Codell Formations are approximately 335 feet thick, and are generally of uniform thickness throughout the Application Lands.
14. Engineering testimony and exhibits submitted in support of the Application by Donald F. Koenig, Senior Reservoir Engineer for Whiting, showed that the drainage areas for analog horizontal Niobrara and Codell Formation wells are estimated at 68 acres, and an approximate 960-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by 32 horizontal wells producing oil, gas and associated hydrocarbons from the benches of the Niobrara Formation and the Codell Formation.
15. 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.
16. Whiting 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 modify Order No. 535-314 to include the Codell Formation, and approve up to 32 additional horizontal wells within two existing approximate 960-acre drilling and spacing units for Section 20 and the N1/2 of Section 29, Township 10 North, Range 57 West, 6th P.M. and the S1/2 of Section 29 and Section 32, Township 10 North, Range 57 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.
ORDER
IT IS HEREBY ORDERED:
1. Order No. 535-314 is hereby modified to include the Codell Formation as it pertains to the Application Lands.
2. A total of up to 32 horizontal wells within each unit are hereby approved, within each of the 960-acre drilling and spacing units covering the below described lands, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:
Township 10 North, Range 57 West, 6th P.M.
Section 20: All
Section 29: N½
Township 10 North, Range 57 West, 6th P.M.
Section 29: S½
Section 32: All
3. The productive interval of the horizontal wellbore will be no closer than 100 feet from the productive interval of any other wellbore producing from the Codell and Niobrara Formations, and no closer than 100 feet from a unit boundary unless such boundary abuts or corners lands for which the Commission has not at the time of the drilling permit application granted the right to locate the productive interval of the wellbore no closer than 100 feet from a unit boundary, unless an exception is granted by the Director. If the Commission has not at the time of the drilling permit application granted to owners of adjacent or cornering lands the right to locate the productive interval of the wellbore no closer than 100 feet from a unit boundary, then the productive interval of the wellbore will be located no closer than 300 feet from the unit boundary, unless an exception is granted by the Director.
4. The wells will be drilled from no more than four well pads within the unit, unless an exception is granted by the Director.
5. Whiting will submit a Communitization Agreement (“CA”) to the BLM for any existing wells within 60 days of the entry of this order. Whiting will submit a CA to the BLM at least 90 days before the anticipated date of first production (as defined in the COGCC 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 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 _____ day of September, 2015, as of September 14, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Julie Murphy, Secretary