BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
|
REPORT OF THE COMMISSION
The Commission heard this matter on October 26, 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 4, Township 4 South, Range 64 West, 6th P.M.; 2) vacate an approximate 1280-acre exploratory drilling and spacing unit established by Order No. 535-519 for Sections 5 and 6, Township 4 South, Range 64 West, 6th P.M.; and 3) establish an approximate 1280-acre drilling and spacing unit for Sections 4 and 5, Township 4 South, Range 64 West, 6th P.M., and to approve up to two horizontal wells within the 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.
4. On October 31, 2011, the Commission entered Order No. 535-97 which established 25 approximate 640-acre drilling and spacing units and approved two horizontal wells in each unit, for production of oil, gas, and other hydrocarbons from the Niobrara Formation, and allowed for the lateral of a given horizontal well to enter the Niobrara Formation no closer than 300 feet from the section line.
5. On July 28, 2014, the Commission entered Order No. 535-519 which, among other things, vacated two approximate 640-acre drilling and spacing units established by Order No. 535-97 for Sections 5 and 6, Township 4 South, Range 64 West, 6th P.M.; and established an approximate 1280-acre exploratory drilling and spacing unit for Sections 5 and 6, Township 4 South, Range 64 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and approve up to two horizontal wells within the unit.
6. On September 15, 2014, the Commission entered Order No. 535-537 which, among other things, modified Order No. 535-97 to allow for the lateral of a given horizontal well to enter the Niobrara Formation anywhere with the unit for Section 4, Township 4 South, Range 64 West, 6th P.M.
7. On August 27, 2015, Conoco, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 4, Township 4 South, Range 64 West, 6th P.M.; 2) vacate an approximate 1280-acre exploratory drilling and spacing unit established by Order No. 535-519 for Sections 5 and 6, Township 4 South, Range 64 West, 6th P.M.; and 3) establish an approximate 1280-acre drilling and spacing unit for below-described lands (Application Lands), and to approve up to two horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, 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 granted by the Director.
Township 4 South, Range 64 West, 6th P.M.
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Section 5: All
8. On October 5, 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 Marie Giuffreda, Associate Landman for Conoco, showed that both the mineral and surface interests 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 Kristie Ramlal, Geologist for Conoco, showed the Niobrara Formation is present throughout the Application Lands, and is approximately 320 feet in thickness.
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 that the proposed 1280 acre drilling and spacing unit, with the requested setbacks, and with the requested number of horizontal wells in the Niobrara formation in the Application Lands, will promote efficient drainage, protect correlative rights, and prevent waste.
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 enter an order to: 1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-97 for Section 4, Township 4 South, Range 64 West, 6th P.M.; 2) vacate an approximate 1280-acre exploratory drilling and spacing unit established by Order No. 535-519 for Sections 5 and 6, Township 4 South, Range 64 West, 6th P.M.; and 3) establish an approximate 1280-acre drilling and spacing unit for Sections 4 and 5, Township 4 South, Range 64 West, 6th P.M., and to approve up to two horizontal wells within the 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 4, Township 4 South, Range 64 West, 6th P.M., is hereby vacated.
2. An approximate 1280-acre exploratory drilling and spacing unit established by Order No. 535-519 for Sections 5 and 6, Township 4 South, Range 64 West, 6th P.M., is hereby vacated.
3. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and up to two horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 4 South, Range 64 West, 6th P.M.
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4. The productive interval of the wellbores shall be located no closer than 460 feet from the unit boundaries, and no closer than 150 feet from the treated interval of any other wellbore located in the unit, 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 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 November 2015, as of October 26, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
Julie Murphy, Secretary