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 FOR THE NIOBRARA FORMATION, UNNAMED FIELD, WELD COUNTY, COLORADO

 

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CAUSE NO.  535

 

DOCKET NO. 151200730

 

TYPE: SPACING

 

ORDER NO. 535-713

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on January 26, 2016, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to reduce setbacks in an approximate 1,270.40-acre drilling and spacing unit established by Order No. 535-666 for Section 33, Township 12 North, Range 65 West, 6th P.M., and Section 4, Township 11 North, Range 65 West, 6th P.M., for the production of oil gas and associated hydrocarbons from the Niobrara 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.

 

4.         Rule 318.a. of the Commission Rules provides a well to be drilled 2,500 feet or greater shall be located not less than 600 feet from any lease line, and shall be located not less than 1,200 feet from any other producible oil or gas well when drilling to the same common source of supply, unless authorized by the Commission upon hearing.

 

5.         On May 18, 2015, the Commission entered Order No. 535-666 which established an approximate 1,270.40-acre drilling and spacing unit for the Application Lands for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; and approved up to seven horizontal wells within the unit, with the productive intervals of the wellbore to be located not less than 600 feet from the unit boundaries, and not less than 600 feet from the productive interval of any well being drilled or producing from the Niobrara Formation, without exception being granted by the Director.

 

6.         On October 8, 2015, Applicant, by its attorneys, filed with the Commission a verified application (“Application”) for an order to reduce the setbacks in an approximate 1,270.40-acre drilling and spacing unit established by Order No. 535-666 for the below-described lands (“Application Lands”), for the production of oil gas and associated hydrocarbons from the Niobrara Formation, with the productive intervals of the wellbore to be located not less than 330 feet from the unit boundaries and not less than 150 feet from the productive interval from any well being drilled or producing from the Niobrara Formation, without exception being granted by the Director:

 

Township 12 North, Range 65 West, 6th P.M.

Section 33:      All

 

Township 11 North, Range 65 West, 6th P.M.

Section 4:        Lots 1 and 2, S˝N˝, and S˝

 

7.         On January 5, 2016, 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.

 

8.         Testimony and exhibits submitted in support of the Application by Jason Rayburn, Senior Landman for Applicant, showed that Anadarko owns substantial leasehold interests in the Application Lands.

 

9.         Testimony and exhibits submitted in support of the Application by Thomas A. Berkman, Geologist for Applicant, showed that the Niobrara Formation underlies the entirety of the Application Lands and is a common source of supply.  Further testimony showed that the net pay ranges from less than 100 feet in the northwest to approximately 120 feet along the southeast portion of the Application Lands.    

 

10.        Engineering testimony and exhibits submitted in support of the Application by Emily Boecking, Senior Reservoir Engineer for Applicant, showed a calculated effective drainage radius of 238 feet, indicating that a setback of 330 feet from the unit boundaries will allow production of reserves that otherwise would not be recovered from the Niobrara Formation, thus preventing waste while protecting correlative rights.

 

11.       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.

 

12.       Anadarko agrees to be bound by oral order of the Commission. 

 

13.       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 reduce setbacks in an approximate 1,270.40-acre drilling and spacing unit established by Order No. 535-666 for Section 33, Township 12 North, Range 65 West, 6th P.M., and Section 4, Township 11 North, Range 65 West, 6th P.M., for the production of oil gas and associated hydrocarbons from the Niobrara Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.            The setbacks established in Order No. 535-666 for the below-described lands, are hereby reduced, within the approximate 1,270.40-acre existing drilling and spacing unit such that the productive interval shall be located no closer than than 330 feet from the boundaries of the units and no closer than than 150 feet from the productive interval of another well producing from the same formation, without exception being granted by the Director. 

 

2.            A maximum of four surface locations will be allowed for development of minerals from the Niobrara Formation within the 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 5th day of February, 2016, as of January 26, 2016.

           

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Julie Murphy, Secretary