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 CODELL AND NIOBRARA FORMATIONS, UNNAMED FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 535

 

DOCKET NO. 160100013

 

TYPE: SPACING

 

ORDER NO. 535-716

 

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 vacate two approximate 640-acre drilling and spacing units established by Order No. 535-3 for Sections 26 and 27, Township 9 North, Range 58 West, 6th P.M., and to establish an approximate 640-acre drilling and spacing unit for portions of Sections 26 and 27, Township 9 North, Range 58 West, 6th P.M., and to approve four horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.

 

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, 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. The Application Lands are subject to Rule 318.a. for the Codell Formation.

5.         On February 22, 2011, the Commission entered Order No. 535-3, which among other things, established 160 approximate 640-acre drilling and spacing units, including Section Sections 26 and 27, Township 9 North, Range 58 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

6.         On November 20, 2015, Noble, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to vacate two approximate 640-acre drilling and spacing units established by Order No. 535-3 for Sections 26 and 27, Township 9 North, Range 58 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation;  and establish an approximate 640-acre drilling and spacing unit for the below-described lands, (“Application Lands”), and approve a total of up to four horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of any horizontal wellbore to be no closer than 300 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 9 North, Range 58 West, 6th P.M.

Section 26:      S˝

Section 27:      S˝

 

7.         On December 22, 2015, 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.

 

8.         Land testimony and exhibits submitted in support of the Application by Julie T. Jenkins, Land Manager for Noble, showed that both the mineral and surface interests in the Application Lands is owned in fee, and that Noble owns a partial undivided leasehold ownership interest in the Application Lands.

 

9.         Geoscience testimony and exhibits submitted in support of the Application by Mark Nicholson, Geologist for Noble, showed the Codell and Niobrara Formations are present throughout the Application Lands, and are approximately 8-10 and 285 feet thick, respectively.

 

10.       Engineering testimony and exhibits submitted in support of the Application by Jenette Hilton, Senior Production Engineer for Noble, demonstrated that the estimated recovery factor of hydrocarbons under the Application Lands using a horizontal lateral would be 0.550% per well, and that the proposed 640-acre drilling and spacing unit, with the requested setbacks, and with the requested number of horizontal wells in the Codell and Niobrara Formations in the Application Lands, will promote efficient drainage, protect correlative rights, and prevent waste.

 

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.       Noble agreed 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 vacate two approximate 640-acre drilling and spacing units established by Order No. 535-3 for Sections 26 and 27, Township 9 North, Range 58 West, 6th P.M., and to establish an approximate 640-acre drilling and spacing unit for portions of Sections 26 and 27, Township 9 North, Range 58 West, 6th P.M., and to approve four horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         Two approximate 640-acre drilling and spacing units established by Order No. 535-3 for Sections 26 and 27, Township 9 North, Range 58 West, 6th P.M., are hereby vacated;

 

2.         An approximate 640-acre drilling and spacing unit for the below-described lands, is hereby established, and up to four horizontal wells for the Codell and Niobrara Formations, are hereby approved, with the treated interval of the wellbores to be located no closer than 300 feet from the unit boundaries, and no closer than 150 feet from the treated interval of any other wellbore located in the unit, unless the Director grants an exception.

 

Township 9 North, Range 58 West, 6th P.M.

Section 26:      S˝

Section 27:      S˝

 

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 5th day of February 2016, effective as of January 26, 2016.

           

OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

By: ____________________________________     

     Julie Murphy, Secretary