BEFORE THE OIL & 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 AND CODELL FORMATIONS, UNNAMED FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 535

   

DOCKET NO. 160100022

 

TYPE: SPACING

 

ORDER NO.  535-718

 

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: 1) vacate an approximate 960-acre drilling and spacing unit established by Order No. 535-268 for the S½ of Section 11 and all of Section 14, Township 11 North, Range 58 West, 6th P.M.; 2) vacate Order No. 535-694; 3) establish two approximate 1280-acre drilling and spacing units covering Sections 14, 23, 26 and 35, Township 11 North, Range 58 West, 6th P.M.; and 4) approve up to 32 horizontal wells within each unit, 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 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 the parties interested therein, and has authority 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.  Section 35, Township 11 North, Range 58 West, 6th P.M. is subject to this Rule for the Niobrar and Codell Formations.

 

5.            On February 11, 2013, the Commission entered Order No. 535-268, which established ten approximate 960-acre drilling and spacing units and approved up to four horizontal wells within each unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Section 14, Township 11 North, Range 58 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

6.            On May 6, 2013, the Commission entered Order No. 535-325, which established an approximate 640-acre drilling and spacing unit and approved up to six horizontal wells within the unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Section 35, Township 11 North, Range 58 West, 6th P.M. is subject to this Order for the Niobrara Formation.

 

7.            On January 26, 2015, the Commission entered Order No. 535-631, which vacated an approximate 640-acre drilling and spacing unit established by Order No. 535-325 and established a 640-acre drilling and spacing unit, allowing for up to 16 horizontal wells within the unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Sections 26 and 35, Township 11 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara Formation.

 

8.            On September 14, 2015, the Commission entered Order No. 535-694, which vacated Order No. 535-631, modified Order No. 535-268 as it applies to an existing 960-acre drilling and spacing unit to include the Codell Formation, establish an approximate 1280-acre drilling and spacing unit, and approve up to 32 additional horizontal wells within each drilling and spacing unit.  Sections 14, 23 and 26, Township 11 North, Range 58 West, 6th P.M. are subject to this Order for the Niobrara and Codell Formations.

 

9.            On November 23, 2015, Whiting, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to (1) vacate an approximate 960-acre drilling and spacing unit established by Order No. 535-268 for the S½ of Section 11 and all of Section 14, Township 11 North, Range 58 West, 6th P.M.; (2) vacate Order No. 535-694; (3) establish two approximate 1280-acre drilling and spacing units for the below-described lands (“Application Lands”); and (4) approve up to 32 horizontal wells within each unit, with the productive interval of the wellbore to be no closer than 100 feet from the unit boundaries, and not less than 100 feet from the productive interval of any well within the Niobrara and/or Codell Formations, unless an exception is granted by the Director:

 

Township 11 North, Range 58 West, 6th P.M.

Section 14:      All

Section 23:      All

 

Township 11 North, Range 58 West, 6th P.M.

Section 26:      All

Section 35:      All

 

10.          On January 5, 2016, Whiting and the Bureau of Land Management (“BLM”) agreed that the drilling and spacing unit contains federal leased and/or unleased 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.

 

11.          On January 5, 2016, 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 testimony and exhibits were submitted in support of the Application.

 

            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 Odegard, Senior Geologist for Whiting, showed that the Niobrara and Codell Formations are present throughout the Application Lands, are approximately 385 feet thick from the top of the Niobrara Formation through the base of the Codell Formation, and that the formations are generally of uniform thickness throughout the Application Lands.

 

            14.       Engineering testimony and exhibits submitted in support of the Application by Donald Koenig, Reservoir Engineering Manager for Whiting, showed that the drainage area for analogous horizontal Niobrara Formation wells are estimated at 45 acres, and an approximate 1280-acre drilling and spacing unit is therefore not less than the maximum area that can be efficiently, economically and effectively drained by 32 horizontal wells producing oil, gas and associated hydrocarbons from the benches of the Niobrara and Codell Formations.

 

            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: 1) vacate an approximate 960-acre drilling and spacing unit established by Order No. 535-268 for the S½ of Section 11 and all of Section 14, Township 11 North, Range 58 West, 6th P.M.; 2) vacate Order No. 535-694; 3) establish two approximate 1280-acre drilling and spacing units covering Sections 14, 23, 26 and 35, Township 11 North, Range 58 West, 6th P.M.; and 4) approve up to 32 horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.

 

ORDER

 

            IT IS HEREBY ORDERED:

 

1.            An approximate 960-acre drilling and spacing unit established by Order No. 535-268 for the S½ of Section 11 and all of Section 14, Township 11 North, Range 58 West, 6th P.M., is hereby vacated.

 

2.            Order No. 535-694 is hereby vacated.

 

3.            Two approximate 1280-acre drilling and spacing units for the below-described lands, are hereby established, and a total of up to 32 horizontal wells within the unit are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations:

 

Township 11 North, Range 58 West, 6th P.M.

Section 14:      All

Section 23:      All

 

Township 11 North, Range 58 West, 6th P.M.

Section 26:      All

Section 35:      All

 

4.            The productive interval of the wellbore shall be no closer than 100 feet from the productive interval of any other wellbore producing from the Niobrara and Codell 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.

 

5.            The wells will be drilled from no more than four well pads within the unit, unless an exception is granted by the Director.

 

6.            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.

 

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

           

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By____________________________________

Julie Murphy, Secretary