BEFORE THE OIL & 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. 160100024
TYPE: SPACING
ORDER NO. 535-720
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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 three approximate 960-acre drilling and spacing units established by Order No. 535-76 for all of Sections 2 11, 14, and 23 and the N½ of Section 26, Township 10 North, Range 59 West, 6th P.M.; 2) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-417 for Section 9, Township 10 North, Range 59 West, 6th P.M.; 3) vacate Order No. 535-473 as it pertains to the Application Lands; 4) vacate an approximate 960-acre drilling and spacing unit established by Order No. 535-707 for all of Section 9 and the N½ of Section 16, Township 10 North, Range 59 West, 6th P.M.; 5) establish three approximate 1280-acre drilling and spacing units; and 6) approve up to 32 horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations.
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. The S½ of Section 16 and all of Sections 2, 11, 14, and 23, Township 10 North, Range 59 West, 6th P.M. are subject to this Rule for the Codell Formation.
5. On September 19, 2011, the Commission entered Order No. 535-76, which established five (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. Sections 2, 11, 14 and 23, Township 10 North, Range 59 West, 6th P.M. of the Application Lands are subject to this Order for the Niobrara Formation.
6. On September 16, 2013, the Commission entered Order No. 535-417, which established four approximate 640-acre drilling and spacing units and approved up to sixteen wells within each unit for the production of oil, gas and associated hydrocarbons from the Niobrara Formation with the treated interval no closer than 100 feet from a unit boundary, unless such unit 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 treated interval of the wellbore no closer than 100 feet from the unit boundary, then the treated interval of the wellbore shall be no closer than the distance permitted in the adjacent or cornering lands. Section 9, Township 10 North, Range 59 West, 6th P.M. of the Application Lands is subject to this Order for the Niobrara Formation
7. On April 28, 2014, the Commission entered Order No. 535-473, which approved up to a total of sixteen horizontal wells within each approximate 960-acre drilling and spacing unit subject to the Order for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Sections 2, 11 and 14, Township 10 North, Range 59 West, 6th P.M. of the Application Lands are subject to this Order for the Niobrara Formation.
8. On October 26, 2015, the Commission entered Order No. 535-707, which vacated a portion of Order No. 535-417 and established one approximate 960-acre drilling and spacing unit and approved up to 32 wells within the unit for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations. Section 9 and the N½ of Section 16, Township 10 North, Range 59 West, 6th P.M. of the Application Lands 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 three approximate 960-acre drilling and spacing units established by Order No. 535-76 for Sections 2 and the N½ of Section 11, Township 10 North, Range 59 West, 6th P.M.; the S½ of Section 11 and Section 14, Township 10 North, Range 59 West, 6th P.M.; and Section 23 and the N½ of Section 26, Township 10 North, Range 59 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; 2) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-417 for Section 9, Township 10 North, Range 59 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; (3) vacate Order No. 535-473 as it pertains to the Application Lands; (4) vacate an approximate 960-acre drilling and spacing unit established by Order No. 535-707 for Section 9 and the N½ of Section 16, Township 10 North, Range 59 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations; (5) establish three approximate 1280-acre drilling and spacing units covering the below-described lands (“Application Lands”); and (6) approve up to 32 horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations 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 treated interval of any well within the Niobrara and/or Codell Formations, unless an exception is granted by the Director:
Township 10 North, Range 59 West, 6th P.M.
Section 2: All
Section 11: All
Township 10 North, Range 59 West, 6th P.M.
Section 9: All
Section 16: All
Township 10 North, Range 59 West, 6th P.M.
Section 14: All
Section 23: 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 375 feet thick from the top of the Niobrara through the base of the Codell, 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 49 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 three approximate 960-acre drilling and spacing units established by Order No. 535-76 for all of Sections 2, 11, 14, and 23 and the N½ of Section 26, Township 10 North, Range 59 West, 6th P.M.; 2) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-417 for Section 9, Township 10 North, Range 59 West, 6th P.M.; 3) vacate Order No. 535-473 as it pertains to the Application Lands; 4) vacate an approximate 960-acre drilling and spacing unit established by Order No. 535-707 for all of Section 9 and the N½ of Section 16, Township 10 North, Range 59 West, 6th P.M.; 5) establish three approximate 1280-acre drilling and spacing units; and 6) 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. Three approximate 960-acre drilling and spacing units established by Order No. 535-76 for: Section 2 and the N½ of Section 11, Township 10 North, Range 59 West, 6th P.M.; the S½ of Section 11 and Section 14, Township 10 North, Range 59 West, 6th P.M.; and Section 23 and the N½ of Section 26, Township 10 North, Range 59 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation are hereby vacated.
2. An approximate 640-acre drilling and spacing unit established by Order No. 535-417 for Section 9, Township 10 North, Range 59 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation is hereby vacated.
3. Order No. 535-473 is hereby vacated as it pertains to the Application Lands.
4. An approximate 960-acre drilling and spacing unit established by Order No. 535-707 for Section 9 and the N½ of Section 16, Township 10 North, Range 59 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations is hereby vacated.
5. Three 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 10 North, Range 59 West, 6th P.M.
Section 2: All
Section 11: All
Township 10 North, Range 59 West, 6th P.M.
Section 9: All
Section 16: All
Township 10 North, Range 59 West, 6th P.M.
Section 14: All
Section 23: All
6. 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.
7. The wells will be drilled from no more than four well pads within the unit, unless an exception is granted by the Director.
8. Whiting shall submit a Communitization Agreement (“CA”) to the BLM for any existing wells within 60 days of the entry of this order. Whiting shall also 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