BEFORE
THE OIL AND 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 FORMATION, UNNAMED FIELD, WELD COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 160400183
ORDER NO. 535-732
TYPE: EXCEPTION LOCATION |
REPORT OF THE COMMISSION
The Commission heard this matter on June 6, 2016, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to reduce the northern and southern setbacks in an approximate 1,366.48-acre existing drilling and spacing unit established by Order No. 535-668 for Sections 16, 21 and 28, Township 12 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 April 4, 2011, the Commission entered Order No. 535-6 which, among other things, established an approximate 726.48-acre drilling and spacing unit for Lots 1-4 of Section 16 (being all that portion lying within the state of Colorado) and all of Section 21, Township 12 North, Range 65 West, 6th P.M., and approved two horizontal wells for the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation with the productive intervals of the wellbore of any permitted well 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 safe formation, without exception being granted by the Director.
7. On February 18, 2016, Anadarko, by its attorneys, filed with the Commission a verified application (“Application”) for an order to modify the setbacks established by Order No. 535-668 such that the productive interval of any permitted well within the approximate 1,366-acre existing drilling and spacing unit established for the below-described lands (“Application Lands”) should be not less than 330 feet from the northern and southern unit boundaries, and not less than 150 feet from the productive interval of any well being drilled or producing from the same formation, without exception being granted by the Director:
Township 12 North, Range 65 West, 6th
P.M.
Section
16: Lots 1-4 (all that portion lying within the state of Colorado)
Section 21: All
Section 28: All
8. On March 28, 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.
9. On March 31, 2016, Anadarko, by its attorneys, requested and Staff granted, a continuance to the June 2016 hearing.
10. Land 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.
11. Geologic testimony and exhibits submitted in support of the Application by James L. Bridgeman III, Geologist for Applicant, requested that the Commission take administrative notice pursuant to Rule 519.c.(4) of the geological evidence for Order No. 535-713. In Order No. 535-713, the geological evidence showed that the Niobrara Formation is present throughout the application lands and that the net thickness is approximately 100 feet to 120 feet thick.
12. Engineering testimony and exhibits submitted in support of the Application by Randy Anderson, Senior Exploration Engineer for Applicant, requested that the Commission take administrative notice pursuant to Rule 519.c.(4) of the engineering evidence for Order No. 535-713. In Order No. 535-713, the engineering evidence demonstrated that offsetting wells in the Niobrara Formation with an average completed interval length of between 8500 and 9500 feet have an average drainage area of 107 acres and an average drainage radius of approximately 238 feet.
13. 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.
14. Anadarko agrees to be bound by oral order of the Commission.
15. 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 the northern and southern setbacks to 330 feet in an approximate 1,366.48-acre existing drilling and spacing unit established by Order No. 535-668 for Sections 16, 21 and 28, Township 12 North, Range 65 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
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ORDER
IT IS HEREBY ORDERED:
1. The setbacks established by Order No. 535-668 are hereby modified such that the productive interval of any permitted well within the approximate 1,366.48-acre existing drilling and spacing unit shall be no less than 330 feet from the boundaries of the units for any well producing from the Niobrara Formation, and the inter-well setbacks be modified such that the productive interval of any permitted well be not less than 150 feet from the treated interval of another well producing from the same formation, unless an exception is 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 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 20th day of June, 2016, as of June 6, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By _________________________________
Julie Murphy, Secretary