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. 161200497

 

TYPE:  SPACING

 

ORDER NO. 535-759

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on March 20, 2017, at the Larimer County Conference Center at The Ranch, First National Bank Building, 5280 Arena Circle, Loveland, Colorado, upon application for an order to: (1) partially vacate Order No. 535-3 in so far as it applies to Sections 9 and 10, Township 8 North, Range 61 West, 6th P.M.; (2) and establish an approximate 1,280-acre drilling and spacing unit for Sections 9 and 10, Township 8 North, Range 61 West, 6th P.M., and approve up to two horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Noble Energy, Inc. (Operator No. 100322) (“Noble” or “Applicant”) 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.         On February 22, 2011, the Commission entered Order No. 535-3, which among other things, approves the request for an order to establish approximate 640-acre drilling and spacing units for certain lands, and to drill one horizontal well in each of the units for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the initial perforation and the ultimate bottomhole location being no closer than 600 feet from the boundaries of the drilling and spacing unit, unless an exception is granted by the Director.  Sections 9 and 10, Township 8 North, Range 61 West, 6th P.M., are subject to this Order for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.

 

5.         On October 13, 2016, Noble, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to: (1) partially vacate Order No. 535-3 in so far as it applies Sections 9 and 10, Township 8 North, Range 61 West, 6th P.M.; (2) establish an approximate 1,280-acre drilling and spacing unit for the below described lands (“Application Lands”), and authorizing the drilling of two horizontal wells within the proposed unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations, with the treated intervals of any horizontal well permitted under this Application located not less than 200 feet from the west and east boundaries of the unit, and 600 feet from the north and south boundaries of the unit, and not less than 150 feet from the treated interval of another well within the unit, unless an exception is granted by the Director; (3) authorizing up to one well pad to be located on the unit or adjacent thereto, unless an exception is granted by the Director; and (4) maintain Order 535-3 as to the Gravel Draw 09-09H Well (API No. 05-123-33090) located Section 9, Township 8 North, Range 61 West, 6th P.M.:

 

Township 8 North, Range 61 West, 6th P.M.

Section 9:        All

Section 10:      All

 

6.         On November 21, 2016, amended December 7, 2016 and March 17, 2017, 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.

 

            7.         Land testimony and exhibits submitted in support of the Application by Julie T. Jenkins, Land Manager for Noble, showed that Noble holds oil and gas leasehold interests and has a right to drill in the Application Lands. Land testimony further showed that Noble was no longer seeking the requested relief as to the Codell Formation.

 

8.         Further testimony also showed that Noble currently operates the Gravel Draw 09-09H Well (API No. 05-123-33090) within Section 9, Township 8 North, Range 61 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation. 

 

9.         Geologic testimony and exhibits submitted in support of the Application by Mark Nicholson, Geologist for Noble, showed that the Niobrara Formation is present throughout the Application Lands, is approximately 285 to 290 feet thick, and is generally of uniform thickness throughout the Application Lands. 

 

10.       Engineering testimony and exhibits submitted in support of the Application by Mike Marini, Engineer for Noble, showed that Noble is planning to drill two horizontal wells in the Niobrara Formation.  Engineering testimony further showed that the drainage area for approximately two-mile-long horizontal Niobrara Formation wells is estimated at 160 acres, and an approximate 1280-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by two horizontal wells producing oil, gas and associated hydrocarbons from the Niobrara Formation.

 

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 enter an order to; (1) vacate an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 10, Township 8 North, Range 61 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; (2) establish an approximate 1280-acre drilling and spacing unit for Sections 9 and 10, Township 8 North, Range 61 West, 6th P.M., and approve up to two horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation; and (3) and maintain the payment of proceeds from the Gravel Draw 09-09H Well on its current 640-acre basis.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 10, Township 8 North, Range 61 West, 6th P.M., for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation, is vacated

 

2.         An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to two horizontal wells within the unit to be drilled in an east-west direction are hereby approved for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:

 

Township 8 North, Range 61 West, 6th P.M.

Section 9:        All

Section 10:      All

 

 

3.         The productive interval of each wellbore shall be no closer than 200 feet from the west and east boundaries of the unit, no closer than 600 feet from the north and south boundaries of the unit, no closer than 150 feet from the treated interval of another well within the unit, and no closer than 600 feet from the productive interval of any existing well, unless the Director grants an exception.

 

4.         The wells shall be drilled from no more than one pad located in the unit or on lands adjacent thereto, unless the Director grants an exception.

 

5.         The current allocation of proceeds on a 640-acre basis shall be maintained for the existing Gravel Draw 09-09H Well (API No. 05-123-33090).  No other wells shall be drilled in the 640-acre drilling and spacing unit established by Order No. 535-3 for Section 9, Township 8 North, Range 61 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation

 

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 28th day of March, 2017, as of March 20, 2017.    

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By_____________________________________

               Peter Gowen, Acting Secretary