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, WILDCAT FIELD, ARAPAHOE COUNTY,      COLORADO

)

)

)

)

)

)

)

CAUSE NO. 535

 

DOCKET NO. 170300130

 

TYPE: SPACING

 

ORDER NO. 535-780

REPORT OF THE COMMISSION

 

The Commission heard this matter on May 1, 2017, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to vacate an approximate 2560-acre unconventional resource unit established by Order No. 535-614, and to vacate the 640-acre drilling and spacing unit established for Section 35, Township 4 South, Range 64 West, 6th P.M. by Order No. 535-145, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         ConocoPhillips Company (Operator No. 19160) (“Conoco” 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.         On January 23, 2012, the Commission entered Order No. 535-118 which established one approximate 640-acre drilling and spacing exploratory unit for Section 32, Township 4 South, Range 64 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

5.         On March 5, 2012, the Commission entered Order No. 535-145 which established 14 approximate 640-acre drilling and spacing units for certain lands including Section 34, Township 4 South, Range 64 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

6.         On January 7, 2013, the Commission entered Order No. 535-237 which approved up to two horizontal wells for the Niobrara Formation within an approximate 640-acre exploratory drilling and spacing unit for Section 32, Township 4 South, Range 64 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

7.         On May 6, 2013, the Commission entered Order No. 535-313 which established two approximate 640-acre drilling and spacing units including Section 33, Township 4 South, Range 64 West, 6th P.M., and approved up to two horizontal wells within each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

8.         On July 29, 2013, the Commission entered Order No. 535-393 which pooled all interests within an approximate 640-acre drilling and spacing unit established by Order No. 535-313 for Section 33, Township 4 South, Range 64 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

            9.         On December 15, 2014, the Commission entered Order No. 535-614 which, among other things, established an approximate 2560-acre unconventional resource unit for the Application Lands for the production of oil, gas and associated hydrocarbons from the Niobrara Formation and allowed an appropriate number of horizontal wells within the unit in order to efficiently and economically recover the oil, gas and associated hydrocarbons from the unconventional resource unit.

10.       On January 19, 2017, Conoco, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to vacate an approximate 2560-acre unconventional resource unit established by Order No. 535-614 for the below-described lands (“Application Lands”), and to vacate the approximate 640-acre drilling and spacing unit established for Section 35, Township 4 South, Range 64 West, 6th P.M. by Order No. 535-145, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:

 

Township 4 South, Range 64 West, 6th P.M.

Section 32:      All

Section 33:      All

Section 34:      All

Section 35:      All

 

11.       On February 27, 2017, Applicant, 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.

 

12.       Land testimony and exhibits submitted in support of the Application by Marie Giuffreda, Associate Landman for Conoco, showed that Conoco owns 100% interest in Sections 32, 33 and 34 of the Application Lands.  There are three existing horizontal wells located in Sections 32, 33 and 34 of the Application Lands. In Section 32, Township 4 South, Range 64 West, 6th P.M., production from the Tebo 32 3H Well (API No. 05-123-07178) will be allocated on a unit basis pursuant to Order No. 535-118.  In Section 33, Township 4 South, Range 64 West, 6th P.M., production from the Tebo 33 1H Well (API No. 05-123-07205) is subject to Order No. 535-393 and is being allocated and will continue to be allocated in accordance with the Declaration of Pooling filed in Arapahoe County. In Section 34, Township 4 South, Range 64 West, 6th P.M., production from the Grimm 34 4H Well (API No. 05-123-07179) is being allocated and will continue to be allocated in accordance with the Declaration of Pooling filed in Arapahoe County.

 

13.       On March 7, 2017, Bison Oil & Gas, Inc. (“Bison” or “Protestant”) filed a protest to the Application.  On April 6, 2017, Bison withdrew its protest to the Application.

 

14.       The above-referenced testimony and exhibits show that granting the Application will preserve the intent of the Colorado Oil and Gas Conservation Act, will not violate correlative rights, and will allow for the efficient and economic production of the Niobrara Formation on the Application Lands.

 

15.       Conoco agreed to be bound by oral order of the Commission.

 

16.       Based on the facts stated in the verified Application, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to vacate an approximate 2560-acre unconventional resource unit established by Order No. 535-614, and to vacate the 640-acre drilling and spacing unit established for Section 35, Township 4 South, Range 64 West, 6th P.M. by Order No. 535-145, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 2560-acre unconventional resource unit established for the Application Lands by Order No. 535-614 is hereby vacated, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation; and

 

2.         The approximate 640-acre drilling and spacing unit established for Section 35, Township 4 South, Range 64 West, 6th P.M. by Order No. 535-145 is hereby vacated, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation and is hereby reverted to unspaced lands pursuant to Rule 318.a.

 

3.         Production from the Tebo 32 3H Well (API No. 05-123-07178) located in Section 32, Township 4 South, Range 64 West, 6th P.M. shall be allocated on a unit basis pursuant to Order No. 535-118. 

 

4.         Production from the Tebo 33 1H Well (API No. 05-123-07205) located in Section 33, Township 4 South, Range 64 West, 6th P.M. is being allocated and will continue to be allocated in accordance with the Declaration of Pooling filed in Arapahoe County.

 

5.         Production from the Grimm 34 4H Well (API No. 05-123-07179) located in Section 34, Township 4 South, Range 64 West, 6th P.M. is being allocated and will continue to be allocated in accordance with the Declaration of Pooling filed in Arapahoe County.

 

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 12th day of May, 2017, as of May 1, 2017.

           

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By____________________________________

Peter Gowen, Acting Secretary