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, ARAPAHOE COUNTY, COLORADO.

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CAUSE NO. 535

 

DOCKET NO. 170600308

 

TYPE: ADDITIONAL WELLS

 

ORDER NO. 535-805

           

REPORT OF THE COMMISSION

 

The Commission heard this matter on June 12, 2017, Rio Blanco Courthouse, 555 Main Street, Meeker, Colorado, upon application for an order to amend Order No. 535-313 to allow additional wells in an established 640-acre drilling and spacing unit for Section 26, Township 4 South, Range 64 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.            Bison Oil & Gas, LLC (“Bison” or “Applicant”), Operator No. 10618, 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 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.

 

5.            On May 6, 2013, the Commission entered Order No. 535-313 which, among other things, established two approximate 640-acre drilling and spacing units consisting of Sections 26 and 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, with the treated interval of the wells to be located no closer than 460 feet from the unit boundary and no closer than 920 feet from the treated interval of any other wellbore within the unit, without exception being granted by the Director.  The Application Lands are subject to this Order for the Niobrara Formation. 

 

6.            On March 24, 2017, Bison, by the attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to amend Order No. 535-313 to allow an additional fourteen wells for a total of up to 16 wells in the established approximate 640-acre drilling and spacing unit for the below-described lands (“Application Lands”), for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of any permitted wellbore within the unit to be located no closer than 150 feet from the productive interval of any other wellbore producing from the Niobrara Formation within the unit, and no closer than 460 feet from the unit boundaries, without exception being granted by the Director:

 

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

Section 26:      All

 

7.            On May 22, 2017, Bison, 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.

 

8.            Land testimony and exhibits submitted in support of the Application by Robert Pierini, Senior Landman for Bison Oil & Gas, LLC, showed Bison as the owner of a leasehold interest in the Application Lands.

 

9.            Geologic testimony and exhibits submitted in support of the Application by Ian Hogan, Senior Geologist for Bison Oil & Gas, LLC, included an analysis of the Niobrara Formation structure; an isopach map showing the gross thickness of the Niobrara Formation across the Application Lands; a type cross section of several wells in the vicinity of the Application Lands showing the Niobrara Formation is present across the Application Lands showing the Niobrara Formation is present across the Application Lands; and averages approximately 350 feet in thickness.

 

10.          Engineering testimony and exhibits submitted in support of the Application by David Gonzales, President and Chief Operating Officer for Bison Oil & Gas, LLC, demonstrated the drainage area for a 2-mile horizontal well is estimated at 76 acres for a Niobrara Formation well. Thus, an approximate 1,280-acre drilling and spacing unit is therefore not less than the maximum area that can be efficiently, economically and effectively drained by 16 horizontal wells producing oil, gas and associated hydrocarbons from the benches of the Niobrara Formation.

 

11.          Bison agreed to be bound by oral order of the Commission. 

 

12.          Based on the facts stated in the verified Application and on the Hearing Officer review of the Application under Rule 511., the Commission should enter an order to amend Order No. 535-313 to allow additional wells in an established 640-acre drilling and spacing unit for Section 26, Township 4 South, Range 64 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED, that:

 

1.            Order No. 535-313 is hereby amended to allow for a total of up to 16 horizontal wells within the appropriate 640-acre drilling and spacing unit for the below-described lands, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:

 

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

Section 26:      All

 

2.            The productive interval of any permitted wellbore within the unit to be located no closer than 150 feet from the productive interval of any other wellbore producing from the Niobrara Formation within the unit, and no closer than 460 feet from the unit boundaries, without exception being granted by the Director.

 

3.            All wells permitted under this Order shall be drilled from no more than two wellpads within the unit, or from a legal location on adjacent lands, without exception from the Director.

 

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 23rd day of June, 2017, as of June 12, 2017

           

                                                            OIL AND GAS CONSERVATION COMMISSION

                                                            OF THE STATE OF COLORADO

 

 

By: ____________________________________     

                                                                        Peter Gowen, Acting Secretary