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. 170600316

 

TYPE: SPACING

 

ORDER NO: 535-809

 

REPORT OF THE COMMISSION

 

The Commission heard this matter on June 12, 2017, at the Rio Blanco County Courthouse, 555 Main Street, Meeker, Colorado, upon application for an order to establish an approximate 1,280-acre drilling and spacing unit for Sections 9 and 10, Township 5 South, Range 64 West, 6th P.M., and approve up to two horizontal wells in the approximate 1,280-acre drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1.         ConocoPhillips Company (“COPC” 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 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.  Sections 9 and 10, Township 5 South, Range 64 West, 6th P.M. are subject to Rule 318.a. for the Niobrara Formation.

 

            5.         On March 22, 2017, COPC, by its attorneys, filed with the Commission pursuant to §34-60-116, C.R.S., a verified application (“Application”) for an order to establish an approximate 1,280-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to two horizontal wells in the approximate 1,280-acre drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval any horizontal well shall be no closer than 600 feet from the boundaries of the unit and not less than 920 feet from the productive interval of another well within the unit, unless an exception is granted by the Director:

 

 

Township 5 South, Range 64 West, 6th P.M.

Section 9:        All

Section 10:      All

 

6.         Applicant states that all wells permitted under this Order shall be drilled from one well pad in the unit, or adjacent thereto, unless an exception is granted by the Director.

 

7.         On May 22, 2017, COPC, 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 Marie Giuffreda, Associate Landman for COPC, showed that both the mineral and surface interests in the Application Lands is in majority State ownership, and that COPC owns 100% leasehold ownership interest in the Application Lands.

 

9.         Geoscience testimony and exhibits submitted in support of the Application by Adam Mullins, Staff Geologist for COPC, showed the Niobrara Formation is present throughout the Application Lands and averages approximately 305 feet thick.

 

10.       Engineering testimony and exhibits submitted in support of the Application by Jessica Martinez, Reservoir Engineer for COPC, demonstrated that the drainage area of a horizontal well in the Niobrara Formation in the Application Lands having a completed lateral length of greater than 6,000’ is estimated to be no greater than 407.3 acres, that the proposed approximate 1,280 acre drilling and spacing unit is not smaller than the maximum area than be efficiently and economically drained by the two horizontal wells requested in the unit, that a horizontal well with a lateral length greater than 6,000 feet producing from the Niobrara Formation meets the Applicant’s economic requirements for appraisal and delineation wells. The testimony further demonstrated that the proposed 1,280-acre drilling and spacing unit, with two horizontal wells in the Niobrara Formation and the requested setbacks, will promote efficient drainage, protect correlative rights, and prevent waste. 

 

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.       COPC 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 establish an approximate 1,280-acre drilling and spacing unit for Sections 9 and 10, Township 5 South, Range 64 West, 6th P.M., and approve up to two horizontal wells in the approximate 1,280-acre drilling and spacing unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.            An approximate 1,280-acre drilling and spacing unit is hereby established for the below-described lands and up to two horizontal wells are hereby approved, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of the wellbore of each well to be located no closer than 600 feet from the unit boundaries, and no closer than 920 feet from the productive interval of any other wellbore located in the unit, unless an exception is granted by the Director:  

 

Township 5 South, Range 64 West, 6th P.M.

Section 9:        All

Section 10:      All

 

2.            The wells shall be drilled from no more than one wellpad in the proposed unit, or adjacent thereto, 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 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 30 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, effective as of June 12, 2017.

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

By: ____________________________________     

     Peter Gowen, Acting Secretary