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 CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO

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CAUSE NO. 535

 

DOCKET NO. 170700430

 

TYPE: SPACING

 

ORDER NO. 535-836

REPORT OF THE COMMISSION

 

The Commission heard this matter on July 24, 2017, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to establish an approximate 1,280-acre drilling and spacing unit for Sections 9 and 16, Township 8 North, Range 59 West, 6th P.M., and to approve up to 12 horizontal wells in the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.

 

FINDINGS

 

The Commission finds as follows:

 

1.         Noble Energy, Inc. (“Noble” 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 September 19, 2011, the Commission entered Order No. 535-69 which established, among other things, 640-acre drilling and spacing units for the Application Lands and allowed one (1) horizontal well to be drilled for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.  Order No. 535-3 also established 600’ setbacks from the boundaries of the drilling and spacing unit without an exception being granted by the Director of the Commission. 

 

            5.         On May 25, 2017, Noble, 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 12 horizontal wells in the proposed unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the productive interval of any horizontal well shall be no closer than 200 feet from the northern and southern boundaries of the proposed unit, 300 feet from the eastern and western boundaries of the proposed unit, with the wells at a north-south orientation, unless an exception is granted by the Director:

 

 

Township 8 North, Range 59 West, 6th P.M.

Section 9:        All

Section 16:      All

 

Applicant states that the wells will be drilled from no more than three well pads within the drilling and spacing unit, or adjacent thereto, unless an exception is granted by the Director.

 

6.         On or before July 3, 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 Ryan Antonio, Land Manager for Noble, showed that both the mineral and surface interests in the Application Lands are owned in fee and by the State of Colorado, and that Noble has the authority to operate a majority partial undivided leasehold interest in the Application Lands.

 

8.         Geoscience testimony and exhibits submitted in support of the Application by Mark Nicholson, Geologist for Noble, showed the Codell Formation is present throughout the Application Lands and is approximately 8 - 12 feet thick, and the Niobrara Formation is present throughout the Application Lands and is approximately 285 – 290 feet thick.

 

9.         Engineering testimony and exhibits submitted in support of the Application by Mike Marini, Reservoir Engineer at Noble, demonstrated that the hydrocarbons under the Application Lands would not be fully recovered without horizontal drilling, that the average estimated drainage area for the Niobrara wells and Codell wells is calculated to be 107 acres, and that the proposed drilling and spacing unit, with the requested setbacks, and the requested number of horizontal wells in the Codell and Niobrara Formations in the Application Lands, will promote efficient drainage, protect correlative rights, and prevent waste.

 

10.       On July 19, 2017, Noble agreed that no horizontal well within the drilling and spacing unit will penetrate Federal minerals in the Niobrara Formation outside of the drilling and spacing unit.

 

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 establish an approximate 1,280-acre drilling and spacing unit for Sections 9 and 16, Township 8 North, Range 59 West, 6th P.M., and to approve up to 12 horizontal wells in the unit, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1)         An approximate 1,280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 12 horizontal wells within the unit, with the wells at a north-south orientation, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations:

 

Township 8 North, Range 59 West, 6th P.M.

Section 9:        All

Section 16:      All

 

2.         The productive interval of each proposed horizontal well shall be no closer than 200 feet from the northern and southern boundaries of the proposed unit and 300 feet from the eastern and western boundaries of the proposed unit, unless an exception is granted by the Director.

 

3.         The wells shall be drilled from no more than two multi-well pads in the unit or adjacent thereto, unless an exception is granted by the Director.

 

4.         No horizontal well within the drilling and spacing unit will penetrate Federal minerals in the Niobrara Formation outside of the drilling and spacing unit.

 

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 14th day of August, 2017, as of July 24, 2017.        

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By__________________________________

            James Rouse, Acting Secretary