BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE NIOBRARA FORMATION, UNNAMED FIELD, ARAPAHOE COUNTY, COLORADO. |
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CAUSE NO. 535
DOCKET NO. 170700493
TYPE: SPACING
ORDER NO. 535-840
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REPORT OF THE COMMISSION
The Commission heard this matter on July 24, 2017, at the Colorado Oil and Gas Conservation Commission, 1120 South Lincoln, Denver, Colorado, upon application for an order to approve an additional 14 horizontal wells for a total of up to 16 wells in an approximate 1,280-acre drilling and spacing unit established by Order No. 535-249 for Sections 13 and 14, Township 5 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 Exploration, LLC (“Bison” or “Applicant”), Operator No. 10646, 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 March 5, 2012, the Commission entered Order No. 535-145 which established 14 approximate 640-acre drilling and spacing units and approved up to two horizontal wells within the units, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation with the treated interval of the wellbore to be located no closer than 460 feet from the unit boundaries and no closer than 920 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director.
5. On January 7, 2013, the Commission entered Order No. 535-249 which vacated the approximate 640-acre drilling and spacing unit for Section 14, Township 5 South, Range 64 West, 6th P.M., established by Order No. 535-145 and established two 1,280-acre drilling and spacing units, one of which covers Sections 13 and 14, Township 5 South, Range 64 West, 6th P.M., and approved up to two horizontal wells within the units for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation with the bottomhole locations not less than 600 feet from the boundary of the proposed drilling unit and not less than 460 feet from any other well or treated interval of a well producing from the Niobrara Formation, without exception being granted by the Director.
6. On May 25, 2017, (amended May 31, 2017), Bison, by its attorneys, filed with the Commission pursuant to § 34-60-116, C.R.S., a verified application (“Application”) for an order to amend Order No. 535-249 to approve an additional fourteen wells for a total of up to sixteen (16) wells in the established 1,280-acre drilling and spacing unit covering the below-described lands (the “Application Lands”) for 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 460 feet from the unit boundaries and no closer than 150 feet from the productive interval of any other wellbore producing from the Niobrara Formation within the unit, unless an exception is granted by the Director:
Township 5 South, Range 64 West, 6th P.M.
Section 13: All
Section 14: All
Applicant states that the wells be drilled from one well pad located within the unit and/or from a legal location on adjacent lands, unless an exception is granted by the Director.
7. On July 3, 2017, Bison, by its attorneys, filed with the Commission a written request to approve the Application based on (i) the merits of the verified Application and (ii) 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 land consultant for Applicant, 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 geology consultant for Applicant, Ian Hogan, Senior Geologist for Bison Exploration, 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; and a volumetric analysis supporting horizontal wellbore density of up to 16 horizontal wells within the 1,280-acre drilling and spacing unit, which is not less than the maximum area that can be efficiently, economically and effectively drained by 16 horizontal wells.
10. Engineering testimony and exhibits submitted in support of the Application by engineering consultant for Applicant, David Gonzales, President and Chief Operating Officer for Bison Exploration, LLC, include an economic analysis that demonstrates that the Application Lands will be efficiently and economically developed.
11. On or about July 10, 2017, Wade Anderson, Jerry and Donna Cunningham, Gary and Denise Hopkins, Ken and Gabriele Joern, Gerald and Evelyn Kimmell, Randall Paige and Connie Parks-Paige, and Terry and Trena Sparks filed Rule 510 statements in support of Bison’s application to approve up to 16 horizontal wells within the unit.
12. On July 10, 2017, Clay Cowling, on behalf of ConocoPhillips Company (“Conoco”) submitted a 510 statement stating that Conoco does not support the request for increased density, that this area of the basin does not support the need for 16 wells and such a request should be analyzed to determine if waste will occur as defined by the Oil and Gas Conservation Act.
13. Bison agreed to be bound by oral order of the Commission.
14. 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 approve an additional 14 horizontal wells for a total of up to 16 wells in an approximate 1,280-acre drilling and spacing unit established by Order No. 535-249 for Sections 13 and 14, Township 5 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. An additional 14 horizontal wells, for a total of up to 16 horizontal wells, are hereby approved within the approximate 1,280-acre drilling and spacing unit established by Order No. 535-249 for the below-described 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 5 South, Range 64 West, 6th P.M.
Section 13: All
Section 14: All
2. The wells permitted under this Order shall be located on one wellpads within the drilling and spacing unit or on adjacent lands, 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 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 16th day of August, 2017, as of July 24, 2017
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
James Rouse, Acting Secretary