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 FOR THE NIOBRARA FORMATION, UNNAMED FIELD, ADAMS COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 170700499
TYPE: SPACING
ORDER NO. 535-841
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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 Lincoln St., Denver, Colorado, upon application for an order to establish an approximate 640-acre drilling and spacing unit for Section 7, Township 4 South, Range 65 West, 6th P.M., and approve up to two horizontal wells within the 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. The Application Lands are subject to Rule 318.a. for the Niobrara Formation.
5. On May 25, 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 640-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to two horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 4 South, Range 65 West, 6th P.M.
Section 7: All
6. On or before July 3, 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.
7. Land testimony and exhibits submitted in support of the Application by Mark Salvie, Senior Landman for COPC, showed that both the mineral and surface interests in the Application Lands is in majority fee ownership, and that COPC owns 100% leasehold ownership interest in the Application Lands.
8. 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 310 feet thick.
9. 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 less than 5,000’ is estimated to be no greater than 301.2 acres, that the proposed 640-acre drilling and spacing unit is not smaller than the maximum area that can be efficiently and economically drained by the two horizontal wells requested in the unit, that a horizontal well with a lateral length less than 5,000 feet producing from the Niobrara Formation meets the Applicant’s economic requirements for appraisal and delineation wells.
10. 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.
11. COPC agreed to be bound by oral order of the Commission.
12. 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 establish an approximate 640-acre drilling and spacing unit for Section 7, Township 4 South, Range 65 West, 6th P.M., and approve up to two horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 640-acre drilling and spacing unit is hereby established for the below-described lands, and up to two horizontal wells are hereby approved, for the development and operation of 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 150 feet from the productive interval of any other wellbore located in the unit, unless an exception is granted by the Director:
Township 4 South, Range 65 West, 6th P.M.
Section 7: All
2. The wells shall be drilled from no more than two wellpads within the 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 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, effective as of July 24, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By: ____________________________________
James Rouse, Acting Secretary