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, ARAPAHOE COUNTY, COLORADO |
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CAUSE NO. 535
DOCKET NO. 170500204
TYPE: ADDITIONAL WELLS
ORDER NO.: 535-846 |
REPORT OF THE COMMISSION
1. The Commission heard this matter on September 11, 2017 at the Durango Public Library, Program Room #2, 1900 East Third Avenue, Durango, Colorado, upon applications by Highlands Natural Resources Corporation (“Highlands” or “Applicant”) for an Order to establish two approximate 1280-acre drilling and spacing units for Sections 31 and 32, Township 5 South, Range 64 West, 6th P.M. (DSU #1 in Docket No. 161000415) and Sections 31 and 32, Township 5 South, Range 64 West, 6th P.M. (DSU #2 in Docket No. 161000416) and for an additional 3 horizontal wells for a total of 4 horizontal wells, within the proposed units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation (Docket Nos. 170500204 and 175000205) (collectively referred to herein as the “Applications”).
2. Renegade Oil & Gas Company, LLC (“Renegade” or “Protestant”) protested the Applications.
3. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.
4. The Commission has jurisdiction over the subject matter and of the parties interested therein, and jurisdiction to promulgate the hereinafter this order pursuant to the Oil and Gas Conservation Act.
5. On September 6, 2017, the Hearing Officer issued a Hearing Officer Recommendation recommending that Highlands’s Applications be approved. See Exhibit A.
6. Highlands and Renegade presented argument and testimony to the Commission at hearing on September 11, 2017. Highlands’s Exhibits L-1 through L-6, G-1 through G-6, E-1, and E-2 were admitted into the record without objection from Renegade. Renegade’s Exhibits 1 through 3 were admitted into the record without objection from Highlands.
CONCLUSIONS
7. Evidence presented at hearing supports the Hearing Officer’s Recommendation. Thus, pursuant to Section 34-60-106(6), C.R.S., the Commission hereby adopts the Hearing Officer Recommendation and APPROVES Highlands’s Applications, subject the addition of Paragraph 2 in the below Order.
8. The Commission also concludes there is additional rational for approving the Applications beyond that which was discussed in the Hearing Officer’s Recommendation. The Act declares that it is in the public interest to “foster” development of oil and resources. § 34-60-102(1)(a)(I), C.R.S. Highlands presented a proposal for development and showed at hearing intention to drill wells, while Renegade has shown no intent to develop oil and gas resources in the proposed DSUs. Granting Highlands’s Applications would promote development of oil and gas resources in accordance with the goals of the Act.
ORDER
1. An approximate 1280-acre exploratory drilling and spacing unit for Sections 31 and 32, Township 5 South, Range 64 West, 6th P.M., (Docket No. 161000415) is hereby established, with one horizontal well within the unit in a general east-west orientation, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of the horizontal well to be no closer than 100 feet from the eastern and western boundaries of the DSU, no closer than 600 feet from the northern and southern boundaries of the DSU, and no closer than 150 feet from the productive interval of another well producing from the same formation, unless an exception is granted by the Director.
2. The approximate 1,280-acre drilling and spacing unit established by Order No. 535-612 for Sections 34 and 35, Township 5 South, Range 64 West, 6th P.M. for the Niobrara Formation, is hereby vacated.
3. An approximate 1280-acre exploratory drilling and spacing unit is hereby established for Sections 33 and 34, Township 5 South, Range 64 West, 6th P.M., (Docket No. 161000416) with one horizontal well within the unit in a general east-west orientation, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the productive interval of the horizontal well to be no closer than 100 feet from the western boundary of the DSU, no closer than 600 feet from the eastern, northern and southern boundaries of the DSU, and no closer than 150 feet from the productive interval of another well producing from the same formation, unless an exception is granted by the Director.
4. An additional three horizontal wells, for a total of four horizontal wells within the exploratory DSU for Sections 31 and 32, Township 5 South, Range 64 West, 6th P.M., with the same unit boundary setbacks and interwell setbacks as requested in Docket No. 161000415, unless an exception is granted by the Director.
5. An additional three horizontal wells, for a total of four horizontal wells within the exploratory DSU for Sections 33 and 34, Township 5 South, Range 64 West, 6th P.M., with the same unit boundary setbacks and interwell setbacks as requested in Docket No. 161000416, 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 5th day of October, 2017, as of September 11, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
James P. Rouse, Acting Secretary