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 IN THE UNNAMED FIELD, |
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CAUSE NO. 535 ORDER NO. 535-88 |
REPORT OF THE COMMISSION
The Commission heard this matter on October 31, 2011, at the City of Littleton Council Chambers, 2255 West Berry Avenue, Littleton, Colorado 80120 upon application for an order to: 1) vacate the existing 640-acre drilling and spacing unit in Section 33, Township 8 North, Range 63 West, 6th P.M.; 2) establish one approximate 320-acre drilling and spacing unit for the S½ of said Section 33; 3) authorize one horizontal well within the 320-acre drilling and spacing unit established for S½ Section 33, Township 8 North, Range 63 West, 6th P.M., for the production of oil, gas, and related hydrocarbons from the Niobrara Formation, with the treated interval of the horizontal well to be no closer than 600 feet from the boundaries of the drilling and spacing unit; and 4) allow one or more vertical wells to be drilled within the 320-acre drilling and spacing unit with the treated interval of the vertical wellbore not less than 150 feet from any existing or permitted oil or gas wellbore, and not less than 600 feet from the boundaries of the drilling and spacing unit, unless an exception is authorized by the Director.
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 June 30, 2010, the Commission entered Order No. 535-39, which among other things, established approximate 640-acre drilling and spacing units for certain lands, including Section 33, Township 8 North, Range 63 West, 6th P.M., and approved two horizontal wells in each unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.
5. On August 30, 2011, Noble, by its attorneys, filed with the Commission a verified application (“Application”) for an order to: 1) vacate the 640-acre drilling and spacing unit for Section 33, Township 8 North, Range 63 West, 6th P.M.; 2) establish a 320-acre drilling and spacing unit for the below described lands (“Application Lands”); 3) allow one horizontal well to be drilled within the Application Lands, with the treated interval of the horizontal well to be no closer than 600 feet from the boundaries of the drilling and spacing unit; and 4) allow one or more vertical wells to be drilled within the 320-acre drilling and spacing unit with the treated interval of the vertical wellbore not less than 150 feet from any existing or permitted oil or gas wellbore, and not less than 600 feet from the boundaries of the drilling and spacing unit, unless an exception is authorized by the Director, for production of oil, gas and associated hydrocarbons from the Niobrara Formation:
Township 8 North, Range 63 West, 6th P.M.
Section 33: S½
6. On October 18, 2011, Noble, by its attorney, 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 Joseph H. Lorenzo, Land Manager for Noble, showed: Noble owns 100% of the minerals in the Application Lands.
8. Geology testimony and exhibits submitted in support of the Application by Dana Strunk, Geologist for Noble, showed: 1) the Niobrara Formation has a regional dip of 30 feet per mile to the west in the application area; 2) total thickness ranges from approximately 292 to 309 feet under the Application Lands; 3) the proposed well is estimated to encounter a total Niobrara thickness greater than 290 feet through most of the wellbore; and 4) the Niobrara Formation thins across a portion of the Application Lands.
9. Engineering testimony and exhibits submitted in support of the Application by John Arsenault, a Vice President for MHA Petroleum Consultants LLC, as a Senior Reservoir Engineer for Noble, showed: 1) by targeting the Niobrara Formation horizontally, the planned wells will efficiently develop resources in the Niobrara; 2) horizontal wells in the area recover resources that would not otherwise be recovered; 3) correlative rights will be protected; and 4) the proposed well is economic.
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. The Application was reviewed by the Colorado Department of Public Health and Environment (“CDPHE”) pursuant to consultation provisions of Rule 306.d. In a letter dated October 21, 2011, the CDPHE Oil & Gas Coordinator indicated that CDPHE does not believe any additional conditions of approval are necessary for approving the amended Application.
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: 1) vacate the existing 640-acre drilling and spacing unit in Section 33, Township 8 North, Range 63 West, 6th P.M.; 2) establish one approximate 320-acre drilling and spacing unit for the S½ of said Section 33; 3) authorize one horizontal well within the 320-acre drilling and spacing unit established for S½ Section 33, Township 8 North, Range 63 West, 6th P.M., for the production of oil, gas, and related hydrocarbons from the Niobrara Formation, with the treated interval of the horizontal well to be no closer than 600 feet from the boundaries of the drilling and spacing unit; and 4) allow one or more vertical wells to be drilled and completed within the 320-acre drilling and spacing unit with the treated interval of the vertical wellbore not less than 150 feet from any existing or permitted oil or gas wellbore, and not less than 600 feet from the boundaries of the drilling and spacing unit, unless an exception is authorized by the Director.
ORDER
NOW, THEREFORE IT IS ORDERED, that the 640-acre drilling and spacing unit for S½ Section 33, Township 8 North, Range 63 West, 6th P.M. is hereby vacated for the production of oil, gas, and related hydrocarbons from the Niobrara Formation.
IT IS FURTHER ORDERED, that a 320-acre drilling and spacing unit be hereby established for the below-listed lands, and that one horizontal well may be drilled and completed within the unit for production of oil, gas and associated hydrocarbons from the Niobrara Formation, with the treated interval of the horizontal well to be no closer than 600 feet from the boundaries of the drilling and spacing unit:
Township 8 North, Range 63 West, 6th P.M.
Section 33: S½
IT IS FURTHER ORDERED, that one or more vertical wells are authorized to be drilled and completed within the 320-acre drilling and spacing unit with the treated interval of the vertical wellbore not less than 150 feet from any existing or permitted oil or gas wellbore, and not less than 600 feet from the boundaries of the drilling and spacing unit, unless an exception is authorized by the Director.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective immediately.
IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.
IT IS FURTHER ORDERED, that 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.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.
ENTERED this 7th day of November, 2011, as of October 31, 2011.
CORRECTED this 17th day of May, 2012 as of October 31, 2011.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Peter J. Gowen, Acting Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
November 7, 2011
May 17, 2012