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 MANCOS (INCLUDING THE SEGO SANDSTONE), NIOBRARA, FRONTIER, MOWRY, AND DAKOTA FORMATIONS, PARACHUTE FIELD, GARFIELD COUNTY, COLORADO |
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CAUSE NO. 547
DOCKET NO. 150300120
ORDER NO. 547-18 |
REPORT OF THE COMMISSION
The Commission heard this matter on March 2, 2015 at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to establish an approximate 1280-acre drilling and spacing unit for Sections 25 and 36, Township 6 South, Range 95 West, 6th P.M., and approve up to 40 vertical, horizontal and directional wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and Dakota Formations.
FINDINGS
The Commission finds as follows:
1. WPX Energy Rocky Mountain, LLC (Operator No. 96850) (“WPX” or “Applicant”) 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. Sections 25 and 36, Township 6 South, Range 95 West, 6th P.M. are subject to Rule 318.a. for the Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and Dakota Formations.
5. On February 5, 2015, WPX, by its attorneys, filed a verified amended application (“Application”) pursuant to §34-60-116 C.R.S. for an order to establish an approximate 1280-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to 40 vertical, horizontal and directional wells within the unit, for the production of oil, gas and associated hydrocarbons from the Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and Dakota Formations, with the productive interval of the wellbore(s) to be located no closer than 600 feet from the eastern and western boundaries of the unit, not less than 300 feet from the northern and southern boundaries of the unit, and no closer than 150 feet from the productive interval of any other wellbore located in the unit producing from the Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and/or Dakota Formations, with the wells to be drilled from no more than one well pad on any given quarter-quarter section, without exception being granted by the Director:
Township 6 South, Range 95 West, 6th P.M.
Section 25: All
Section 36: All
6. On February 9, 2015, WPX, 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. On January 9, WPX and the Bureau of Land Management (“BLM”) agreed that the Application Lands contain federal leased and/or unleased minerals. As such, WPX agreed to submit a Communitization Agreement (“CA”) to the BLM for any existing wells within 60 days of the entry of this order. WPX also agreed to submit a CA to the BLM within 90 days from the date of first production (as defined in the COGCC Rules) from the initial well drilled within the drilling and spacing unit.
8. Land testimony and exhibits submitted in support of the Application by Christopher M. Walsh, Senior Staff Landman for WPX, showed that WPX holds oil and gas leasehold interests and has a right to drill in the Application Lands.
9. Geologic testimony and exhibits submitted in support of the Application by Laura Levorsen, Petroleum Geologist for WPX, showed that the Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and Dakota Formations are present throughout the Application Lands, are thousands of feet thick, produce from multiple zones, and are generally of uniform thickness throughout the Application Lands.
10. Engineering testimony and exhibits submitted in support of the Application by Tyler Peters, Senior Reservoir Engineer for WPX, showed that the drainage area for analog horizontal Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and Dakota Formations wells are estimated at 160 acres in each of five potentially productive zones, and an appropriate 1280-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by 40 vertical, directional, and horizontal wells producing oil, gas and associated hydrocarbons from the Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and Dakota Formations.
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. WPX 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 1280-acre drilling and spacing unit for Sections 25 and 36, Township 6 South, Range 95 West, 6th P.M., and approve up to 40 vertical, horizontal and directional wells within the unit, for the production of oil, gas and associated hydrocarbons from the Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and Dakota Formations.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 1280-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 40 vertical, horizontal and directional wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and Dakota Formations:
Township 6 South, Range 95 West, 6th P.M.
Section 25: All
Section 36: All
2. The productive interval of the wellbore(s) shall be located no closer than 600 feet from the eastern and western boundaries of the unit, not less than 300 feet from the northern and southern boundaries of the unit, and no closer than 150 feet from the productive interval of any other wellbore located in the unit producing from the Mancos (including the Sego Sandstone), Niobrara, Frontier, Mowry, and/or Dakota Formations, without exception being granted by the Director.
3. The proposed wells shall be drilled on a common or existing well pad or from no more than one well pad per quarter-quarter section within the approximate 1280-acre drilling and spacing unit, or on adjacent lands with the consent of the landowner.
3. WPX shall submit a Communitization Agreement (“CA”) to the BLM for any existing wells within 60 days of the entry of this order. WPX shall also submit a CA to the BLM within 90 days of the date of first production (as defined by in the COGCC Rules) from the initial well within 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 18th day of March, 2015, as of March 2, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By__________________________________
Jill Dorancy, Acting Secretary