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 FOR THE SEGO, MANCOS, NIOBRARA, FRONTIER, MOWRY AND DAKOTA FORMATIONS, GRAND VALLEY FIELD, GARFIELD COUNTY, COLORADO
CAUSE NO. 547
DOCKET NO. 150400200
REPORT OF THE COMMISSION
The Commission heard this matter on May 18, 2015, at the Aims Community College, Platte Building, 260 College Avenue, Fort Lupton, Colorado, upon application for an order to modify Order No. 547-7 and allow a 300 foot setback from the southern unit boundary for the approximate 473-acre exploratory drilling unit established for Sections 5 and 8, Township 7 South, Range 96 West, 6th P.M., for the production of oil, gas and associated hydrocarbons from the Sego, Mancos, Niobrara, Frontier, Mowry and Dakota Formations (“Deep Formations”).
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. On March 17, 2014, the Commission entered Order No. 547-7 which, among other things, established an approximate 473-acre exploratory drilling unit for Sections 5 and 8, Township 7 South, Range 96 West, 6th P.M., and approved up to 20 horizontal, vertical or directional wells to be drilled therein, for the production of oil, gas and associated hydrocarbons from the Deep Formations, with the productive interval of the permitted wellbore(s) to be located no closer than 600 feet from the outer boundaries of the unit, and not less than 300 feet from any other well or productive interval of a well producing from the same common source of supply, without exception from the Director.
5. On April 24, 2015, WPX, by its attorneys, filed a verified amended application (“Amended Application”) pursuant to §34-60-116 C.R.S., for an order to modify Order No. 547-7 to allow the productive interval of any permitted well to be located no closer than 300 feet from the southern boundary for the approximate 473-acre exploratory drilling unit established for the below described lands (“Application Lands”), and no closer than 150 feet from any other well or productive interval of a well producing from the same source of supply, for the production of oil, gas and associated hydrocarbons from the Deep Formations:
Township 7 South, Range 96 West, 6th P.M.
Section 5: W˝ SEĽ, E˝ SEĽ (also described as Lot 6, NEĽ SEĽ for 36.44 acres, more or less, and Lot 7, SEĽ SEĽ for 36.55 acres, more or less)
Section 8: W˝ NEĽ, SEĽ NEĽ, NEĽ NEĽ (also described as Lot 1 for 39.66 acres, more or less), and SEĽ
8. On April 24, 2015, WPX, by its attorneys, filed with the Commission a written request to approve the Amended Application based on the merits of the verified Amended Application and the supporting exhibits. Sworn written testimony and exhibits were submitted in support of the Amended Application.
9. On March 30, 2015, Chevron U.S.A., Inc. (“Chevron”) filed a protest to the original Application filed by WPX which had also requested a 300 foot setback from the northern boundary of the unit. On April 24, 2015, WPX filed the Amended Application withdrawing the request to reduce the setback on the northern boundary of the unit. On May 4, 2015, Chevron withdrew its protest.
9. Land testimony and exhibits submitted in support of the Amended 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.
10. Geologic testimony and exhibits submitted in support of the Amended Application by Trevor Gates, Petroleum Geologist for WPX, showed the Deep Formations are present throughout the Application Lands.
11. Engineering testimony and exhibits submitted in support of the Amended Application by Tyler Peters, Senior Reservoir Engineer for WPX, demonstrated that the estimated drainage area of analogue horizontal wells in the Deep Formations is 160 acres, and that the requested setback of 300 feet from the south boundary of the unit established for the Application Lands will promote efficient drainage, protect correlative rights, and prevent waste.
12. The above-referenced testimony and exhibits show that granting the Amended Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.
13. WPX agreed to be bound by oral order of the Commission.
IT IS HEREBY ORDERED:
Township 7 South, Range 96 West, 6th P.M.
Section 5: W˝SEĽ, E˝SEĽ (also described as Lot 6, NEĽSEĽ for 36.44 acres, more or less, and Lot 7, SEĽSEĽ for 36.55 acres, more or less)
Section 8: W˝NEĽ, SEĽNEĽ, NEĽNEĽ (also described as Lot 1 for 39.66 acres, more or less), and SEĽ
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 ______ day of June, 2015, as of May 18, 2015.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
Julie Murphy, Secretary