BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

 

IN THE MATTER OF THE AMENDED APPLICATION OF WPX ENERGY ROCKY MOUNTAIN, LLC FOR AN ORDER TO ESTABLISH AN APPROXIMATE 362.73-ACRE DRILLING AND SPACING UNIT IN SECTIONS 21 AND 28, TOWNSHIP 6 SOUTH, RANGE 96 WEST, 6TH P.M., FOR THE MANCOS, NIOBRARA, FRONTIER, MOWRY AND DAKOTA FORMATIONS, UNNAMED FIELD, GARFIELD COUNTY, COLORADO

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CAUSE NO. 547

 

DOCKET NO. 1309-SP-1167

 

ORDER NO. 547-3

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on September 16, 2013, at the offices of the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Denver, Colorado, upon application for an order to establish an approximate 362.73-acre drilling and spacing unit for Sections 21 and 28, Township 6 South, Range 96 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 Mancos, Niobrara, Frontier, Mowry and Dakota Formations.

 

FINDINGS

 

The Commission finds as follows:

 

1.         WPX Energy Rocky Mountain, LLC  (“WPX” 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 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 21 and 28, Township 6 South, Range 96 West, 6th P.M. are subject to Rule 318.a for the Mancos, Niobrara, Frontier, Mowry and Dakota Formations.

 

5.         On July 18, 2013 (Amended August 16, 2013), WPX, by its attorneys, filed with the Commission a verified amended application (“Amended Application”) for an order to establish an approximate 362.73-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 Mancos, Niobrara, Frontier, Mowry and Dakota Formations, with the treated interval of the wellbore to be located no closer than 600 feet from the unit boundaries and no closer than 150 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director:

 

Township 6 South, Range 96 West, 6th P.M.

Section 21:      Lots 1-5, E½ NW¼, NE¼ SW¼

Section 28:      Lots 3-4

 

6.         On September 3, 2013, 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 September 10, 2013, the Bureau of Land Management (“BLM”) filed a Protest to the Amended Application.  BLM requested 600 foot boundary setbacks.

 

8.         On September 11, 2013, WPX, by its attorneys, requested to maintain 600 foot setbacks from the unit boundaries, consistent with Rule 318.a.

 

9.         On September 12, 2013, BLM withdrew its Protest in the matter.

 

10.       Land Testimony and exhibits submitted in support of the Application by Melanie Faith, Senior Landman for WPX, showed that the mineral ownership is federal and that WPX has leasehold ownership in a substantial portion of the Application Lands.

 

11.       Geologic Testimony and exhibits submitted in support of the Application by Laura Levorsen, Petroleum Geologist for WPX, showed that the Mancos Group is lithologically and stratigraphically consistent as well as laterally continuous and that offset wells can be used as geologic analogies to the Application Lands.  The combination of seismic interpretation and regional cross sections confirm that the Mancos Group exists under the entirety of the Application Lands.

 

12.       Engineering Testimony and exhibits submitted in support of the Application by
Tyler Peters, Reservoir Engineer for WPX, showed an Original Gas In Place value of 53 BCF was calculated per section.  Assuming a recovery factor of 50%, which is reasonable for shale gas reservoirs, there are 26.5 BCF of recoverable reserves per section. With an estimated recovery of 7 BCF per well, there will need to be 4 wells per section to efficiently recover the reserves.  Testimony concluded WPX plans 5,000 foot lateral wellbore lengths, showing well spacing of 160-acres (1,320 feet) will prevent waste and protect correlative rights.

 

13.       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.

 

14.       WPX agreed to be bound by oral order of the Commission. 

 

15.       Based on the facts stated in the verified Application, having resolved all protests, and based on the Hearing Officer review of the Application under Rule 511, the Commission should enter an order to establish an approximate 362.73-acre drilling and spacing unit for Sections 21 and 28, Township 6 South, Range 96 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 Mancos, Niobrara, Frontier, Mowry and Dakota Formations.

 

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 362.73-acre drilling and spacing unit for the below-described lands, is hereby established, and up to two horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Mancos, Niobrara, Frontier, Mowry and Dakota Formations, with the treated interval of the wellbore to be located no closer than 600 feet from the unit boundaries and no closer than 150 feet from the treated interval of any other wellbore located in the unit, without exception being granted by the Director:

 

Township 6 South, Range 96 West, 6th P.M.

Section 21:      Lots 1-5, E½ NW¼, NE¼ SW¼

Section 28:      Lots 3-4

 

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 30 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  11th  day of October, 2013, as of September 16, 2013.

           

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary