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

 

IN THE MATTER OF THE APPLICATION OF WPX ENERGY ROCKY MOUNTAIN, LLC FOR AN ORDER TO ESTABLISH AN APPROXIMATE 2499.80-ACRE DRILLING AND SPACING UNIT FOR SECTIONS 31 AND 32, TOWNSHIP 6 SOUTH, RANGE 95 WEST, 6TH P.M. AND SECTIONS 5 AND 6, TOWNSHIP 7 SOUTH, RANGE 95 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. 1306-SP-103

 

ORDER NO. 547-5

PREVIOUS ORDER: 440-68

 

CORRECTED

 

REPORT OF THE COMMISSION

 

            The Commission heard this matter on June 17, 2013, at the Two Rivers Convention Center, 159 Main Street, Grand Junction, Colorado, upon application for an order to establish an approximate 2499.80-acre drilling and spacing unit for Sections 31 and 32, Township 6 South, Range 95 West, 6th P.M. and Sections 5 and 6, Township 7 South, Range 95 West, 6th P.M., and approve up to eight horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Mancos Group 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 31 and 32, Township 6 South, Range 95 West, 6th P.M. and Sections 5 and 6, Township 7 South, Range 95 West, 6th P.M. are subject to this Rule for the Mancos, Niobrara, Frontier, Mowry and Dakota Formations (collectively “Mancos Group”).

 

5.         On April 18, 2013, WPX, by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an order to establish an approximate 2499.80-acre drilling and spacing unit for the below-described lands (“Application Lands”), and approve up to eight horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Mancos Group, 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 95 West, 6th P.M.

            Section 31:      Lots 1-12, SE¼ (All)

            Section 32:      All

 

            Township 7 South, Range 95 West, 6th P.M.

            Section 5:        Lots 1-11, SE¼ SW¼, SE¼ (All)

            Section 6:        Lots 1-11, SE¼ NW¼, S½ NE¼, E½ SW¼, NW¼ SE¼ (All)

 

The proposed wells shall be located on no more than one wellpad per quarter quarter section within the drilling and spacing unit.

 

6.         On June 4, 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.         Land testimony and exhibits submitted in support of the Application by Maxwell Faith, Senior Landman for WPX, showed the surface of the Application Lands consists of Federal and Fee, the mineral ownership of the Application Lands is held in Federal and Fee, and that WPX owns a partial leasehold ownership interest in the Application Lands.

 

8.         Geologic testimony and exhibits submitted in support of the Application by Ryan J. Kowalski, Petroleum Geologist for WPX, showed the Mancos Group is present throughout the Application Lands, is thousands of feet thick, and is generally of uniform thickness throughout the Application Lands.

 

9.         Engineering testimony and exhibits submitted in support of the Application by Tyler Peters, Senior Reservoir Engineer for WPX, showed the estimated ultimate recovery (“EUR”) from nearby horizontal Niobrara type wells was 7 BCF of gas at a 50% recovery factor, showing the economics of the project are sound.

 

10.       On June 12, 2013 an Administrative Hearing was held to receive supplemental 511 testimony regarding certain assumptions used in the engineering testimony.  After the hearing, Stuart Ellsworth, COGCC Engineering Manager, recommended approval of the application.

 

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 2499.80-acre drilling and spacing unit for Sections 31 and 32, Township 6 South, Range 95 West, 6th P.M. and Sections 5 and 6, Township 7 South, Range 95 West, 6th P.M., and approve up to eight horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Mancos Group Formations.

 

ORDER

 

IT IS HEREBY ORDERED:

 

1.         An approximate 2499.80-acre drilling and spacing unit for the below-described lands, is hereby established, and up to eight horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Mancos Group 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 95 West, 6th P.M.

            Section 31:      Lots 1-12, SE¼ (All)

            Section 32:      All

 

            Township 7 South, Range 95 West, 6th P.M.

            Section 5:        Lots 1-11, SE¼ SW¼, SE¼ (All)

            Section 6:        Lots 1-11, SE¼ NW¼, S½ NE¼, E½ SW¼, NW¼ SE¼ (All)

 

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  8th  day of July, 2013, as of June 17, 2013.

CORRECTED THIS 12th day of November, as of June 17, 2013.

           

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

 

 

                                                                        By____________________________________       

                                                                                    Robert J. Frick, Secretary