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 FORMATION, UNNAMED FIELD, LA PLATA COUNTY, COLORADO |
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CAUSE NO. 558
DOCKET NO. 170100049
TYPE: SPACING
ORDER NO. 558-1 |
REPORT OF THE COMMISSION
The Commission heard this matter on March 20, 2017, at the Larimer County Conference Center at The Ranch, First National Bank Building, 5280 Arena Circle, Loveland, Colorado, upon application for an order to establish an approximate 1,160-acre drilling and spacing unit for portions of Sections 27, 28, and 29, Township 33 North, Range 7 West, N.M.P.M., and approve up to 13 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Mancos Formation.
FINDINGS
The Commission finds as follows:
1. WPX Energy Production, LLC (Operator No. 96705) (“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 27, 28, and 29, Township 33 North, Range 7 West, N.M.P.M., are subject to this Rule for the Mancos Formation.
5. On December 1, 2016, WPX, by its attorneys, filed a verified application (“Application”) pursuant to §34-60-116, C.R.S., for an order to establish an approximate 1,160-acre drilling and spacing unit for the below-described lands (“Application Lands”) and to approve up to 13 horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Mancos Formation, with the productive interval of the wellbore to be located no closer than 600 feet from the unit boundaries, and no closer than 250 feet from the productive interval of any other wellbore located in the unit, without exception being granted by the Director:
Township 33 North, Range 7 West, N.M.P.M.
Section 27: W½
Section 28: E½, NE¼NW¼, S½NW¼, SW¼
Section 29: S½NE¼, SE¼
Applicant stated that the proposed wells will be drilled from no more than two multi-well pads within the unit.
6. On February 27, 2017, 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 Brennan West, Landman for WPX, showed that WPX holds oil and gas leasehold interests and has a right to drill in the Application Lands. Land testimony further showed that the Bureau of Land Management and the Southern Ute Indian Tribe both submitted letters of concurrence in support of the application.
8. Geologic testimony and exhibits submitted in support of the Application by Renee M. Wild, Geologist for WPX, showed that the Mancos Formation is present throughout the Application Lands, is approximately 1,570 feet thick, and is generally of uniform thickness throughout the Application Lands.
9. Engineering testimony and exhibits submitted in support of the Application by Frank Kubes, Senior Reservoir Engineer for WPX, showed that the drainage area for analog horizontal Mancos Formation wells is estimated at 80 acres, and an appropriate 1,160-acre drilling and spacing unit is therefore not less than the maximum area than can be efficiently, economically and effectively drained by a horizontal well producing oil, gas and associated hydrocarbons from the Mancos Formation.
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. WPX agreed to be bound by oral order of the Commission.
12. 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 establishing an approximate 1,160-acre drilling and spacing unit for portions of Sections 27, 28, and 29, Township 33 North, Range 7 West, N.M.P.M., and approve up to 13 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Mancos Formation.
ORDER
IT IS HEREBY ORDERED:
1. An approximate 1,160-acre drilling and spacing unit for the below-described lands, is hereby established, and a total of up to 13 horizontal wells within the unit, are hereby approved, for the production of oil, gas and associated hydrocarbons from the Mancos Formation:
Township 33 North, Range 7 West, N.M.P.M.
Section 27: W½
Section 28: E½, NE¼NW¼, S½NW¼, SW¼
Section 29: S½NE¼, SE¼
2. The productive interval of the wellbore will be located no closer than 600 feet from the unit boundaries, and no closer than 250 feet from the productive interval of any other wellbore located in the unit, unless the Director grants an exception.
3. The proposed wells shall be located on no more than two multi-well pads within the drilling and spacing unit, unless the Director grants and exception.
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 28th day of March, 2017, as of March 20, 2017.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By_____________________________________
Peter Gowen, Acting Secretary