Source: http://cogcc.state.co.us/orders/orders/407/573.html
Timestamp: 2019-02-17 10:23:48
Document Index: 117605809

Matched Legal Cases: ['§ 34', '§ 34', '§34', '§34', '§34', '§34', '§34']

ORDER NO. 407-573
The Commission heard this matter on March 5, 2012, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, upon application for an order to pool all interests in an approximate 160-acre designated wellbore spacing unit for Section 30, Township 5 North, Range 63 West, 6th P.M., to accommodate the planned Rothe BB30-23 Well, for the development and operation of the Codell and Niobrara Formations.
4. On December 19, 1983, the Commission issued Order No. 407-1 (amended March 29, 2000), which among other things, established 80-acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation underlying certain lands with the unit to be designated by the operator drilling the first well in the quarter section. The permitted well shall be located in the center of either 40-acre tract within the unit with a tolerance of 200 feet in any direction. The operator shall have the option to drill an additional well on the undrilled 40-acre tract in each 80-acre drilling and spacing unit. Section 30, Township 5 North, Range 63 West, 6th P.M. is subject to this Order for the Codell Formation.
5. On February 19, 1992, the Commission issued Order No. 407-87 (amended August 20, 1993), which among other things, established 80-acre drilling and spacing units for the production of oil and/or gas from the Codell and Niobrara Formations underlying certain lands, with the permitted well locations in accordance with the provisions of Order No. 407-1. Section 30, Township 5 North, Range 63 West, 6th P.M. is subject to this Order for the Codell and Niobrara Formations.
6. On April 27, 1998, the Commission adopted Rule 318A., the Greater Wattenberg Well Location Rule (“GWA” rule), which, among other things, allowed certain drilling locations to be utilized to drill or twin a well, deepen a well or recomplete a well and to commingle any or all of the Cretaceous Age Formations from the base of the Dakota Formation to the surface. Pursuant to Rule 318A.j., Rule 318A. supersedes all prior Commission drilling and spacing orders affecting well location and density requirements of Greater Wattenberg Area wells. Section 30, Township 5 North, Range 63 West, 6th P.M. is subject to Rule 318A., for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations.
7. On January 5, 2012, Noble, by its attorneys, filed with the Commission a verified application (“Application”) for an order to pool all interests in an approximate 160-acre designated wellbore spacing unit for the below-described lands (“Application Lands”) for the planned Rothe BB30-23 Well (API No. 05-123-32152), for the development and operation of the Codell and Niobrara Formations, effective as of the earlier of the date of the Application, or the date that any of the costs specified in C.R.S. § 34-60-116(7)(b)(II) were first incurred for the drilling of the well, and to subject any nonconsenting interests to the cost recovery provisions of C.R.S. § 34-60-116(7):
Section 30: SE¼
8. On February 21, 2012, Noble, 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.
9. Testimony and exhibits submitted in support of the Application by Joseph Lorenzo, Senior Land Manager for Noble, showed that all nonconsenting interest owners were notified of the Application and received an Authority for Expenditure (“AFE”) and an offer to participate in the Well. Further testimony concluded that the AFE sent by the Applicant to the interest owners was a fair and reasonable estimate of the costs of the proposed drilling operation and was received at least 30 days prior to the March 5, 2012 hearing date.
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 to pool all interests in an approximate 160-acre designated wellbore spacing unit for Section 30, Township 5 North, Range 63 West, 6th P.M., to accommodate the planned Rothe BB30-23 Well, for the development and operation of the Codell and Niobrara Formations.
1. Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act, all interests in an approximate 160-acre designated wellbore spacing unit established for the below-described lands, are hereby pooled, for the development and operation of the Codell and Niobrara Formations, effective as of the earlier of the date of the Application, or the date that the costs specified in C.R.S. §34-60-116(7)(b)(II) are first incurred for the drilling of the horizontal well:
2. The production obtained from the designated wellbore spacing unit shall be allocated to each owner in the unit on the basis of the proportion that the number of acres in such tract bears to the total number of mineral acres within the designated wellbore spacing unit; each owner of an interest in the designated wellbore spacing unit shall be entitled to receive its share of the production of the Well located on the designated wellbore spacing unit applicable to its interest in the designated wellbore spacing unit.
3. The nonconsenting leased (working interest) owners must reimburse the consenting working interest owners for their share of the costs and risks of drilling and operating the Well (including penalties as provided by §34-60-116(7)(b), C.R.S.) out of production from the designated wellbore spacing unit representing the cost-bearing interests of the nonconsenting working interest owners as provided by §34-60-116(7)(a), C.R.S.
5. Each nonconsenting unleased owner within the designated wellbore spacing unit shall be treated as the owner of the landowner's royalty to the extent of 12.5% of its record title interest, whatever that interest may be, until such time as the consenting owners recover, only out of each nonconsenting owner's proportionate 87.5% share of production, the costs specified in §34-60-116(7)(b), C.R.S. as amended. After recovery of such costs, each unleased nonconsenting mineral owner shall then own its proportionate 8/8ths share of the Well, surface facilities and production, and then be liable for its proportionate share of further costs incurred in connection with the Well as if it had originally agreed to the drilling.
6. The operator of the well drilled on the above-described designated wellbore spacing unit shall furnish the nonconsenting owners with a monthly statement of all costs incurred, together with the quantity of oil and gas produced, and the amount of proceeds realized from the sale of production during the preceding month.