Source: http://cogcc.state.co.us/orders/orders/407/854.html
Timestamp: 2019-02-16 19:49:18
Document Index: 719083728

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

IN THE MATTER OF THE APPLICATION OF KERR-MCGEE OIL & GAS ONSHORE LP FOR AN ORDER TO POOL ALL INTERESTS IN SEVEN APPROXIMATE 240 TO 480-ACRE DESIGNATED WELLBORE SPACING UNITS ESTABLISHED FOR SECTIONS 7 AND 18, TOWNSHIP 3 NORTH, RANGE 66 WEST, 6TH P.M. AND SECTIONS 12 AND 13, TOWNSHIP 3 NORTH, RANGE 67 WEST, 6TH P.M., FOR THE CODELL AND NIOBRARA FORMATIONS, WATTENBERG FIELD, WELD COUNTY, COLORADO
DOCKET NO. 1307-UP-164
ORDER NO. 407-854
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 pool all interests in seven approximate 240 to 480-acre designated wellbore spacing units established for Sections 7 and 18, Township 3 North, Range 66 West, 6th P.M. and Sections 12 and 13, Township 3 North, Range 67 West, 6th P.M., to accommodate the Henrickson 13C-18HZ Well, the Henrickson Federal 14N-18HZ Well, the Henrickson 34N-18HZ Well, Henrickson Federal 13N-18HZ Well, the Henrickson Federal 35N-18HZ Well, the Henrickson Federal 14C-18HZ Well and the Henrickson Federal 36C-18HZ Well, for the development and operation of the Codell and Niobrara Formations.
4. On December 19, 1983, the Commission entered Order No. 407-1 (amended March 29, 2000) which, among other things, established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Codell Formation, 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. Sections 7 and 18, Township 3 North, Range 66 West, 6th P.M. and Sections 12 and 13, Township 3 North, Range 67 West, 6th P.M. are subject to this Order for the Codell Formation.
5. On February 19, 1992, the Commission entered Order No. 407-87 (amended August 20, 1993) which, among other things, established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations, with the permitted well locations in accordance with the provisions of Order No. 407-1. Sections 7 and 18, Township 3 North, Range 66 West, 6th P.M. and Sections 12 and 13, Township 3 North, Range 67 West, 6th P.M. are subject to this Order for the Codell and Niobrara Formations.
6. On April 27, 1988, the Commission adopted Rule 318A 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 Cretaceous Age Formations from the base of the Dakota Formation to the surface. Rule 318A supersedes all prior Commission drilling and spacing orders affecting well location and density requirements of Greater Wattenberg Area wells. On December 5, 2005, Rule 318A was amended, among other things, to allow interior infill and boundary wells to be drilled and wellbore spacing units to be established. On August 8, 2011, Rule 318A was again amended, among other things, to address drilling of horizontal wells. Sections 7 and 18, Township 3 North, Range 66 West, 6th P.M. and Sections 12 and 13, Township 3 North, Range 67 West, 6th P.M. are subject to Rule 318A for the Codell and Niobrara Formations.
7. On May 30, 2013, Kerr-McGee Oil & Gas Onshore LP (“Kerr-McGee” or “Applicant”), by its attorneys, filed with the Commission pursuant to §34-60-116 C.R.S., a verified application (“Application”) for an order to pool all interests in seven approximate 240 to 480--acre designated wellbore spacing units established for the below-described lands (“Application Lands”), 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 Henrickson 13C-18HZ Well, the Henrickson Federal 14N-18HZ Well, the Henrickson 34N-18HZ Well, Henrickson Federal 13N-18HZ Well, the Henrickson Federal 35N-18HZ Well, the Henrickson Federal 14C-18HZ Well, and the Henrickson Federal 36C-18HZ Well (“Wells”), and to subject any nonconsenting interests to the cost recovery provisions of C.R.S. §34-60-116(7):
Section 7: W½ SW¼
Section 18: W½ W½
Township 3 North, Range 67 West, 6th P.M.
Section 12: E½ SE¼
Section 13: E½ E½ (WSU#1,480-acre, Henrickson 34N-18HZ)
Section 18: W½ W½ (WSU#2, 240-acre, Henrickson 13C-18HZ)
Section 7: SW¼
Section 18: W½ (WSU#3, 480-acre, Henrickson Federal 13N-18HZ)
Section 18: W½ (WSU#4, 480-acre, Henrickson Federal 35N-18HZ)
Section 18: W½ (WSU#5, 480-acre, Henrickson Federal 14C-18HZ)
Section 7: E½ SW¼
Section 18: E½ W½ (WSU#6, 240-acre, Henrickson Federal 14N-18HZ)
Section 7: E½ SW¼, W½ SE¼
Section 18: E½ W½, W½ E½ (WSU#7, 240-acre, Henrickson Federal 36C-18HZ)
8. On July 12, 2013, Kerr-McGee requested and Commission staff granted a continuance to the September 16, 2013 hearing.
9. On August 6, 2013, Kerr-McGee, 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.
10. Land testimony and exhibits submitted in support of the Application by R.C. Kimball, Staff Landman for Kerr-McGee, showed that all nonconsenting interest owners were notified of the Application and received an Authority for Expenditure ("AFE") and 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 September 16, 2013 hearing date.
11. Land testimony showed the Applicant complied with the requirements of Rule 530, and is entitled to the cost recovery provisions pursuant to §34-60-116(7), C.R.S., for the Henrickson 13C-18HZ Well, the Henrickson Federal 14N-18HZ Well, the Henrickson 34N-18HZ Well, Henrickson Federal 13N-18HZ Well, the Henrickson Federal 35N-18HZ Well, the Henrickson Federal 14C-18HZ Well and the Henrickson Federal 36C-18HZ Well, but did not provide testimony for any subsequent wells.
13. Kerr-McGee agreed to be bound by oral order of the Commission.
14. 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 seven approximate 240 to 480-acre designated wellbore spacing units established for Sections 7 and 18, Township 3 North, Range 66 West, 6th P.M. and Sections 12 and 13, Township 3 North, Range 67 West, 6th P.M., to accommodate the the Henrickson 13C-18HZ Well, the Henrickson Federal 14N-18HZ Well, the Henrickson 34N-18HZ Well, Henrickson Federal 13N-18HZ Well, the Henrickson Federal 35N-18HZ Well, the Henrickson Federal 14C-18HZ Well and the Henrickson Federal 36C-18HZ 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 seven approximate 240 to 480-acre designated wellbore spacing units 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 any of the costs specified in C.R.S. §34-60-116(7)(b)(II) are first incurred for the drilling of the Henrickson 13C-18HZ Well, the Henrickson Federal 14N-18HZ Well, the Henrickson 34N-18HZ Well, Henrickson Federal 13N-18HZ Well, the Henrickson Federal 35N-18HZ Well, the Henrickson Federal 14C-18HZ Well and the Henrickson Federal 36C-18HZ Well:
ENTERED this 11th day of October, 2013, as of September 16, 2013.