Source: http://cogcc.state.co.us/orders/orders/407/331.html
Timestamp: 2019-02-19 02:34:45
Document Index: 417570018

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

IN THE MATTER OF THE PROMULGATION ) CAUSE NO. 407
GOVERN OPERATIONS IN THE WATTENBERG ) ORDER NO. 407-331
This cause came on for hearing before the Commission at 9:00 a.m. on June 11, 2009, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to establish various drilling and spacing units and wellbore spacing units for certain lands located in Sections 7 and 18, Township 5 South, Range 66 West, 6th P.M., and to pool all nonconsenting interests for the development and operation of the Codell and Niobrara Formations.
4. On December 19, 1983, the Commission issued Order No. 407-1 (amended on 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, including Sections 7 and 18, Township 5 North, Range 66 West, 6th P.M., 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.
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, including Sections 7 and 18, Township 5 North, Range 66 West, 6th P.M., with the permitted well locations in accordance with the provisions of Order No. 407-1.
6. On April 27, 1998, 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 of the Cretaceous Age Formations from the base of the Dakota Formation to the surface. On December 5, 2005, Rule 318A. was amended to, among other things, allow interior infill and boundary wells to be drilled and wellbore spacing units to be established. Sections 7 and 18, Township 5 North, Range 66 West, 6th P.M. are subject to this Rule for the Codell and Niobrara Formations.
7. On April 21, 2009, Noble, by its attorneys, filed with the Commission a verified application for an order to establish two drilling and spacing units for the below-listed lands (to accommodate the below-listed wells), for the production of oil and associated hydrocarbons from the Codell and Niobrara Formations, and to pool all nonconsenting interests in those drilling and spacing units, for the development and operation of the Codell and Niobrara Formations:
Lundvall J #18-02D Well
SW½ NE¼ (approximately 80 acres)
Lundvall J #18-17D Well
NE¼ (approximately 160 acres)
Further, Noble requests an order to establish five approximately 160-acre wellbore spacing units for the below-listed lands (to accommodate the below-listed wells), for the production of oil and associated hydrocarbons from the Codell and Niobrara Formations, and to pool all nonconsenting interests in those wellbore spacing units, for the development and operation of the Codell and Niobrara Formations:
Lundvall J #18-18D Well
Lundvall J #18-21D Well
SW¼ NE¼, NW¼ SE¼,
NE¼ SW¼, and SE¼ NW¼
Lundvall J #18-22D Well
Lundvall J #18-27D Well
Lundvall J #18-28D Well
8. On May 29, 2009, 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 as is provided for by Rule 511.c. Sworn written testimony and exhibits were submitted in support of the application.
9. Testimony and exhibits submitted in support of the application showed that the seven wells described in Finding No. 7 have been drilled, but not yet produced. Additional testimony showed a list of all consenting and nonconsenting owners within the application lands, and that Noble has over 79% of the lands leased with unleased and nonconsenting interests which comprise an approximate 21% of the lands. Further testimony indicated that offers to lease or to participate were sent to the nonconsenting owners, and that said offers were sent via US Mail, at least 30 days prior to the June 11, 2009 hearing, to each nonconsenting owner. Testimony showed that the offers to lease/participate and the Authorizations for Expenditures were fair and reasonable, and similar to those prevailing in the area, and that Noble has complied with the requirements of Rule 530.a. and §34-60-117(7)(d), C.R.S.
10. Noble Energy, Inc. agreed to be bound by oral order of the Commission.
11. 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.c., the Commission should enter an order to establish various drilling and spacing units and wellbore spacing units for certain lands located in Sections 7 and 18, Township 5 South, Range 66 West, 6th P.M., and to pool all nonconsenting interests for the development and operation of the Codell and Niobrara Formations.
NOW, THEREFORE IT IS ORDERED, that two drilling and spacing units are hereby established for the below-listed lands (to accommodate the below-listed wells), for the production of oil and associated hydrocarbons from the Codell and Niobrara Formations, and that, 1. Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act of the State of Colorado, all the nonconsenting interests in said drilling and spacing units are hereby pooled, for the development and operation of the Codell and Niobrara Formations:
2. The production obtained from each drilling and 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 each drilling and spacing unit; each owner of an interest in each drilling and spacing unit shall be entitled to receive his/her share of the production of the well located on each drilling and spacing unit applicable to his interest in each drilling and spacing unit.
4. Any nonconsenting unleased mineral owner within each drilling and spacing unit shall be treated as the owner of the landowner's royalty to the extent of 12.5% of his/her record title interest, whatever that interest may be, until such time as the consenting owner recovers, only out of the 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, the nonconsenting mineral owner shall then own his/her proportionate 8/8ths share of the well, surface facilities and production, and then be liable for his/her proportionate share of further costs incurred in connection with the well as if he/she had originally agreed to the drilling.
5. The operator of any well drilled on the above-described units shall furnish all 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.
IT IS FURTHER ORDERED, that five approximate 160-acre wellbore spacing units are hereby established for the below-listed lands (to accommodate the below-listed wells), for the production of oil and associated hydrocarbons from the Codell and Niobrara Formations, and that, 6. Pursuant to the provisions of §34-60-116, C.R.S., as amended, of the Oil and Gas Conservation Act of the State of Colorado, all the nonconsenting interests in said wellbore spacing units are hereby pooled, for the development and operation of the Codell and Niobrara Formations:
7. The production obtained from each 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 each wellbore spacing unit; each owner of an interest in each wellbore spacing unit shall be entitled to receive his/her share of the production of the well located on each wellbore spacing unit applicable to his interest in each wellbore spacing unit.
8. Said owners are hereby deemed to have elected not to participate and shall therefore be deemed to be nonconsenting as to the well(s) and be subject to the penalties as provided for by §34-60-116 (7), C.R.S.
9. Any nonconsenting unleased mineral owner within each wellbore spacing unit shall be treated as the owner of the landowner's royalty to the extent of 12.5% of his/her record title interest, whatever that interest may be, until such time as the consenting owner recovers, only out of the 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, the nonconsenting mineral owner shall then own his/her proportionate 8/8ths share of the well, surface facilities and production, and then be liable for his/her proportionate share of further costs incurred in connection with the well as if he/she had originally agreed to the drilling.
10. The operator of any well drilled on the above-described units shall furnish all 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.