HomeMy WebLinkAbout20171101.tiffBEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND
ESTABLISHMENT OF FIELD RULES TO GOVERN
OPERATIONS FOR THE CODELL AND NIOBRARA
FORMATIONS, WATTENBERG FIELD, WELD
COUNTY, COLORADO
CAUSE NO. 407
DOCKET NO. 170500275
TYPE: POOLING
NOTICE OF HEARING
TO ALL INTERESTED PARTIES AND TO WHOM IT MAY CONCERN:
APPLICATION LANDS
Township 6 North, Range 67 West, 6th P.M.
o Sec 5: W'/A, NE'/4
ection 16: All
RECEIVED
APR 042017
WELD COUNTY
COMMISSIONERS
APPLICATION
On March 2, 2017, Great Western Operating Company, LLC ("Great Western" or
"Applicant") filed a verified application pursuant to §34-60-116, C.R.S., for an order to:
1) Pool all interests in an approximate 1,120 -acre drilling and spacing unit
established for the Application Lands for the development and operation of the Niobrara
Formation; and
2) Subject any non -consenting interests to the cost recovery provisions of §34-60-
116(7), C.R.S., effective as of the earlier of the date of the Application, or the date that any of
the costs specified in §34-60-116(7)(b), C.R.S., are first incurred for the drilling of the Simpson FD
16-022HN (API No. 05-123-41402), Simpson FD 16-062HNX (API No. 05-123-41686), Simpson
FD 16-099HN (API No. 05-123-41674), Simpson FD 16-139HN (API No. 05-123-41680), Simpson
FD 16-142HC (API No. 05-123-41682), Simpson FD 16-179HNX (API No. Pending), Simpson FD
16-179HN (API No. 05-123-41683), Simpson FD 16-182HC (API No. Pending), Simpson FD 16-
219HN (API No. 05-123-41677), Simpson FD 16-222HN (API No. 05-123-41676), Simpson FD 16-
222HNX (API No. 05-123-41681), Simpson FD 16-259HC (API No. 05-123-41679), Simpson FD
16-262HN (API No. 05-123-41678), Simpson FD 16-299HN (API No. Pending), Simpson ED 16-
299HNX (API No. 05-123-41689), Simpson FD 16-302HC (API No. 05-123-44221), Simpson FD
16-302HN (API No. 05-123-41688), Simpson FD 16-339HN (API No. 05-123-44220), Simpson FD
16-342HNX (API No. Pending), Simpson FD 16-379HC (API No. 05-123-44218), and the Simpson
FD 16-379HN (API No. 05-123-41675).
APPLICABLE ORDERS AND RULES
(available online at: http://coacc.state.co.us, under "Regulation,"
then select "Orders" or "Rules")
On April 27, 1998, the Commission adopted Rule 318A, the Greater Wattenberg Area
Special Well Location, Spacing and Unit Designation Rule.
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2017-1101
LE 0329
• On February 19, 1992 (amended August 20, 1993), the Commission entered Order No.
407-87 which, among other things, established 80 -acre drilling and spacing units, for the
production of oil, gas, and associated hydrocarbons from the Codell-Niobrara
Formations, the Codell Formation, and the Niobrara Formation underlying certain lands,
including the Application Lands, with the permitted well locations in accordance with the
provisions of Order No. 407-1.
• On January 7, 2013, the Commission entered Order No. 407-741 which: 1) vacated the
approximate 80 -acre drilling and spacing units established by Order No. 407-87 for
Section 16, Township 6 North, Range 67 West, 6th P.M.; 2) established an approximate
640 -acre drilling and spacing unit consisting of Section 16, Township 6 North, Range 67
West, 6th P.M., and 3) approved up to seven horizontal wells within each unit, for the
development and operation of the Codell-Niobrara Formation, with the productive
interval of the horizontal wellbores to be no closer than 460 feet from the unit
boundaries, and no closer than 150 feet from the productive interval of any other
wellbore located in the unit, without exception being granted by the Director.
• On July 29, 2013, the Commission entered Order No. 407-848, which pooled all
interests in the approximate 640 -acre drilling and spacing unit established by Order No.
407-741 for Section 16, Township 6 North, Range 67 West, 6th P.M., for the
development and operation of the Codell-Niobrara Formation.
• On September 15, 2014, the Commission entered Order No. 407-1107, which applied
the cost recovery provisions of C.R.S. § 34-60-116(7) to any non -consenting owners
within the approximate 640 -acre drilling and spacing unit established by Order No. 407-
741 for Section 16, Township 6 North, Range 67 West, 6th P.M. for the DeTienne FD 16-
022HC Well (API No. 05-123-39630).
• On May 18, 2015, the Commission entered Order No. 407-1307 which, among other
things, 1) amended Order No. 407-741 to authorize no more than one horizontal well
within the approximate 640 -acre drilling and spacing unit established by such order, for
the development and operation of the Codell-Niobrara Formation, 2) established an
approximate 1,120 -acre drilling and spacing unit for the Application Lands, and 3)
approved up to 21 horizontal wells within the unit, for the production of oil, gas and
associated hydrocarbons from the Codell-Niobrara Formation.
• On July 20, 2015, the Commission entered Order No. 407-1324 which, among other
things, pooled all interests in the approximate 1120 -acre drilling and spacing unit
established by Order No. 407-1307 for portions of Sections 15 and 16, Township 6
North, Range 67 West, 6th P.M., for the drilling of the Simpson FD 16-039HC Well, the
Simpson FD 16-059HN Well, and the Simpson FD 16-062HN Well, for the development
and operation of the Codell and Niobrara Formations.
• On September 14, 2015, the Commission entered Order No. 407-1427 which, among
other things, applied the cost recovery provisions of §34-60-116(7), C.R.S., to additional
parties within the approximate 1120 -acre drilling and spacing unit established by Order
No. 407-1307 for Sections 15 and 16, Township 6 North, Range 67 West, 61" P.M., and
subjected any non -consenting interests to the cost recovery provisions of §34-60-116(7),
C.R.S., effective as of the earlier of the date of the Application, or the date that any of
the costs specified in §34-60-116(7)(b), C.R.S., were first incurred for the drilling of the
2
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f
Simpson FD 16-039HC Well, the Simpson FD 16-059HN Well, or the Simpson FD 16-
0621 -IN Well, for the development and operation of the Codell and Niobrara Formations.
NOTICE IS HEREBY GIVEN, pursuant to §§ 34-60-101 to -130, C.R.S. and the
Commission's Rules of Practice and Procedure, 2 CCR 404-1, that the Commission has
scheduled this matter for hearing on:
Date: May 1-2, 2017
Time: 9:00 a.m.
Place: Colorado Oil and Gas Conservation Commission
1120 Lincoln Street, Suite 801
Denver, CO 80203
Additional information about the hearing on this Application will be in the Commission's Agenda,
which is posted on the Commission website approximately 3 days before the hearing.
In accordance with the Americans with Disabilities Act, if any party requires special
accommodations as a result of a disability for this hearing, please contact Margaret Humecki at
(303) 894-2100 ext. 5139, prior to the hearing and arrangements will be made.
At hearing, the Commission will consider the Application and enter an order pursuant to
its authority under the statute. Any interested party desiring to protest or intervene should
file with the Commission a written protest or intervention in accordance with Rule 509,
no later than April 17, 2017. Such interested party shall, at the same time, serve a copy of the
protest or intervention to the person filing the application. One electronic
(cogcc.hearings_unit@state.co.us), one original and two copies shall be filed with the
Commission. Anyone who files a protest or intervention must be able to participate in a
prehearing conference during the week of April 17, 2017. Pursuant to Rule 511, if the
matter is uncontested, it may be approved without a hearing.
OIL AND GAS
OF STAT ' •F t OLORADO
By
Dated: March 27, 2017
r Gowen, Acting Secret
sion Attorneys for Applicant:
Jamie L. Jost
Kelsey H. Wasylenky
Jost Energy Law, P.C.
1401 17`x' Street, Suite 370
Denver, Colorado 80202
(720) 446-5620
jjost@jostenergylaw.com
kwasylenky@jostenergylaw.com
Lease in Place : YES
Lease #
Acres
Keep for Hearing Outcome/Minutes
File - No Action Needed
NO
Rei 1—W V--(&-")
3
ERVATION COMMISSION
(170500275)
What is this?
The attached is an Application that has been
filed with the Colorado Oil & Gas Conservation
Commission (COGCC). RECEIVED
Why am I receiving it?
MAR 1 4 2017
WELD COUNTY
COMMISSIONERS
COGCC Rules and Regulations, as well as
Colorado Statues, require that this Application
is sent to you.
What should I do if I need more information?
If you have any questions, you may contact the
individual below:
Philip Zaranka
Great Western Operating Company, LLC
303-398-0302
pzaranka@gwogco.com
BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF
GREAT WESTERN OPERATING COMPANY,
LLC FOR AN ORDER TO POOL ALL
INTERESTS IN AN APPROXIMATE 1,120 -
ACRE DRILLING AND SPACING UNIT
ESTABLISHED FOR PORTIONS OF
SECTIONS 15 AND 16, TOWNSHIP 6 NORTH,
RANGE 67 WEST, 6TH P.M., FOR THE
DRILLING OF TWENTY-ONE (21)
HORIZONTAL WELLS FOR THE
DEVELOPMENT OF THE CODELL AND
NIOBRARA FORMATIONS, WATTENBERG
FIELD, WELD COUNTY, COLORADO
YT.
?P t:102' "AR
CAUSE NO.
DOCKET NO.
TYPE: POOLING
APPLICATION
COMES NOW Great Western Operating Company, LLC (Operator No. 10110)
("Great Western" or "Applicant"), by its attorneys, Jost Energy Law, P.C., and makes
this application to the Oil and Gas Conservation Commission of the State of Colorado
("Commission") for an order to pool all interests within an approximate 1,120 -acre
drilling and spacing unit established for portions of Section 15 and all of Section 16,
Township 6 North, Range 67 West, 6th P.M., as defined below, and to subject any
nonconsenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., for the
drilling of the following twenty-one (21) horizontal wells: Simpson FD 16-022HN (API
No. 05-123 41402), Simpson FD 16-062HNX (API No. Pending), Simpson FD 16-
099HN (API No. Pending), Simpson FD 16-139HN (API No. 05-123-41680), Simpson
FD 16-142HC (API No. Pending), Simpson FD 16-179HNX (API No. Pending), Simpson
FD 16-179HN (API No. 05-123-41683), Simpson FD 16-182HC (API No. Pending),
Simpson FD 16-219HN (API No. 05-123 41677), Simpson FD 16-222HN (API No. 05-
123-41676), Simpson FD 16-222HNX (API No. Pending), Simpson FD 16-259HC (API
No. Pending), Simpson FD 16-262HN (API No. 05-123-41678), Simpson FD 16-299HN
(API No. Pending), Simpson FD 16-299HNX (API No. Pending), Simpson FD 16-302HC
(API No. Pending), Simpson FD 16-302HN (API No. 05-123-41688), Simpson FD 16-
339HN (API No. 05-123-44220), Simpson FD 16-342HNX (API No. Pending), Simpson
FD 16-379HC (API No. 05-123-44218), and the Simpson FD 16-379HN (API No. 05-
123-41675) (collectively, the "Wells") for the development and operation of the Codell
and Niobrara Formations on the following described lands:
Township 6 North, Range 67 West, 6th P.M.
Section 15: W%, NE%
Section 16: All
1,120 acres, more or less, Weld County, Colorado
f
Hereinafter "Application Lands"
In support thereof, Applicant states and alleges as follows:
1. Applicant is a limited liability company duly authorized to conduct
business in the State of Colorado, and is a registered operator in good standing with the
Commission.
2. Applicant owns certain leasehold interests or has the right to
operate leasehold interests in the Application Lands.
3. 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 permitted well locations in accordance with the
provisions of Order No. 407-1.
4. 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 allow interior infill and boundary wells to be drilled
and wellbore spacing units to be established. On August 8, 2011, Rule 318A was
amended to, among other things, address drilling of horizontal wells but did not prohibit
the establishment of drilling and spacing units within the Greater Wattenberg Area. The
lands encompassing the Application Lands are subject to Rule 318A for many of the
wells drilled and producing in the Codell and Niobrara Formations.
5. On January 7, 2013, the Commission entered Order No. 407-741
which: 1) vacated the approximate 80 -acre drilling and spacing units established by
Order No. 407-87 for Section 16, Township 6 North, Range 67 West, 6th P.M.; 2)
established an approximate 640 -acre drilling and spacing unit consisting of Section 16,
Township 6 North, Range 67 West, 6th P.M., and 3) approved up to seven horizontal
wells within each unit, for the development and operation of the Codell-Niobrara
Formation, with the productive interval of the horizontal wellbores to be no closer than
460 feet from the unit boundaries, and no closer than 150 feet from the productive
interval of any other wellbore located in the unit, without exception being granted by the
Director.
6. On July 29, 2013, the Commission entered Order No. 407-848,
which pooled all interests in the approximate 640 -acre drilling and spacing unit
established by Order No. 407-741 for Section 16, Township 6 North, Range 67 West,
6th P.M., for the development and operation of the Codell-Niobrara Formation.
t
7. On September 15, 2014, the Commission entered Order No. 407-
1107, which applied the cost recovery provisions of C.R.S. § 34-60-116(7) to any non -
consenting owners within the approximate 640 -acre drilling and spacing unit established
by Order No. 407-741 for Section 16, Township 6 North, Range 67 West, 6th P.M. for
the DeTienne FD 16-022HC Well (API No. 05-123-39630).
8. On May 18, 2015, the Commission entered Order No. 407-1307
which, among other things, 1) amended Order No. 407-741 to authorize no more than
one horizontal well within the approximate 640 -acre drilling and spacing unit established
by such order, for the development and operation of the Codell-Niobrara Formation, 2)
established an approximate 1,120 -acre drilling and spacing unit for the Application
Lands, and 3) approved up to 21 horizontal wells within the unit, for the production of oil,
gas and associated hydrocarbons from the Codell-Niobrara Formation.
9. On July 20, 2015, the Commission entered Order No. 407-1324
which, among other things, pooled all interests in the approximate 1120 -acre drilling and
s acing unit established by Order No. 407-1307 for portions of Sections 15 and 16,
Township 6 North, Range 67 West,
p 6th P.M. for the drilling of the Simpson FD 16
,
039HC Well, the Simpson FD 16-059HN Well, and the Simpson FD 16-062HN Well, for
the development and operation of the Codell and Niobrara Formations.
10. On September 14, 2015, the Commission entered Order No. 407-
1427 which, among other things, applied the cost recovery provisions of §34-60-116(7),
C.R.S., to additional parties within the approximate 1120 -acre drilling and spacing unit
established by Order No. 407-1307 for Sections 15 and 16, Township 6 North, Range
o
67 West, 6th P.M., and subjected any non -consenting interests to the cost recovery
provisions of §34-60-116(7), C.R.S., effective as of the earlier of the date of the
re
Application, or the date that any of the costs specified in §34-60-116(7)(b), C.R.S.,D 1 e
first incurred for the drilling of the Simpson FD 16-039HC Well, the Simpson FD -
059HN Well, or the Simpson FD 16-062HN Well, for the development and operation
f
the Codell and Niobrara Formations.
11. Concurrent with this filing, Applicant filed an Application for an order
to authorize up to twenty-four (24) horizontal wells in the approximate 1,120 -acre drilling
and spacing unit established by Order No. 407-1307 for the Application Lands for the
production, development and operation of oil, gas and associated hydrocarbons from
the Codell and Niobrara Formations.
12. Applicant, pursuant to Commission Rule 530 and/or the provisions of
C.R.S. §34-60-116(6) and (7), hereby requests an order to pool all interests in an the
approximate 1,120 -acre drilling and spacing unit established for the Application Lands for
the development and operation of the Niobrara and Codell Formations, and to subject any
nonconsenting interests to the cost recovery provisions of §34-60-116(7), C.R.S., effectie
as of the earlier of the date of this Application, or the date that the costs specified in C.R.S.
§ 34-60-116(7)(b) are first incurred for the drilling of the Wells in the drilling and spacing
unit for the development of the Niobrara and Codell Formations.
13. Applicant certifies that copies of this Application will be served on all
persons owning an interest in the mineral estate of the tracts to be pooled within seven (7)
days of the date hereof, as required by Rule 503.e., and that at least thirty-five (35) days
prior to the hearing on this matter, each such interest owner not already leased
r
voluntarily pooled will be offered the opportunity to lease, or to participate in the drilling of
the Wells, and will be provided with the information required by Rule 530 as applicable.
14. In order to allow for more efficient reservoir drainage, prevent
waste, assure a greater ultimate recovery of hydrocarbons, and to protect correlative
rights, and all interests in the 1,120 -acre drilling and spacing unit should be pooled for
the orderly development and operation of the Codell and Niobrara Formations, including
any non -consenting interests therein.
WHEREFORE, Applicant requests that this matter be set for hearing in
May 2017, that notice be given as required by law, and that upon such hearing, the
Commission enter its order:
A. Pooling all interests in an approximate 1,120 -acre drilling and
spacing unit established for the Application Lands for the development and operation of
the Niobrara and Codell Formations, effective as of the earlier of the date of the
Application, or the date that any of the costs specified in §34-60-116(7)(b)(II), C.R.S.,
are first incurred for the drilling of the following wells within the drilling and spacing
nit:
Simpson FD 16-022HN (API No. 05-123-41402), Simpson FD 16-062HNX (API No.
Pending), Simpson FD 16-099HN (API No. Pending), Simpson FD 16-139HN (API No.
05-123-41680), Simpson FD 16-142HC (API No. Pending), Simpson FD 16-179HNX
(API No. Pending), Simpson FD 16-179HN (API No. 05-123-41683), Simpson FD 16-
182HC (API No. Pending), Simpson FD 16-219HN (API No. 05-123 41677), Simpson
FD 16-222HN (API No. 05-123-41676), Simpson FD 16-222HNX (API No. Pending),
Simpson FD 16-259HC (API No. Pending), Simpson FD 16-262HN (API No. 05-123-
41678), Simpson FD 16-299HN (API No. Pending), Simpson FD 16-299HNX (API No.
Pending), Simpson FD 16-302HC (API No. Pending), Simpson FD 16-302HN (API No_
05-123-41688), Simpson FD 16-339HN (API No. 05-123-44220), Simpson FD th16
e
(API No. Pending), Simpson FD 16-379HC (API No. 05-123-44218), andhe
Simpson FD 16-379HN (API No. 05-123-41675).
B. Providing that the production obtained from the drilling and spacing
unit shall be allocated to each owner in the unit on the basis of the proportion that
the
t
the
number of acres in such tract bears to the total number of mineral acres with
drilling and spacing unit; each owner of an interest in the drilling and spacing unit shall
be entitled to receive its share of the production of the Wells located on the drilling and
spacing unit applicable to its interest in the drilling and spacing unit.
C. Providing that the nonconsenting working interest owners must
reimburse the consenting working interest owners for their share of the costs and risks
i ks
ks
of drilling and operating each of the Wells (including penalties as provided by §34-60-
k
116(7)(b), C.R.S.) out of production from the drilling and spacing unit representing the
cost -bearing interests of the nonconsenting working interest owners as provided by §34-
60-116(7)(a), C.R.S.
D. Providing that any unleased owners are deemed to have elected
not to participate and shall therefore be deemed to be nonconsenting as to the Wells
and be subject to the penalties as provided for by §34-60-116(7), C.R.S.
E. Providing that each nonconsenting unleased owner within the
drilling and 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.
F. Providing that the operator of the Wells drilled on the above -
described drilling and 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.
G. For such other findings and orders as the Commission may deem
proper or advisable in this matter.
Dated: March 2, 2017.
Respectfully submitted:
GREAT WESTERN OPERATING COMPANY, LLC
By:
Jost
elsey H. Wasylenky
Jost Energy Law, P.C.
Attorneys for Applicant
1401 17th Street, Suite 370
Denver, Colorado 80202
(720) 446-5620
Applicant's Address:
Great Western Operating Company, LLC
ATTN: Michael Tucker
1801 Broadway, Suite 500
Denver, CO 80202
VERIFICATION
STATE OF COLORADO
) ss.
CITY AND COUNTY OF DENVER
Michael Tucker, of lawful age, being first duly sworn upon oath, deposes and says
that he is the Senior Landman for Great Western Operating Company, LLC, and that he
has read the foregoing Application and that the matters therein contained are true to the
best of his knowledge, information and •-lief.
Michael Tucker
Senior Landman
Great Western Operating Company, LLC
rA
Subscribed and sworn to before me this a day of March 2017.
Witness my hand and official seal.
[SEAL]
i
JANET C WILLSON
NOTARY PUBLIC
STATE OF COLORADO
NOTARY ID 5 20024018949
MY COMMISSION EXPIRES JUNE 11, 2018
My commission expires: (eJlt aDlV
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Notar'vlPublic
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