BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA

Transcription

1 BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA APPLICANT: CONTINENTAL RESOURCES, INC. CAUSE CD NO. RELIEF SOUGHT: MULTIUNIT HORIZONTAL WELL LANDS COVERED: SECTION 16, TOWNSHIP 7 NORTH, RANGE 6 WEST, GRADY COUNTY, OKLAHOMA AND SECTION 9, TOWNSHIP 7 NORTH, RANGE 6 WEST, GRADY COUNTY, OKLAHOMA ORDER NO INTERIM ORDER OF THE COMMISSION This cause came on for hearing before Michael Norris, Administrative Law Judge for the Corporation Commission of Oklahoma, on the 29" day of January, 2013, in the Commission Courtroom, Jim Thorpe Building, Oklahoma City, Oklahoma, pursuant to notice given as required by law and the Rules of the Commission, for the purpose of hearing, taking testimony and reporting her/his findings and recommendations to the Commission. David E. Pepper, Attorney, appeared for the Applicant, Continental Resources, Inc.; and Charles Helm, Attorney, appeared for Chieftain Royalty Company. The Administrative Law Judge heard the cause and filed a report with the Commission, which report has been considered, and the Commission therefore finds as follows: FINDINGS 1. That this is the Application of Continental Resources, Inc. requesting the Corporation Commission of Oklahoma to enter an order, to be effective as of the date of the execution thereof or as of a date prior thereto, as follows: (i) Approving a multiunit horizontal well in the 640-acre drilling and spacing units formed for the Shale Reservoir described hereinafter in Section 16-7N-6W and Section 9-7N-6W, Grady County, Oklahoma, so as to allow such multiunit horizontal well to be drilled as described below:

2 INTERIM ORDER OF THE COMMISSION PAGE NO.2 Applicant, as operator, is proposing to drill a multiunit horizontal well in the lands involved herein in the Shale Reservoir covered hereby, with a portion of the completion interval of such multiunit horizontal well to be located in one or more of the 640-acre drilling and spacing units formed for the separate common sources of supply involved herein in said Section 16 and with a portion of such completion interval to be located in one or more of the 640-acre drilling and spacing units formed for the separate common sources of supply involved herein in said Section 9. Applicant is proposing to drill the multiunit horizontal well involved herein at the following location: A surface location being not closer than 150 feet from the south line and not closer than 1,320 feet from the west line of Section 16-7N-6W to subsurface locations of such well's entry into and such well's exit and potential exit from each of the Mississippi Lime, Woodford and Hunton separate common sources of supply being as follows: Section 16-7N-6W Point of Entry: First Perforation: Last Perforation: Not closer than 0 feet from the south line and 1,320 feet from the west line of said Section 16-7N-6W, Grady County, Oklahoma, Not closer than 150 feet from the south line and 1,320 feet from the west line of said Section W, Grady County, Oklahoma, Not closer than 0 feet from the north line and 1,320 feet from the west line of said Section 16-7N-6W, Grady County, Oklahoma, Subsurface location of the Exit from said Section 16: Section 9-7N-6W Not closer than 0 feet from the north line and not closer than 1,320 feet from the west line of said Section 16-7N-6W, Grady County, Oklahoma (with the horizontal portion or lateral of the borehole of such multiunit horizontal well at this point entering said Section 9-7N-6W, Grady County, Oklahoma), Point of Entry: First Perforation: Last Perforation: Not closer than 0 feet from the south line and not closer than 1,320 feet from the west line of said Section Section 9-7N-6W, Grady County, Oklahoma Not closer than 0 feet from the south line and not closer than 1,320 feet from the west line of said Section 9-7N-6W, Grady County, Oklahoma Not closer than 150 feet from the north line and not closer than 1,320 feet from the west line of said Section W, Grady County, Oklahoma

3 INTERIM ORDER OF THE COMMISSION PACE NO.3 Terminus or End Point: Not closer than 0 feet from the north line and not closer than 1,320 feet from the west line of said Section 9-7N-6W, Grady County, Oklahoma Applicant proposes to complete such multiunit horizontal well in and to produce hydrocarbons from the separate common sources of supply involved herein. Applicant intends to run casing in the horizontal portion or lateral of the borehole of the multiunit horizontal well involved herein and to cement such casing so as to cover and isolate the first and last perforations in such horizontal portion or lateral. Applicant is proposing to drill the multiunit horizontal well involved herein to a total measured depth of approximately 20,814 feet and is proposing to have a completion interval in such multiunit horizontal well of approximately 7,305 feet. The proposed multiunit horizontal well involved herein is necessary in order to prevent waste and to protect the correlative rights of the owners of oil and gas rights in the units involved herein. 2. That the Commission has jurisdiction over the subject matter herein: (a) subject area; (b) not receive mailings; That notice was given to all parties entitled to share in production from the That a diligent inquiry was made by Applicant to locate those parties who did (c) That an examination of all available sources was conducted to determine the appropriate address of each party; Commission. (d) Notice was given in all respects as required by law under the Rules of the 3. That Applièant owns an oil and gas interest in the area covered by the application in this cause, which entitles Applicant to drill for and produce oil and gas from the lands covered by the application. 4. That by Order No , this Commission formed 640-acre drilling and spacing units in Sections 16-7N-6W & 9-7N-6W, Grady County, Oklahoma for the Mississippi Lime, Woodford and 1-lunton common sources of supply. 5. The Applicant presented evidence that the Woodford common source of supply in the lands covered hereby is a shale formation, The Mississippi Lime covered hereby is located immediately above the Woodford common source of supply and the Hunton common source of supply in the lands covered hereby is located immediately below the Woodford common source of supply. In said Section 16-7N-6W, the top of the Mississippi Lime common source of supply is at

4 MULTIUNIT HORIZONTAL WELL PAGE NO. 4 an approximate depth of 13,066 feet, the top of the Woodford common source of supply is at an approximate depth of 13,250 feet, the top of the Hunton common source of supply is at an approximate depth of 13,397 feet. In Section 9-7N-6W, the top of the Mississippi Lime is at an approximate depth of 12,912 feet, the top of the Woodford common source of supply is at an approximate depth of 13,095 feet, the top of the Hunton common source of supply is at an approximate depth of 13,237 feet. The Mississippi Lime and Hunton separate common sources of supply may be inadvertently encountered in the drilling of the lateral of a horizontal well in the lands involved herein in the Woodford common source of supply when such well drills out of or exits such shale formation. The Mississippi Lime and Hunton separate common sources of supply are Associated Common Sources of Supply in regard to the Woodford common source of supply. The Shale Reservoir involved herein covers and includes all three of the separate common sources of supply named above. 6. That the Applicant presented the following evidence: a. That the surface location and the vertical portion of the well was selected based on geological and geophysical and engineering 'analysis which indicated that the proposed location for the vertical portion of the well should not encounter any over-pressured reservoirs which would impair the drilling of the vertical portion. b. That the geological and geophysical analysis indicates that there could be a fault in the approximate center of Section 9, at which time the Applicant will only drill to the approximate center of Section 9. The Applicant has set forth the allocation factor based upon the premise that there is a fault in the center of Section 9. C. That the proposed weilbore would prevent waste by allowing an additional 800 feet of reservoir to be fracture stimulated and produced, which said gas would not be otherwise recovered by conventional wells. d. That the proposed operation would reduce environmental issues by having only one surface location, one lease road, and only one area to be utilized for pipelines and tanks. e. That the proposed operation would reduce costs by essentially allowing the drilling of one weilbore at a lesser expense as compared to the cost of two weilbores. f. Applicant anticipates that approximately 63.24% of the completion interval of such multiunit horizontal well will be located in said Section 16 and approximately 36.76% of such completion interval will be located in said Section 9, with the cost of and the production and proceeds from such multiunit horizontal to be allocated between the affected units involved herein based on such percentages. The actual allocation of such costs, production and proceeds may vary

5 MULTIUNIT HORIZONTAL WELL PAGE NO. 5 depending upon the results of the multiunit horizontal well involved herein. 7. That in the interest of securing the greatest ultimate recovery from the reservoir or the prevention of waste and the protection of correlative rights, the Application should be granted as set forth herein. IIIJ 1 om IT IS THEREFORE ORDERED by the Corporation Commission of Oklahoma as follows: 1. The requested relief set forth hereinabove is granted. That a multiunit horizontal well is approved in the 640-acre drilling and spacing units formed for the Shale Reservoir described hereinabove in Section 16-7N-6W, Grady County, Oklahoma and Section 9-7N-6W, Grady County, Oklahoma at the location and distances as set forth hereinabove. 3. This cause is continued until December 9, 2013, to determine the results from the drilling of the well and the actual allocation factor. DONE AND PERFORMED this,? dayof,2013. CORPORATION MMISSIOZ OF OKLAHOMA -;L PATRICE DOUGLAS, Chairman,\ILSI: - Peggy Mi II..ecretar ROB ANTHONY, Vice Chai an 'V. 4'.'ak, DANA L. MURPHY, Commissicer ff

6 MULTIUNIT HORIZONTAL WELL PAGE NO. 6 REPORT OF THE ADMINISTRATIVE LAW JUDGE The foregoing findings and order are the report and recommendations of the Administrative Law Judge. Approved: Administrative Law Judge ( L Technical Reviewer Date Zhu, Date 3