before the oil and gas conservation commission of …

{00648395.1} 1

BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

IN THE MATTER OF AN AMENDED APPLICATION BY VERDAD RESOURCES LLC FOR AN ORDER MODIFYING AN APPROXIMATE 320-ACRE DRILLING AND SPACING UNIT SUCH TO INCLUDE THE FORT HAYS AND CARLILE FORMATIONS, AND ESTABLISH WELL DENSITY WITH WELL LOCATION RULES APPLICABLE TO THE DRILLING OF WELLS AND PRODUCING OF OIL, GAS, AND ASSOCIATED HYDROCARBONS FROM THE NIOBRARA, FORT HAYS, CODELL, AND CARLILE FORMATIONS FOR THE W½ OF SECTION 31, TOWNSHIP 9 NORTH, RANGE 59 WEST, 6TH P.M., UNNAMED FIELD, WELD COUNTY, COLORADO

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Cause No. 535 Docket No. 200300093 Type: SPACING

AMENDED APPLICATION

Verdad Resources LLC (“Applicant” or “Verdad”), Operator No. 10651, by and through

its attorneys, Welborn Sullivan Meck & Tooley, P.C., respectfully submits this Amended Application to the Oil and Gas Conservation Commission of the State of Colorado (“Commission”) for an order modifying an approximate 320-acre drilling and spacing unit established by Order No. 535-744 for the W½ of Section 31, Township 9 North, Range 59 West, 6th P.M., such to include the Fort Hays and Carlile Formations, and to establish well density allowing a total of up to eight horizontal wells within the unit, with well location rules such that the treated interval of each wellbore within the unit be located no closer than 300 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located within the unit, unless an exception is granted by the Director. In support of its Amended Application, Applicant states as follows:

1. Applicant is a limited liability company duly authorized to conduct business in Colorado.

2. Applicant, owns leasehold interests and/or the right to drill, and is an Owner as

defined by Commission rules, in the following lands (“Application Lands”):

Township 9 North, Range 59 West, 6th P.M. Section 31: W½ Nearby Crossroads: Approximately 2 miles Nnortheast of CO HWY 390 and CR 98

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A reference map of the Application Lands is attached hereto.

3. Rule 318.a. of the Rules and Regulations of the Oil and Gas Conservation Commission requires that, on unspaced lands, wells drilled in excess of 2,500 feet in depth be located not less than 600 feet from any lease line, and located not less than 1,200 feet from any other producible or drilling oil or gas well when drilling to the same common source of supply.

4. On February 22, 2011, the Commission entered Order No. 535-3, which among other things, established an approximate 640-acre drilling and spacing unit for Section 31, Township 9 North, Range 59 West, 6th P.M., and approved one horizontal well within the unit, for the production of oil, gas, and associated hydrocarbons from the Niobrara Formation.

5. On August 29, 2016, the Commission entered Order No. 535-734, which among other things, vacated an approximate 640-acre drilling and spacing unit established by Order No. 535-3 for Section 31, Township 9 North, Range 59 West, 6th P.M.

6. On October 24, 2016, the Commission entered Order No. 535-744, which

established an approximate 320-acre drilling and spacing unit for the W½ of Section 31, Township 9 North, Range 59 West, 6th P.M., and approved up to 14 horizontal wells within the unit, for production of oil, gas, and associated hydrocarbons from the Niobrara and Codell Formations, with the productive interval of the wellbores located no closer than 300 feet from the unit boundary, and no closer than 150 feet from the productive interval of any other well producing from the Codell and Niobrara Formations, without exception being granted by the Director.

7. No horizontal wells have been drilled pursuant to Order No. 535-744.

8. To promote efficient drainage, and to assist in preventing waste, Applicant requests that the Commission:

(a) modify an approximate 320-acre drilling and spacing unit established by Order No.

535-744 covering the Application Lands such to include the Fort Hays and Carlile Formations, for the production of oil, gas, and associated hydrocarbons from the Niobrara, Fort Hays, Codell, and Carlile Formations, and to reduce well density such to allow a total of up to eight horizontal wells within the unit, with well location rules such that the treated interval of each wellbore within the unit be located no closer than 300 feet from the unit boundaries, and no closer than 150 feet from the productive interval of any other wellbore located within the unit, unless an exception is granted by the Director.

9. Applicant requests that the wells be drilled from no more than one multi-well

pad surface facilities located within the unit or at a legal locations on adjacent lands. Applicant’s proposed surface location lies in the SW¼SW¼ of Section 30, Township 9 North, Range 59 West, 6th P.M., within unincorporated Weld County, Colorado. Weld County is the local government with jurisdiction over the Locations. Weld County has waived its right to have Weld County Oil and Gas Location Assessment (“WOGLA”) permitting complete (“disposition”) prior to DSU approval as contemplated by C.R.S. §34-60-116(1)(b). Applicant’s intended surface locations are to be described specifically in its Rule 511 Testimony.

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10. Applicant has intends to filed/obtained Form 2 Applications for Permit-to-Drill within the Application Lands consistent with the relief requested in this Amended Application the following wells:

API Well Name Operator`

Pending Ptasnik Fed 3031‐09H Verdad Resources LLC













Applicant shall sundry, withdraw, and/or re-file such permits as necessary and requested by the Commission permitting staff, to comport with the spacing requested by this Amended Application.

11. Applicant’s intended surface location is the following approved Form 2A: Name Location ID Martin 3030-3031 441041

12. Applicant maintains that the wells within the unit will be drilled in a north-south

orientation. 13. The target formations for horizontal development consist of the respective

benches of the Niobrara Formation and the Codell Formation. However, to account for the relative thickness of the Codell Formation in this area, Applicant requests that the Fort Hays Formation and Carlile Formation be included within the established unit. Any unintentional deviation of a permitted Codell formation horizontal well into the Fort Hays Formation or the Carlile Formation will not materially impact the drainage calculations or economics.

14. Applicant maintains that the Amended Application will allow for efficient

drainage of the Niobrara, Fort Hays, Codell, and Carlile Formations, will prevent waste, will protect correlative rights, and will assure a greater ultimate recovery of oil, gas and associated hydrocarbons.

15. The proposed drilling and spacing unit is not smaller than the maximum area

that can be drained by the proposed wells within the unit, and will have no adverse effect on correlative rights of adjacent owners.

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16. Applicant maintains that this Amended Application complies with Section 34-60-106(2.5)(a), C.R.S., and will submit sworn written testimony in specific satisfaction of this requirement.

17. Applicant owns or has secured the consent of more than 45% of the leasehold

and/or working interest within the Application Lands. Applicant may file a statutory pooling application in the unit.

18. The Application Lands contain federal minerals. As such, Applicant agrees to submit a Communitization Agreement to the BLM at least 30 days before the anticipated date of first production (as defined in the COGCC Rules) from the initial well drilled within the unit.

19. The names and addresses of the interested parties, pursuant to Rule 507.b.(1),

Rule 507.c., and Rule 507.d., will be submitted to the Commission in accordance with Rule 507.a.(2). Applicant certifies that copies of this Amended Application will be served on all locatable interested parties at least sixty (60) days prior to the date of the hearing for this Amended Application, as required by Rule 507.a.(1).

WHEREFORE, Applicant respectfully requests that this matter be set for hearing, that

notice be given as required by law and that, upon such hearing, this Commission enter its order consistent with Applicant’s proposals as set forth above.

[remainder of this page intentionally left blank]

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Dated this __31st day of June March 2020.

Respectfully submitted, WELBORN SULLIVAN MECK & TOOLEY, P.C. By:

Joseph C. Pierzchala Geoffrey W. Storm Welborn Sullivan Meck & Tooley, P.C. 1125 17th Street, Suite 2200 Denver, CO 80202 303-830-2500 [email protected] [email protected] Attorneys for Verdad Resources LLC

Operator Representative: Name: Lemar Safi Title: Land Supervisor Address: 5950 Cedar Springs Road, Suite 200, Dallas, TX 75235 E-mail: [email protected] Phone: 214-838-2757

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Typewritten Text

17

VERIFICATION

)STATE OF TEXAS

) ss

CITY & COUNTY OF DALLAS )

Lemar Safi, Land Supervisor for Verdad Resources LLC, upon oath deposes and says

that he has read the foregoing Application and that the statements contained therein are true

to the best of his knowledge, information and belief.

VERDAD RESGUR LC

SafTaper

Lemar S

Land Si ervis

Subscribed and sworn to before me this 5th day of March 2020 by Lemar Safi, Land

Supervisor for Verdad Resources LLC.

Witness my hand and official seal.

Notary Public 17 < ,My Commission Expires: 0 £_[ \~7 c3Q<3S

i§ IRMA AGOSTO

My Notary ID #130543679Expires February 17, 2024

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Application LandsApplication Lands

Township 9 North, Range 59 West, 6th P.M.

Sections 31 (W2)

Niobrara, Fort Hays, Codell, Carlile Formations

Unnamed Field

Weld County, CO

Approximately 2 miles NE of 390 and CR 98

Verdad Resources LLC

Spacing Application

22212019

21282930

3433323635

%£

98

4 356123

98712 101110

A1" = 3500 Feet

^70000 1750 3500

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Rectangle

gstorm

Typewritten Text

Township 9 North, Range 59 West, 6th P.M. Sections 31 (W2) Niobrara, Fort Hays, Codell, Carlile Formations Unnamed Field Weld County, CO Approximately 2 miles NE of 390 and CR 98 Verdad Resources LLC Spacing Application

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Polygonal Line

gstorm

Typewritten Text

98

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF AN AMENDED

APPLICATION BY VERDAD RESOURCES

LLC FOR AN ORDER MODIFYING AN

APPROXIMATE 320-ACRE DRILLING AND

SPACING UNIT SUCH TO INCLUDE THE

FORT HAYS AND CARLILE FORMATIONS,

WITH WELL LOCATION RULES

APPLICABLE TO THE DRILLING OF WELLS

AND PRODUCING OF OIL, GAS, AND

ASSOCIATED HYDROCARBONS FROM THE

NIOBRARA, FORT HAYS, CODELL, AND

CARLILE FORMATIONS FOR THE W1/2 OF

SECTION 31, TOWNSHIP 9 NORTH, RANGE

59 WEST, 6TH P.M., UNNAMED FIELD,

WELD COUNTY, COLORADO

) Cause No. 535

)) Docket No. 200300093

)) Type: SPACING

)))))))))

CERTIFICATE OF SERVICE

STATE OF COLORADO §§

CITY AND COUNTY OF DENVER §

I, Geoffrey W. Storm, of lawful age, and being first duly sworn upon my oath, state and

declare:

That I am the attorney for Verdad Resources LLC, and that on or before July 1 7, 2020,

I caused a true and correct copy of the Amended Application and Notice of Hearing to be

deposited in the United States mail, postage prepaid, addressed to the interested parties to the

Amended Application, as required by Commission Rule 507. a. (1), 507. b. (2), and §34-60-

108(4), C.R.S.

Geoffrey W. Storm

Subscribed and sworn to before me August 14, 2020.

Witness my hand and official seal.

*ZkLL jO-

My commission expires: ^^ /c939 )MELISSA A. MORMANNOTARY PUBLIC

STATE OF COLORADONOTARY ID 19894012434

MY COMMISSION EXPIRES AUGUST 29, 2021mJBLmmmm i i i in -

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EXHIBIT A

INTERESTED PARTIES

Noble Energy WyCo, LLC

Noble Energy Inc.

United States of America, BLM Colorado State Office

Anadarko E&P Company, LP

Verdad Resources LLC

Jason Maxey, Weld County Department of Planning Services

Colorado Department of Public Health and Environment Attn: Oil and Gas Liaison

Colorado Parks and Wildlife Attn: Brandon Marette NE Energy Liaison

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