REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 21, 1980 at 9:00 a. m. , upon the application of Chandler & Associates, Inc., for the designation of the Lower Mesaverde formation (defined for this purpose as consisting of the Rollins, Cozzette and Corcoran Sandstone members) underlying certain lands in Mesa County, Colorado, as a "Tight Formation" pursuant to Section 107 (b) of the Natural Gas Policy Act of 1978 (15 U.S. C. 3317) and the reg ulations thereunder, and Chandler having appeared in support or its application, and no one having appeared in opposition, and the Commission having heard the testimony and evidence presented;

The Commission finds as follows:

1. Notice of the time, place and purpose of the hearing has been given as required.

2. The Commission is the jurisdictional agency pursuant to the interim rules in Docket No. RM 79-76 of the Federal Energy Regulatory Commission., and has jurisdiction over the subject matter of Chandlers application.

3. The area in which the formations are located is approximately 30 miles east northeast of Grand Junction, Colorado, and lies in the southern part of the Piceance Creek Basin. The geological testimony presented at the hearing indicates that the Lower formation of late Cretaceous age consists of the Rollins, Cozzette and Corcoran Sand Units, each similar in characteristics, and are marine blanket sands of deltaic deposition consisting of very fine grain, clay filled sand which results in low permeability. Trapping is stratigraphic in nature and although the sands in the formation are continuous and widespread, variations occur in porosity and water saturation. Average depth to the producing interval of the Lower Mesaverde formation (as defined) is approximately 3850 feet.

4. Engineering testimony presented at the hearing indicates that:

a. The average in-situ gas permeability throughout the pay section ,averages . 0568 millidarcies and is not expected to exceed .1 millidarcy.

b. The stabilized production rate, against atmospheric pressure, of wells completed for production from said formation at an average depth of 3, 850 feet, without stimulation, is not expected to exceed a maximum allowable production rate of 105 MCF, of gas per day.

c. Hydrocarbons usually do not exist as a liquid in the reservoirs of .said formation. No well is expected to produce more than five (5) barrels of crude oil per day.

5. Typical casing design of wells drilled in the area protects fresh water aquifers in the area as required by the rules and regulations of the Oil and Gas Conservation Commission of the State of Colorado.

6. In view of the above findings, all the criteria required by the Federal Energy Regulatory Commission pursuant to the interim rules in Docket No. RM 79-76 have been met; therefore a recommendation should be made that the Lower Mesaverde formation (defined for this purpose as consisting of the Rollins, Cozzette and Corcoran Sandstone members), underlying the area below described should be designated a "Tight Formation".

ORDER

NOW, THEREFORE, IT IS ORDERED, that the Colorado Oil and Gas Conservation Commission recommends that the Lower Mesaverde formation (defined for this purpose as consisting of the Rollins, Cozzette and Corcoran Sandstone members), underlying the following described lands in Mesa County, Colorado, be designated as a "Tight Formation" and incorporated in the list of "Tight Formations" to be established pursuant to Rule 271. 706 of the Federal Energy Regulator y Commission:

Township 9 South, Range 95 West, 6th P.M. Sections 19 thru 23; 26 thru 36

Township 9 South, Range 96 West, 6th P.M. Sections 25 thru 36

Township 9 South, Range 97 West, 6th P. M. Sections 25 and 36

Township 10 South, Range 94 West, 6th P.M. Sections 6, 7, 18, 19, 30 and 31

Township 10 South, Range 95 West, 6th P.M. Sections 1 thru 36

Township 10 South, Range 96 West, 6th P. M. Sections 1 thru 36

Township 10 South, Range 97 West, 6th P.M. Sections 1, 12, 13, 24, 25 and 36 ENTERED this 15th day of September, 1980., as of July 21, 1980.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary