IN THE MATTER OF THE APPLICATION OF EL PASO NATURAL GAS COMPANY FOR UNDERGROUND STORAGE OF NATURAL GAS IN THE BARKER DOME FIELD LA PLATA COUNTY, COLORADO Cause No. 325 Order No. 325-1

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on May 16, 1977, at 9 ato., in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of El Paso Natural Gas Company, for an order approving the storage of natural gas in an underground reservoir in the Dakota formation underlying certain lands in the Barker Dome Field. La Plata County. Colorado.

FINDINGS

The Commission finds as follows:

1. That due notice of the time, place, and purpose of the hearing has been given in all respects as required by law.

2. That the Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

3. That testimony presented at the hearing indicates that the proposed natural gas storage project, in the area described in the following order, is in the public interest and welfare, and that the storage reservoir is suitable and practicable.

4. That observation wells and withdrawal injection wells should be allowed to be drilled at locations deemed most efficient and effective for the storage project and that relief should be granted to the applicant concerning the requirements of Rules 307, 309, 310, 314 and 318 of the Rules and Regulations of the Commission, since these rules are not applicable to a natural gas storage project.

5. That the casing and completion programs as proposed by the applicant for the observation wells and withdrawal-injection wells will adequately protect the aquifers in the area and that the annular withdrawal-injection proposal will not endanger any under-ground drinking water sources and mat the procedures for plugging existing Dakota gas wells in New Mexico will adequately protect the common aquifers in Colorado.

6. That to insure the integrity of the project and well construction, certain tests and surveys should be run and the results reported to the Commission, as may be required; said tests and surveys should include, but not be limited to, obtaining bottom hole pressures, deadweight wellhead pressures, gamma ray neutron logs, casing inspec-tion and caliper logs.

7. That volumes of gas injected and withdrawn and injection pressures should be reported monthly on a form approved by the Commission.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the project for the storage of natural gas in an underground reservoir in the Dakota formation underlying certain lands in the Barker Dome Field, La Plata County, Colorado and San Juan County, New Mexico, is hereby approved as to that portion that lies within Colorado. The areal extent of the underground storage reservoir located in Colorado is described as follows:

(over)

Township 32 North, Range 13/2 West, N. MP.M. Portions of Sections 1, 2, 3 and 4, 12, 13 and 24. All of Sections 9, 10, 11, 14, 15, 16, 21, 22 and 23.

Township 32 North, Range 14, West, N. MP.M. Portions of Sections 1, 12, 13, 23 and 24. said lands being more particularly described as follows:

Beginning at a point on the Colorado-New Mexico State Line which is one-half (/2) mile west of the intersection of such state line with the Ute Indian Reservation boundary on the west side of Section 7, T. 32 N., R. 13 W., N.MP.M., Colorado; from said point of beginning, north two and three-quarter (2 3/4) miles; thence west three (3) miles; thence south one and one-quarter (/4) miles; thence west one-half (/2) mile; thence south one (1) mile; thence west one (1) mile; thence south one-half (/2) mile to the Colorado-New Mex-ico State Line; thence east along said state line four and one-half (4/2) miles to the point of begin-ning.

IT IS FURTHER ORDERED, that the following rules and regulations shall apply to the drilling of observation and withdrawal-injection wells and operations in the storage project:

Rule 1: Observation wells and withdrawal-injection wells shall be located where deemed most efficient and effective for the storage project and requirements to comply with Rules 307, 309, 310, 314 and 318 of the Rules and Regulations of the Com-mission are hereby waived.

Rule 2: Surface casing shall be set in all withdrawal-injection and observa-tion wells at least Forty (40) feet into the Mancos shale and cemented to the surface. Pro-duction casing shall be set into the Dakota formation and cemented with sufficient cement to prevent any possible migration of gas into another formation. Tubing may be run into the withdrawal-injection wells without a packer and withdrawal and injection of gas may be through the tubing or through the tubing-production casing annulus. The annulus between the production casing and the surface casing shall be monitored periodically for leaks.

Rule 3: Volumes of gas injected and withdrawn and injection pressures shall be reported monthly to the Commission. The results or the tests and surveys necessary to insure the integrity of the system shall be reported to the Commission on a timely basis as may be required.

IT IS FURTHER ORDERED, that the rules and regulations contained herein shall become effective forthwith.

IT IS FURTHER ORDERED, that the commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders, rules and regulations.

ORDERED this 26th day of May, 1977.

THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary (#325-1)