REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 17, 1991 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax Avenue, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Unocal Corporation, for an order recommending the Dakota Formation, underlying certain lands in Garfield and Mesa Counties, Colorado as a "Tight Formation",, pursuant to Section 107 (b) of the Natural Gas Pol icy Act of 1978 (15 U.S.C. 3317) and the regulations thereunder. The Applicant, having appeared in support of the application, and no one having appeared in opposition, and the Commission having heard the testimony and evidence presented;

The Commission finds as follows:

1. Unocal Corporation, applicant herein, is an interested party in the subject matter of the above-referenced hearing.

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

3. 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 application.

4. The area is an extension of the area in which the Dakota Formation was recommended a "Tight Formation" by order No. NG-19-1 and approved by FERC on November 20, 1981. The additional lands are located north of the previously approved areas and are contiguous to the previously approved areas.

5. Geological testimony presented at the hearing indicates that the Dakota Formation, in the additional area is of the same characteristics as those in the previously approved areas as described in Order No. NG-19-1.

6. Engineering testimony presented at the hearing indicates that:

a. The average in-situ gas permeability is not expected to exceed .1 millidarcy for the formations.

b. The stabilized production rate, against atmospheric pressure of wells completed from said Dakota Formation, at the producing depths, without stimulation, is not expected to exceed a maximum allowable production rate defined by depth in Section 271.705 (b) (ii) for any completion location in said Dakota Formation.

C. Hydrocarbons usually do not exist as liquid in said Dakota Formation reservoirs, and no well is expected to produce more than five (5) barrels of crude oil per day.

7. 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.

8. 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 Dakota formation, underlying the area below described should each be designated a "Tight Formation"

ORDER

NOW, THEREFORE, IT IS ORDERED, that the Colorado Oil and Gas Conservation Commission recommends that the Dakota Formation, underlying the following described lands in Garfield and Mesa Counties, Colorado, be designated a "Tight Formation" and incorporated in the list of "Tight Formations" as described pursuant to Rule 271.706 of the Federal Energy Regulatory Commission:

Township 5 South, Ranges 95 and 96 West, 6th P.M. Sections 1 through 36: All

Township 6 South, Range 96 West, 6th P.M. Sections 1 through 36: All

Township 9 South, Range 92 West, 6th P.M. Sections 4 through 9: All Sections 16-21: All Sections 28 through 33: All

Township 9 South, Ranges 93 through 95 West, 6th P.M. Sections 1 through 36: All

Township 10 South, Ranges 93 through 95 West, 6th P.M. Sections 1 through 36: All

ENTERED this 13th day of January, 1991, as of December 17, 1991.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 December 30, 1991 ng.cse p37