REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 17,1941 at 9:00 a. m. in Room 110, State Centennial Building, Denver, Colorado, and was continued to September 21, 1981 upon the application of Snyder Oil Company, which application was amended to delete certain lands, for the recommendation of the Cozette and Corcoran members of the Upper Mancos formation, the Mesaverde formation, to include the Rollins member underlying certain lands in Garf ield, Mesa, Delta, Pitkin and Gunnison Counties, Colorado, each as a "Tight Formation", pursuant to Section 107 (b) of the Natural Gas Policy Act of 1978 (15 U.S.C. 3317) and the regulations thereunder, and Snyder, having appeared in support, of 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 rules in Docket No. RM 79-76 of the Federal Energy Regulatory Commission, and has jurisdiction over the subject matter of Snyder Oil Company's application.

3. The area is located in the southeast portion of the Piceance Basin, this portion of the basin is bounded on the north and west by the Colorado River, on the east by the Grand Hogback and White River Uplift, and on the south and southwest by the Uncompahgre and Gunnison Uplifts. The city of Glenwood Springs is located in the extreme northeast corner of the area, and the city of Grand Junction is located approximately 15 miles from the southwest boundary of the area. Predominate topographical features in the area are Grand Mesa, Battlement Mesa and Divide Creek. Sixty-eight percent (68%) of the lands are federal, seventeen percent (17%) State and fifteen (15%) Fee. The area overlaps certain lands as described in Order Nos, NG-7-1, NG-12-1, NG-17-1 and NG-21-1, in which the Cozzette, Corcoran and Mesaverde formations have been designated as "Tight Formation". These lands, as well as certain others, are deleted from the area described herein.

4. Geological testimony presented at the hearing indicates that the upper part of the Mesaverde formation consists of interbedded sandstones and shales of fluvial origin, and sandstones, shales and coal of deltaic and marine origin in the lower part. The sandstone reservoirs are lenticular and clay filled. The coal seams which are located in the lower part of the formation are actively mined on the east and west sides of the Basin The basal member has b een designated the Rollins. For the purposes of this application, the Cozzette and Corcoran are considered part of the Upper Mancos formation. Below the Mesaverde formation is the transitional zone into the Mancos formation, which consists of dark green shale and tends to thicken eastward into the basin. Below this shale zone are the Cozzette and Corcoran Sand members, consisting of fine grained sandstones with considerable amounts of clay fill and silt . The two members are separated by marine shales.

5. Engineering testimony presented at the hearing indicates that :

a. The average in-situ gas permeability throughout the pay sections of the Mesaverde formation, the Rollins member of the Mesaverde formation and the Cozzette and Corcoran members of the Upper Mancos formation is not expected to exceed .1 millidarcy.

b. The stabilized production rate against atmospheric pressure wells completed for production from the Mesaverde formation, to include the Rollins member the Cozzette and Corcoran members of the Upper Mancos formation at various depths in said formations, without stimulation, has been too small to measure and is not expected to exceed a maximum allowable production rate defined by depth in Section 2716.705 (b)(ii) for any completion location in the said f ormations.

c. Very small amounts of hydrocarbons exist as a liquid in said formations reservoirs; however, no well is expected to produce more than five (5) barrels of crude oil per day.

6. 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.

7. In view of the above findings, all the criteria required by the Federal Energy Regulatory Commission pursuant to the rules in Docket No. RM 79-76 have bee met; therefore, a recommendation should be made that the Mesaverde formation. to include the Rollins member, the Cozzette and Corcoran members of the Upper Mancos 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 Mesaverde formation, to include the Rollins member, the Cozzette and Corcoran members of the Upper Mancos formation underlying the following described lands in Garfield, Mesa, Delta, Pitkin and Gunnison Counties, Colorado, each be designated a "Tight Formation" and incorporated in the list of "Tight Formations" established pursuant to Rule 271.706 of t he Federal Energy Regulatory Commission:

Townships 6 South to 11 South (inclusive), Ranges 89 West to 97 West (inclusive), 6th P.M. All Sections in the above Townships EXCEPT the following:

1. The Rollins member of the Mesaverde formation, the Cozette and Corcoran members of the Upper Mancos formation (included in previous recommendation NG-7)

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 thru 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 l, 12, 13, 24, 25 and 36

2. Cozzette and Corcoran members of the Upper Mancos formation (Included in .previous recommendation NG-12).

Township 9 South, Range 97 West, 6th P.M. Sections 1 thru 24; 26 thru 35

Township 10 South, Range 97 West, 6th P.M. Sections 2 thru 11

3. Cozzette and Corcoran members of the Upper Mancos formation (Included in previous recommendation NG-17),

Township 7 South, Range 90 West, 6th P.M. Sections 1 thru 36

Township 8 South, Range 90 West, 6th P.M. Sections 1 thru 12 ,

Township 7 South, Range 91 West, 6th P.M. Sections 1 thru 36

4. Mesaverde formation (to include the Rollins member).

Township 6 South, Range 93 West, 6th P.M. Sections 5, 6, 7, 8, 17, 18, 19, 20

Township 6 South, Range 94 West, 6th P.M. Sections 1, 2, 3, 8-17, 19-24, 27-33

5. Lands within the Wolf Creek Unit Area.

Township 8 South, Range 89 West, 6th P.M. Section 31: SW1/4 NW1/4, and SW1/4 SE1/4

Township 8 South, Range 90 West, 6th P.M. Section 21: S1/2 NE1/4; S1/2 Section 22: S1/2 N1/2; S1/2 Section 23: W1/2 SW1/4, SE1/4 SW1/4, SW1/4 SE1/4 Section 25: W1/2 NW1/4, SE1/4 NW1/4, SW1/4 W1/2 SE1/4, SE1/4 SE1/4 Sections 26 thru 28, 33 thru 36

Township 9 South, Range 89 West, 6th P.M.

Section 5: SW1/4 NW1/4, SW1/4 Section 6: All

Township 9 South, Range 90 West, 6th P.M. Sections 1 thru 3 Section 11: N1/2 Section 12: N1/2

ENTERED this 26th day of October, 1981, as of September 21, 1981.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary