REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 14, 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 Pacific Midland Production Company for an order recommending the Codell and Niobrara formations underlying certain lands in Weld 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 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. Pacific Midland Production Company 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 Codell formation was recommended a "Tight Formation" by Order No. NG-29-1 and approved by FERC on June 18, 1982, and an extension of the area in which the Niobrara formation was recommended a "Tight Formation" by Order No. NG-44-1 and approved by FERC on January 18, 1985. The additional lands are located east of the previously approved areas and are contiguous to the previously approved areas.

5. Geological testimony presented at the hearing indicates that the Codell and Niobrara formations in the additional area is of the same characteristics as those in the previously approved areas as described in Order Nos. NG-29-1 and NG-44-1.

- 1 -(ng-29-3, 44-6)

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 Codell and Niobrara formations 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 is said Codell and Niobrara formations.

c. Hydrocarbons usually do not exist as liquid in said Codell and Niobrara 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.

- 2 -(ng-29-3, 44-6)

8. In view of the above findings, all the criteria required by the Federal Energy Regulatory Commission pursuant to the rules in Docket No. 79-76 have been met; therefore, a recommendation should be made that the Codell and Niobrara formations, 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 Codell and Niobrara formations underlying the following described lands in Weld County, 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 North, Range 63 West, 6th P.M. Section 20: All

ENTERED this day of , 1991, as of June 14, 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 June 28, 1991 1283 - 3 -(ng-29-3, 44-6)