REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on December 21, 1992 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 Renegade Oil & Gas Company for an order recommending the "J" Sand Formation, 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. Renegade Oil & Gas 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, located in the eastern Denver-Julesberg Basin, approximately 50 miles from Denver, Colorado, is an extension of the area in which the "J" Sand Formation was recommended a "Tight Formation" by Order No. NG-3-1, approved by FERC Order No. 124 on January 23, 1981, Order No. NG-3-2, approved by FERC Order No. 261 on September 30, 1982 and by Order No. NG-3-3, approved by FERC Order No. 271 on December 2, 1982,, Order No. NG-3-4, approved by FERC Order No. 425 on June 7, 1985, Order No. NG-3-5, approved by FERC Order No. JD91-07820T on May 24, 1992 and by Order No. NG-3-6, pending approval by the FERC. The additional lands are located east of and are contiguous to the previously approved areas.

5. Geological testimony presented at the hearing indicates that the "J" Sand Formation in the additional area is of the same characteristics as those in the previously approved areas as described in Order Nos. NG-3-1, NG-3-2 and NG-3-3, NG-3-4, NG-3-5 and NG-3-6.

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 formation.

b. The stabilized production rate, against atmospheric pressure of wells completed from said Marine member of the "J" Sand 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 "J" Sand Formation.

c. Hydrocarbons usually do not exist as liquid in said "J" Sand Formation reservoir, 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 rules in Docket No. 79-76 have been met; therefore, a recommendation should be made that the "J" Sand formation, 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 "J" Sand Formation, 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 2 South, Range 62 West, 6th P.M. Section 6: All

ENTERED this 12th day of January, 1993, as of December 21, 1992.

OIL AND GAS CONSERVATION COMMISSION THE STATE OF COLORADO

By Patricia C. Beaver, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 January 4, 1993