REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 18, 1982 at 9:00 a.m. upon the application of Teton Energy, Inc., for the designation of the Dakota-Lakota formation underlying certain lands in Boulder 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, and Teton Energy., having appeared in support of its application, and no one having ap peared 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 Teton Energy's application.

3. The area of concern is located between the cities of Denver and Boulder, Colorado, with the town of Louisville in the approximate center of the area. It is located in the western portion of the Denver basin astride the basins synclinal axis. The upthrown Front Range with the exposed Dakota "hogback" is on the west flank of the area and a downdip permeability barrier to the east.

4. The geological testimony presented at the hearing indicates the Dakota-Lakota Sandstones of the Dakota Group is of lower Cretaceous age and consist of very fine to medium grained sands of channel origin interbedded with red, green and gray siltstones and claystones of adjacent flood plain deposits. The sandstone are clay filled .n part and well cemented with silica and dolomite.

5. Engineering testimony presented at the hearing indicates that:

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

b. The stabilized production rate, against atmospheric pressure of wells completed for production, without stimulation from the producing interval of the Dakota-Lakota formation is not expected to exceed the maximum allowable production rate defined by depth in Section 271. 705 (b)(ii) for any completion location in said formation.

c. Hydrocarbons usually do not exist as liquid in said formation reservoir, and 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 been met; therefore, a recommendation should be made that the Dakota-Lakota 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 Dakota-Lakota formation underlying the following described lands in Boulder County, Colorado, be designated a "Tight Formation" and incorporated in the list of "Tight Formations" established pursuant to Rule 271.706 of the Federal Energy Regulatory Commission:

Township 1 North, Range 69 West, 6th P. M. Sections 25 thru 36

Township 1 South, Range 69 West, 6th P.M. Sections 3 thru 6, 7 thru 10, 15 thru 22, 27 thru 34

Township 1 South, Range 70 West, 6th P. M. Sections 1 thru 3., 10 thru 15, 22 thru 27, 34 thru 36

ENTERED this 17th day of February, 1982, as of January 18, 1982.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary