REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on March 15, 1982 at 9:00 a.m. in Room 110, State Centennial Building, Denver, Colorado, upon the application of Coseka Resources, Ltd., Tenneco Oil Company, Belco Petroleum Corporation, Fuel Resources Development Co., Coors Energy Company, Texas Gas Exploration Company, Sinclair & Immich, Inc., Walter Fees, Jr., and Beartooth Oil and Gas Company, for an order recommending the Dakota and Morrison format ions underlying certain lands in Garfield, Mesa and Rio Blanco 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 the above-mentioned applicants, having appeared in support of their 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 the application.

3. The area of concern is located along the Utah-Colorado state line between the towns of Rangely and Grand Junction. It is bounded on the north by the Rangely anticline, on the east by the limits of the Piceance Basin, on the west by the Utah state line and on the south by a practical limit to production based on the proximity to the outcrop. The area is also limited and overlain by previously approved "Tight Formation" designations. Of the approximat e 545,786 acres in the area, 94 percent is federal acreage and 5.6 percent are private lands. The remaining small percentage of lands are not leased for oil and gas.

4. The sands of the Dakota formation, of Cretaceous age, were deposited in a continental fluvial environment of a lower alluvial plain or lower coastal plain setting. The formation is not considered to be a blanket sand. Deposition was in a channel system. The channels vary from less than a mile to a few miles in width and individual channel sands are vertically stacked. The sands are lenticular and are fine to medium grained. Some conglomerates with chert or quartzite are present. The clays in the sand are mainly chlorite and kaolinite. The formation exhibits very low porosities and permeabilities. Sands of the Morrison formation, of Jurassic age, were also deposited in a continental fluvial environment, varying from alluvial fan to floodplain. Deposition was in a channel system similar to the Dakota formation. The sands are fine to medium grained and consist mainly of quartz with silica and ca lcite cementing. Quartz overgrowth, as in the Dakota formation is common. Clays present are monttmorillonite-mica, chlorite and kaolinite. These conditions inhibit porosity and permeability.

5. Engineering testimony presented at the hearing indicates that:

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

b. The stabilized production rate, against atmospheric pressure of wells completed from said Dakota and Morrison

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 in said formation.

c. Hydrocarbons usually do not exist as a liquid in said Dakota and Morrison formations reservoirs. 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 and Morrison formations underlying the area below described should each be designated a "Tight Formation".

O R D E R

NOW, THEREFORE, IT IS ORDERED, that the Colorado oil and Gas Conservation Commission recommends that the Dakota and Morrison formations underlying the following described lands in Garfield, Mesa and Rio Blanco Counties, Colorado, each 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 100 West, 6th P.M. Sections 13 thru 36

Township 1 North, Range 101 West, 6th P.M. Sections 13 thru 36

Township 1 North, Range 102 West, 6th P.M. Sections 13 thru 36

Township 1 North, Range 103 West, 6th P.M. Sections 13 thru 36

Township 1 North, Range 104 West, t P.M. Sections 13 thru 36

Township 1 South, Range 100 West, 6th P.M. All

Township 1 South, Range 101 West, 6th P.M. All

Township 1 South, Range 102 West, 6th P.M. All

Township 1 South, Range 103 West, 6th P.M. All

Township 1 South, Range .104 West, 6th P.M. All

Township 2 South, Range 100 West, 6th P.M. All

Township 2 South, Range 101 West, 6th P.M. Sections 1 thru 18 Sections 20 thru 27 Sections 34, 35, 36

Township 2 South, Range 102 West, 6th P.M. Sections 1, 2, 3, 10 thru 15

Township 2 South, Range 103 West, 6th P.M. Sections 3 thru 8 Sections 17, 18, 19, 20, 29, 30, 31, 32

Township 2 South, Range 104 West. 6th P.M. All

Township 3 South, Range 100 West, 6th P.M. Sections 1 thru 24

Township 3 South, Range 101 West, 6th P.M. Sections 1, 2, 3, 7 thru 24

Township 3 South, Range 102 West, 6th P.M. Sections 5 thru 36

Township 3 South, Range 103 West, 6th P.M. All

Township 3 South, Range 104 West, 6th P.M. All

Township 4 South, Range 102 West, 6th P.M. All

Township 4 South, Range 103 West, 6th P.M. All

Township 4 South, Range 104 West, 6th P.M. All

Township 5 South, Range 102 West, 6th P.M. Sections 1 thru 24, 27 thru 34

Township 5 South, Range 103 West, 6th P.M. All

Township 5 South, Range 104 West, 6th P.M. All

Township 6 South, Range 103 West, 6th P.M. All

Township 6 South, Range 104 West, 6th P.M. All

Township 6 South, Range 105 West, 6th P.M. All

Township 7 South, Range 103 West, 6th P.M. Sections 1 thru 23, 25 thru 36

Township 7 South, Range 104 West, 6th P.M. All

Township 7 South, Range 105 West, 6th P.M. All

Township 8 South, Range 103 West, 6th P.M. Sections 19 and 20, 28 thru 36

Township 8 South, Range 104 West, 6th P.M. Sections 2 thru 11, 13 thru 36

Township 8 South, Range 105 West, 6th P.M. All

Township 9 South, Range 103 West, 6th P.M. Sections 1 thru 22, 27 thru 34

Township 9 South, Range 104 West, 6th P.M. All

Township 10 South, Range 103 West, 6th P.M. Sections 3 thru 10

Township 10 South, Range 104 West, 6th P.M. Sections 1 thru 12

Township 1 North, Range 2 West, Ute P.M. Sections 4, 5, 6

Township 1 North, Range 3 West, Ute P.M. Sections 1 thru 6

Township 2 North, Range 2 West, Ute P.M. Sections 6, 7, 18, 19, 20, 29 thru 33

Township 2 North, Range 3 West, Ute P.M. All

ENTERED this 2nd day of July 1982, as of March 15, 1982.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary