REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 18, 1984 at 9:00 a.m. in Room 110, State Centennial Building, Denver, Colorado, after giving Notice of Hearing, upon the application of St. Michael Exploration Co., Bellwether Exploration Co., Wichita Industries, Inc., Nordic Petroleums, Inc., Colton & Colton, Sunset Hill oil Company and Black Hawk, Resources Corporation, for an order recommending the Niobrara formation underlying certain lands in Larimer and Weld Counties, 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 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 interim rules in Docket No. RM 79-76 of the Federal Energy Regulatory Commission, and has jurisdiction over the subject matter of application.

3. The area is located in the Denver-Julesburg Basin and surrounds the city of Greeley, Colorado to the east, north and west. The "J" Sand and Codell formation have been designated "tight formations" in the area by the FERC.

4. The Niobrara formation is upper Cretaceous in age and consists of limestones,. chalking limestones and intervening shales. Included are small percentages of clastic material, detrital clays and sandgrains. It is similar and continuous throughout the basin. The average depth of the formation is approximately 6900 feet with an average thickness of approximately 300 feet.

5. 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 for production, without stimulation- front the producing interval of the Niobrara 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 11 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. 79-76 have been met; therefore, a recommendation should be made that the Niobrara formation underlying the area below described should be designated a "tight formation".

O R D E R

NOW, THEREFORE, IT IS ORDERED, that. the Colorado and Gas Conservation Commission recommends that the Niobrara formation underlying the following described lands in Larimer and Weld Counties, 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:

Larimer County

Township 6 North, Rang 68 West, 6th P.M. Sections 1, 2, 11, 12, 13, 14, 23, 24, 25, 26, 35 and 36

Weld County

Township 4 North, Range 66 West, 6th P.M. Sections 2 thru 10; 15 thru 18

Township 5 North, Range 64 West, 6th P.M. Sections 1 thru 24

Township 5 North, Range 65 West, 6th P.M. Section 1

Township 5 North, Range 66 West, 6th P.M. Sections 2 thru 11; 14 thru 35

Township 5 North, Range 67 West, 6th P.M. Sections 1, 2, 3, 11, 12, 13, 14, 23, 24

Township 6 North, Range 64 West, 6th P.M. Sections 7; 13 thru 36

Township 6 North, Range 65 West, 6th P.M. Sections 7 thru 31; 34 thru 36

Township 6 North, Range 66 West, 6th P.M. Sections 6 thru 36

Township 6 North, Range 67 West, 6th P.M. All

ENTERED this 16th day of July, 1984, as of June 18, 1984.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO By Frank J. Piro, Secretary