REPORT OF THE COMMISSION

This cause came on for hearing before the Oil and Gas Conservation Commission on August 20, 1984 at 9:00 a.m. in Suite 380 Logan Tower Building, 1580 Logan Street, Denver, Colorado 802031, after giving Notice of Hearing as required, up-on the application of Energy Oil, Inc., and Martin Exploration Management Corporation for an order recommending the Niobrara formation underlying certain lands in Adams, Boulder and Weld Counties, Colorado, as a "Tight Form ation" 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 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 western portion of the Denver-Julesburg Basin approximately 5 miles east of the City of Boulder, Colorado, and approximately 10 miles north of Denver, Colorado. The "J" Sand and Codell formations have been designated "tight formations" in the area by the FERC. In addition, the area lies approximately 20 miles southwest of the area in which the Niobrara formation has been recommended as a "tight formation" by Order No. NG-44 -1. No federal lands are included in the area.

4. The characteristics of the Niobrara formation are similar to the formation described in Order No. NG-44-1. The formation consists of medium brownish gray, microfossiliferous calcareous shales ranging to arigillaceous limestones and chalk. Thickness varies from 250 to 450 feet in the area.

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 from 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 Morrison 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. 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 Adams, Boulder 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:

Township 1 North, Range 68 West, 6th P.M. All

Township 1 North, Range 69 West, 6th P.M. All

Township 1 South, Range 68 West, 6th P.M. Sections 1 thru 24

Township 1 South, Range 69 West, 6th P.M. Sections 1 thru 24

ENTERED this 26th day of October, 1984, as of August 20, 1984. OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary