REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 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 application of Amoco Production Company, for an order recommending the Dakota 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. Amoco Production 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 is located in the western portion of the Denver-Julesberg Basin and the Wattenberg Gas Spaced Area. The area is adjacent to an application pending FERC approval for designation of "tight formation" for the Dakota Formation. The "J" Sand and Codell Formations have been designated "tight formations" in the area and applications for the designation of the Niobrara, Shannon and Sussex Formations as "tight formations" covering the area are pend ing FERC approval. The town of Plattville lies directly to the north of the area and the city of Brighton to the south. Federal lands included are described in Exhibit 1a.

5. Geological testimony presented at the hearing indicates that the Dakota Formation, with depths ranging from around seven thousand seven hundred (7700) feet to eight thousand five hundred (8500) feet, is a widespread blanket sand deposit. The average thickness of the interval is one hundred fifty (150) feet. Natural fracturing may occur in the Dakota Formation over some of the area.

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 formations.

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

c. Hydrocarbons usually do not exist as liquid in said Dakota Formation reservoirs, 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 Dakota 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 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 1 North, Range 65 West, 6th P.M. Sections 4-9, 16-21 and 28-33: All

Township 1 North, Range 66 West, 6th P.M. Sections 1-36: All

Township 1 North, Range 67 West, 6th P.M. Sections 1-28: All Section 29: N1/2 Sections 30-36: All

Township 1 North, Range 68 West, 6th P.M. Sections 1-36: All

Township 2 North, Range 65 West, 6th P.M. Sections 4-9, 16-21 and 28-33: All

Township 2 North, Range 66 West, 6th P.M. Sections 1-36: All

Township 2 North, Range 67 West, 6th P.M. Sections 1-36: All

Township 2 North, Range 68 West, 6th P.M. Sections 1-4, 9-36: All

Township 3 North, Range 65 West, 6th P.M. Sections 4-9, 16-21 and 28-33: All

Township 3 North, Range 66 West, 6th P.M. Sections 1-36: All

Township 3 North, Range 67 West, 6th P.M. Sections 1-15: All Section 16: E1/2 Sections 17-36: All

Township 3 North, Range 68 West, 6th P.M. Sections 21-28, 33-36: All

ENTERED this day of , 1992, as of January 21, 1992.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 February 13, 19921 ORDERS\NG-48-1

February 27, 1992

Ms. Janet Ardinger Division Director, NGPA Compliance Federal Energy Regulatory Commission 825 N. Capitol St., NE Washington, DC 20426

RE: Recommendation of the Dakota Formation, Underlying Certain Lands in Weld County, Colorado, as a "Tight Formation", Cause No. NG-48.

Dear Ms. Ardinger:

Enclosed you will find three (3) copies of the recommendation of the Colorado Oil and Gas Commission pursuant to Section 107(b) of the Natural Gas Policy Act of 1978 regarding the Dakota Formation, underlying certain lands in Weld County, Colorado.

Also enclosed are two (2) sets of exhibits presented at the time of hearing, along with one set of transcripts from the hearing.

Should you have any questions, or desire additional data, please respond in writing. Please direct any correspondence to my attention at the above address.

Sincerely,

Patricia C. Beaver Technical Secretary

Enclosures

PCB/dah ORDERS\NG-48-1

IN THE MATTER OF DETERMINATION OF THE ) CAUSE NO. NG-48 DAKOTA FORMATION, UNDERLYING CERTAIN LANDS ) IN WELD COUNTY, COLORADO AS A "TIGHT ) ORDER NO. NG-48-1 FORMATION", PURSUANT TO REGULATIONS OF THE ) NGPA Section 107(b) FEDERAL ENERGY REGULATORY COMMISSION ) FERC Regulation 271.705

The Colorado Oil and Gas Conservation Commission is the designated jurisdictional agency under subpart (g) of Part 271 of Title 18, Code of Federal Regulations. Pursuant to Section 271.705 of the Federal Energy Regulatory Commission regulations, under Section 107(b) of the Natural Gas Policy Act, the jurisdictional agency herewith submits its recommendation, as per Order No. NG-48-1 that the Dakota Formation, underlying certain lands in Weld County, Col orado, be designated as a "tight formation" and incorporated into the list of "Tight Formations" established under Section 271.706 of the regulations. Pursuant to the guidelines established under Section 271.705(b)(l)(i)(ii)(iii), and the contents prescribed by 271.705(c), the Colorado Oil and Gas Conservation Commission submits the following:

1. Geological and geographical description of the Dakota Formation.

a. Commission Order No. NG-48-1.

2. Geologic and engineering data supporting the recommendation and the source of that data.

a. Transcript and exhibits from the public hearing held January 16, 1992.

3. A report to the extent to which existing state regulations will assure development of the recommended "tight formation" will not adversely affect any fresh water aquifers.

a. Colorado Oil and Gas Conservation Commission "Statement on Water Sand Protection".

b. A report from the State Engineer Water Resources Investigation section concerning water sand protection for the area has previously been submitted with NG-3-1 (Colo 1) and NG-29-1 (Colo 25).

c. State Rule No. 317.

4. Additional information.

a. Order No. 499-1 which established 320-acre drilling and spacing units for the Dakota Formation in the area.

b. State Rule No. 318.

All geological and engineering testimonial evidence to support this recommendation has been received under oath. Copies of all documentary evidence received at the public hearing accompany this report. The requirements of 271.705(c) pursuant to 271.705(b)(l)(i)(ii)(iii) have now been met. The Oil and Gas Conservation Commission of the State of Colorado, therefore recommends, as per Order No. NG-48-1 that the Dakota Formation be designated as a "Tight Formation", in the area as described in said order, and having made such recommendation concludes its responsibility in the premises has been discharged.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

BY Patricia C. Beaver, Secretary

February 27, 1992

attachments

PCB/dah

STATEMENT OF WATER SAND PROTECTION

CAUSE NO. NG-48

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. A description of an idealized-type casing program, and/or cementing program which will be used in wells drilled for production in the Dakota Formation, was presented at the hearing. This plan was reviewed by representatives of the Office of the State En gineer, Water Resources Investigation Branch. All aquifers above the Dakota Formation will be behind pipe or protected by cement stage work, as required by State Rule No. 317, if these aquifers are below the shoe of the surface casing. State Rule No. 317 requires sufficient surface casing shall be run to reach a depth below all known or reasonably estimated utilizable fresh water levels. In areas where fresh water strata or zones are of such depth to m ake it impractical or uneconomical to set the full amount of surface casing necessary to cover or isolate all fresh water strata, the production string shall be stage cemented with a solid cement plug extending 50 feet below each fresh water strata to 50 feet above fresh water strata.

The Commission, therefore concludes that development of the recommended "tight formations" will not affect any fresh water aquifers that are, or are expected to be used as domestic, agricultural or other supplies. ??