REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 23, 1980, at 9:00 a.m. upon the application of Coseka Resources (U.S.A), Ltd., for the designation of the Mancos "B" formation, underlying certain lands in Garfield and Rio Blanco 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, and Coseka having appeared in support of its application, an d 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. 79-76 of the Federal Energy Regulatory Commission, and has jurisdiction over the subject matter of Coseka's application.

3. The geological testimony presented at the hearing proves that the Mancos. "B" zone (hereinafter referred to, for this purpose, as the Mancos "B" Formation) is a member of the Mancos Shale of Cretaceous age. The formation occurs in the- approximate middle third portion of the Mancos Sequence and consists of thinly bedded, interlaminated, very fine sandstones, siltstones, and shales, cemented with clay and calcite. Substantial pore-throat blockage by c lay and secondary clay crystals has reduces the effective permeability. Deposition was in an offshore marine shelf environment far from a sand source area. The interval is continuous over the Douglas Creek Arch area in western Colorado extending into the Southeastern Uinta Basin in Utah. The average depth to the top of the Mancos B formation is at approximately 3475 feet.

4. 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 Mancos "B" Formation, at an average depth of 3475 feet, without stimulation, is not expected to exceed a maximum allowable production rate of 91 MCF of gas per day

c. Hydrocarbons usually do not exist as liquid in said Mancos "B" Formation reservoir. No well is expected to produce more than five (5) barrels of crude oil per day.

5. 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.

6. The area consists of 95.9% Federal acreage, 4% Fee acreage and .08% State.

6. In view of the above findings, all the criteria required by the Federal Energy Regulatory Commission pursuant to the interim rules in Docket No. RM 79-76 have been met; therefore a recommendation should be made that the Mancos "B" 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 Mancos "B" formation, underlying the following described lands in Garfield and Rio Blanco Counties, Colorado, be designated a "Tight Formation" and incorporated in the list of "Tight Formations" to be established pursuant to Rule 271.706 of the Federal Energy Regulatory Commission.

Rio Blanco County

Township 2 South, Range 103 West, 6th P.M. Sections 19, 30 and 31

Township 2 South, Range 104 West, 6th P.M. Sections 22 thru 27; 34 thru 36

Township 3 South, Range 103 West, 6th P.M. Sections 1 thru 36

Township 3 South, Range 104 West, 6th P.M. Sections 1 thru 3; 10 thru 15; 22 thru 27; 34 thru 36

Township 4 South, Range 101 West, 6th P.M. Sections 25 thru 36

Township 4 South, Range 102 West, 6th P.M. Sections 1 thru 36

Township 4 South, Range 103 West, 6th P.M. Sections 1 thru 36

Township 4 South, Range 104 West, 6th P.M. Sections 1 thru 3; 10 thru 15; 22 thru 27; 34 thru 36

Garfield County

Township 5 South, Range 101 West, 6th P.M. Sections 1 thru 36

Township 5 South, Range 102 West, 6th P.M. Sections 1 thru 36

Township 5 South, Range 103 West, 6th P.M. Sections 1 thru 36

Township 5 South, Range 104 West, 6th P.M. Sections 1 thru 3; 10 thru 15; 22 thru 27; 34 thru 36

Township 6 South, Range 102 West, 6th P.M. Sections 1 thru 12

Township 6 South, Range 103 West, 6th P.M. Sections 1 thru 12

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

Township 6 South, Range 1052 West, 6th P.M. Sections 1 thru 12

Entered this 21st day of July, 1980, as of June, 1980.

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

By Frank J. Piro, Secretary