REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 21, 1980 at 9:00 a.m. upon the application of Chandler & Associates, Inc., for the designation of the Mancos "B" formation underlying certain lands in Rio Blanco 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, and Chandler & Associates, Inc., having appeared in support of its 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 Chandler & Associates' application.

3. The Mancos "B" Sandstone, also called the Emery and referred to for this purpose as a formation, underlies the area as a blanket sand that is considered to have been deposited in a marine environment in either an offshore bar or a deltaic setting. The formation is located in the lower part of the upper half of the Upper Cretaceous Mancos Shale formation. The formation is comprised of very thinly laminated shales and fine grained silts and sands with much clay filling. Thickness ranges from approximately 350 feet in the southern part of the area and then becomes thinner to the north, and more silty to the east. The average depth to the producing interval is approximately 2500 feet.

4. Engineering testimony presented at the hearing indicates that:

a. The average in-situ gas permeability throughout the pay section averages .0794 millidarcies and is not expected to exceed .1 millidarcy.

b. The stabilized production rate., against atmospheric pressure, of wells completed for production from said Mancos "B" formation at an average depth of 2500 feet, without stimulation, is not expected to exceed a maximum allowable production rate of 79 MCF of gas per day.

c. Hydrocarbons usually do not exist as a 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. 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 Rio Blanco County, 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:

Township 1 South, Range 101 West, 6th P.M. Sections 7, 8, 17, 18, 19, 20, 29, 30, 31, 32 Section 33: W1/2

Township 1 South, Range 102 West, 6th P.M. Sections 11, 12, 13, 14, 15, 22, 23, 24, 25, 26, 27, 34, 35 and 36

Township 2 South, Range 101 West, 6th P.M. Section 4: W1/2 Sections 5, 6, 7, 8: All

Township 2 South, Range 102 West, 6th P.M. Sections 1, 2, 3, 10,9 11, 12, 13, 14 and 15

ENTERED this 15th day of September, 1980, as of July 21, 1980.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary