IN THE MATTER OF DETERMINATION OF THE LOWER MESAVERDE FORMATION (DEFINED AS CONSISTING OF THE ROLLINS, COZZETTE AND CORCORAN SANDSTONE MEMBERS) UNDERLYING CERTAIN LANDS IN MESA COUNTY, COLORADO, AS A "TIGHT FORMATION" PURSUANT TO REGULATIONS OF THE FEDERAL ENERGY REGULATORY COMMISSION Cause No. NG-7 Order No. NG-7-2

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 29, 1982 at 9:00 a.m. in Room 110, State Centennial Building, Denver, Colorado, upon the application of Bow Valley Petroleum, Inc., for an order recommending that certain lands that were excluded from the area of "Tight Formation" designation of the Lower Mesaverde formation (defined as consisting of the Rollins, Cozzette and Corcoran members) by FERC in Docket No. RM 79-76 (Colo-5), Order N o. 148, issued May 28, 1981 be included. Bow Valley, 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 Bow Valley's application.

3. On May 28, 1981, the FERC issued Order No. 148, in Docket No. RM 79-76 (Colorado-5) amending Sec. 271.703 (d) to include the Lower Mesaverde formation (defined as consisting of the Rollins, Cozzette and Corcoran members) underlying certain lands in Mesa County, Colorado, as a "Tight Formation". Thirteen (13) sections, however, consisting of Sections 17, 18, 19 and 30, Township 10 South, Range 95 West, and Sections 12, 13, 23-28 and 33, Township 10 Sou th, Range 96 West, 6th P.M. were excluded from the area.

4. Testimony presented at the hearing indicates that the Lower Mesaverde formation, as defined, underlying lands consisting of the NW1/4 and SE1/4 Section 17, Township 10 South, Range 95 West and the NE1/4 and S1/2 Section 33, Township 10 South, Range 96 West, 6th P.M., meets the guidelines contained in 271.703 (c) (2) as recommended to the FERC by the Commission's (Colorado) Order No. NG-7 and reaffirmed at the hearing.

5. Economic evidence presented at the hearing indicates that the area described in Finding 4 herein cannot be further developed without the incentive price as provided for in 271.703 (a); therefore, it should be included in the area in which the Lower Mesaverde formation, as defined, has been designated a "Tight Formation" by the FERC, Order No. 148, Docket No. RM 79-76 (Colorado-5).

O R D E R

NOW, THEREFORE, IT IS ORDERED, that the Colorado and Gas Conservation Commission recommends that the following described lands in Mesa County, Colorado, be included in the "Tight Formation" designation for the Lower Mesaverde formation (defined as consisting of the Rollins, Cozzette and Corcoran members) as a roved b the FERC, Order No. 148, Docket No. RM 79-75 (Colorado-5), issued May 28, 1981:

Township 10 South, Range 95 West, 6th P.M. Section 17: NW1/4, SE1/4

Township 10 South, Range 96 West, 6th P.M. Section 33: NE1/4 S1/2 ENTERED this 5th day of April 1982, as of February 19, 1982. OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary