RECORD OF PROCEEDINGS

Transcription

1 March 20, 2017 The Colorado Oil and Gas Conservation Commission ( COGCC or Commission ) met on March 20, 2017, at The Larimer County Conference Center at The Ranch, First National Bank Building, 5280 Arena Circle Loveland, CO * Monday, March 20, :04am Roll Call of Commissioners: Present: Andrew Spielman Ashley Lowe Ager John Benton Bill Hawkins Tommy Holton Kent Jolley Bob Randall Dr. Larry Wolk Matt Lepore Jake Matter Julie Murphy Chair Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Director Senior Assistant Attorney General Secretary Approval of Past Proceedings: 9:06am Motion: Commissioner Holton moved to approve the Minutes from the January 30, 2017 hearing. Second: Commissioner Benton Yea: All Abstain: None Nay: None Recused: None Result: Unanimously approved. 9:07am DNR Executive Director s Report: 1) Provided an update on Staffing in the Executive Director s Office and other positions in the Department. * Commission proceedings began at 9:04am MDT on March 20, Time stamps provided throughout these minutes reflect the approximate time of day that the agenda item was addressed by the Commission. The audio recording of this Hearing can be found at Page 1 of 25

2 2) Updated the Commission on possible impacts of the proposed federal budget on State programs under DNR. 3) Informed the Commission that the Federal government has revoked the Waters of the U.S. and Stream Protection rules. 4) Updated the Commission on the Department s state legislative initiatives and other pending legislation in the current legislative session. 5) Informed the Commission that there were no substantive updates on the lawsuit against Boulder County concerning its oil and gas moratorium. 6) Informed the Commission that DNR is supporting the opening of two new shooting ranges in Fort Lupton and Palisade. 9:18am Director Lepore s Report: 1) Informed the Commission that, in addition to the staffing updates from Executive Director Randall, COGCC s Senior Assistant Attorney General, Jake Matter, also accepted a new position in the Attorney General s Office and would no longer represent the Commission. 2) Updated the Commission on Staff s progress related the COGCC Rule 318A and operatorship conflicts, including discussing the matter with industry, as directed by the Commission in the January 2017 Hearing. 3) Informed the Commission that Crestone Peak Resources Operating LLC has submitted a comprehensive drilling plan encompassing approximately 7,600 acres in Boulder County; COGCC Staff will work with the operator and local government to develop the plan; Crestone will likely present a formal request to the Commission to enter an order related to the plan at the May 2017 hearing. 4) Provided an update on the recent uptick in drilling permit applications in the last month and that Staff s resources are strained to keep up; reminded the Commission that Staff is currently holding open ten approved positions due to budget constraints. 5) Informed the Commission that there has also been an increase in public input regarding proposed development and that Staff recently attended a public meeting in Broomfield, which was a good public forum for discussion about oil and gas activity. 6) Highlighted three articles in the March Staff Report including the Director s participation in an interstate exchange concerning Idaho s recent promulgation of comprehensive oil and gas rules; Staff s multiple public outreach efforts across the State; and the notice to interested parties included in the Staff Report to address operations subject to orders revoking an operator s ability to conduct oil and gas operations in Colorado. Page 2 of 25

3 9:33am Commissioner Comments: Commissioner Spielman: Thanked Commissioner Pearce, Jake Matter, and Julie Murphy for their service and dedication to the Commission. 9:36am Public Comment: Derek Malmgren, Broomfield resident: requested the COGCC improve the accessibility and availability of data concerning approved and pending applications on the COGCC website. Jeri Shephard, Greeley resident: spoke in opposition to COGCC s approval of Extraction Oil & Gas, LLC s Vetting location near Bella Romero Academy. Linda Kraut, Broomfield resident: spoke in opposition to COGCC approval of oil and gas development near schools and communities and in favor of Rep. Mike Foote s proposed legislation concerning a minimum setback from school property (HB ). Robert Winkler, Greeley resident: expressed concern about oil and gas development in and around Greeley. Sharon Carlisle, Loveland resident: spoke in opposition to COGCC s approval of Extraction Oil & Gas, LLC s Vetting location near Bella Romero Academy. Trish Miller, Bellvue resident: expressed concern about oil and gas development near schools and communities, and especially air quality. Shirley Smithson, Greeley resident: spoke in opposition to COGCC s approval of Extraction Oil & Gas, LLC s Vetting location near Bella Romero Academy. Barbara Flores, Greeley resident: spoke in opposition to COGCC s approval of Extraction Oil & Gas, LLC s Vetting location near Bella Romero Academy. Shawndra Barry, Windsor resident: expressed support for Great Western of Colorado s proposed development on the Raindance Pad as currently contemplated by the operator. Jane Clevenger, Loveland resident: spoke in opposition to COGCC s approval of Extraction Oil & Gas, LLC s Vetting location near Bella Romero Academy. Carl Erickson, Greeley resident: spoke in opposition to COGCC s approval of Extraction Oil & Gas, LLC s Vetting location near Bella Romero Academy and spoke in support of HB Pat Califana, Greeley resident: spoke in opposition to COGCC s approval of Extraction Page 3 of 25

4 Oil & Gas, LLC s Vetting location near Bella Romero Academy. Doug Henderson, Fort Collins resident, representing 350 Northern Colorado: spoke in opposition to COGCC s approval of Extraction Oil & Gas, LLC s Vetting location near Bella Romero Academy, expressed concern about the climate impacts of oil and gas development. Mike Cervi, Greeley resident: surface owner of ranch, expressed support for four of seven wells proposed on his ranch by Bonanza Creek, but requested that the Commission delay consideration of the other three wells to allow Bonanza Creek to discuss development with other operators. Patricia McClelland-Connolly, Denver resident, representing Wall of Women: spoke in opposition to oil and gas development as it threatens children s health and the environment. 10:22am General Consent Agenda: Motion: Commissioner Benton moved to approve all items in Consent Agenda Groups A through P. 1 Second: Commissioner Holton Yea: All Abstain: None Nay: None Recused: None Result: Unanimously approved. Consent Enforcement Matters: Motion: Commissioner Holton moved to approve Enforcement Consent Agenda Group A. 2 Second: Commissioner Benton Yea: All Abstain: None Nay: None Recused: None Result: Unanimously approved. 1 Approved General Consent Orders set forth in Appendix A. 2 Approved Enforcement Consent Orders set forth in Appendix B. Page 4 of 25

5 Commissioner Discussion: Commissioner Jolley: Inquired whether Enforcement Staff expects operators subject to these orders to pay the penalties imposed. Peter Gowen, COGCC Enforcement Supervisor: Staff expects payment of penalties in two of the three cases, but does not expect that Julander Energy (Docket No ) will have the capacity to pay the penalty or comply with other terms in the proposed administrative order by consent ( AOC ) and we are therefore pursuing the distressed operator protocol in this instance. Commissioner Hawkins: Inquired how many other wells are operated by Julander and whether the State will be responsible for closing and cleaning up those wells. Jake Matter, Senior Assistant Attorney General: Julander operates four wells. Commissioner Jolley: Inquired whether all four wells were in the same geographic location. Mr. Gowen: All wells are located in Moffat County; COGCC will become responsible for the closure of these wells and associated locations. Commissioner Benton: Noted that there are four locations associated with those wells. Director Lepore: Staff has worked with Julander for over a year in attempts to allow it to return to compliance, but Julander has demonstrated that it simply does not have any capacity to return to compliance, thus resulting in the proposed order before you. Presentation: 10:45am Report on Adamson 35C-28HZ Loss of Well Control Event (API ) Operator: Kerr McGee Oil & Gas Onshore, LP (Operator No ) Shane Fross, Anadarko / Kerr-McGee Paul Schneider, Anadarko / Kerr-McGee Mr. Fross: Presented about the technical causes of the loss of well control, Kerr- McGee s response, engagement of well control specialists, and subsequent remediation. Commissioner Comments: Commissioner Spielman: Thanked Kerr-McGee for their presentation and transparency. Commissioner Holton: Inquired who the well control specialists were that responded to the incident and why they had to mobilize from Texas and were not local. Page 5 of 25

6 Mr. Fross: Kerr-Mcgee engaged Wild Well Control for this operation. Wild Well Control, based in Houston and was in discussions to open an office in the Denver- Julesburg Basin, but that has not happened. Commissioners Hawkins and Benton: Discussed the technical aspects of the loss of well control and Kerr-McGee s response. Commissioner Randall: Requested further explanation and current status of the surface impacts of the release. Mr. Fross: There was a significant hydrocarbon release impacting the surrounding surface requiring a significant remediation effort, which is still underway. Commissioner Ager: Inquired whether there were any brine or salt impacts to the surface. Mr. Schneider: Soil sampling indicated that all brine impacts were within COGCC standards. Commissioner Benton: Inquired whether Kerr-McGee made all necessary notifications of the release. Mr. Fross: Yes, Kerr-McGee made all necessary notifications. Director Lepore: Thanked Kerr-McGee and Anadarko for their cooperation with the Commission and transparency in this matter. Commissioner Benton: Observed that because of the technical cause of the loss of well control in this instance, otherwise standard safety protocol may not have prevented it. General Hearing Matter: 11:02am Large Units, Few Wells, and Correlative Rights Presentation Staff: Matt Lepore, Director Stuart Ellsworth, Engineering Manager Director Lepore: Presented on the issue of applications for large drilling and spacing units with very few proposed wells; explained that there are currently three pending applications for 1,280 acre units with only one or two two-mile horizontal well permits; shared Staff s concern about the negative impacts of such units may have on correlative rights; noted that in this instance Staff does recommend approval of these applications, relying heavily on the fact that the subject tracts were % leased by the applicants and there were no protests; under different circumstances, Staff may not recommend approval; in the future, Staff will bring these applications to you for your consideration Page 6 of 25

7 and will expect that applicants provide the same amount of supplemental information that was provided in the pending applications. Commissioner Comments: Commissioner Jolley: Inquired whether all owners in this type of unit would be considered held by production. Director Lepore: Yes, they would generally be considered held by production. Director Lepore: Described alternative resolutions available to the Commission when confronted with this type of application. Commissioner Spielman: Inquired whether Staff was seeking input from the Commission. Director Lepore: Input would be welcome, and Staff also wanted to give the Commission advanced notice that issues like this will likely be presented as contested matters before the Commission in the future. Commissioner Jolley: Inquired whether operators are able to get financial gains in SEC filings from this type of unit. Commissioner Benton: Answered that operators may see some financial gain from SEC filings of this type of unit, but not necessarily. Commissioner Benton: Expressed concern about the potential of reducing the overall productivity of the pool by operating units in this manner without coordinating development of all wells in a unit. Commissioners Hawkins, Benton, and Jolley: Discussed possible treatment of units like these, including: staggered release of unproduced acreage from the larger unit; requiring a minimum leasehold interest to apply for units like this, akin to unitization requirements; treatment of the units as an appraisal or exploratory well; and escrowing production payments. Commissioner Holton: Requested that Staff provide updates on this discussion as appropriate. Executive Session: 11:38am Senior Assistant Attorney General Jake Matter: In Executive Session pursuant to the Open Meetings Law, Section (3)(a)(II), CRS, the Commission will receive counsel concerning claims, defenses and scope of issues on appeal in (1) Maralex Page 7 of 25

8 Resources v. COGCC, Colorado Court of Appeals (2017CA000051), and (2) Neighbors Affected by Triple Creek v. COGCC, Denver Dist. Ct. (2016CV34274). Motion: Commissioner Benton moved to enter Executive Session. Second: Commissioner Hawkins Yea: All Abstain: None Nay: None Recused: None Result: Commission entered Executive Session. Motion: Commissioner Benton moved to exit Executive Session. Second: Commissioner Hawkins Yea: All Abstain: None Nay: None Recused: None Result: Commission exited Executive Session. Mr. Matter: During Executive Session, the Commission received legal counsel on the issues on appeal in Maralex Resources v. COGCC, Colorado Court of Appeals (2017CA000051), status of Neighbors Affected by Triple Creek v. COGCC, Denver Dist. Ct. (2016CV34274), which were on the agenda, as well as the proper construction of Rule 508.j., and discussion of the proposed House Bill concerning setbacks of oil and gas operations to schools. No decisions were made. 12:15pm The Commission adjourned. Page 8 of 25

9

10 Appendix A Approved General Consent Orders Group A Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee s request for an order to among other things: Pool all interests in three approximate 960-acre horizontal wellbore spacing units and one approximate 480-acre horizontal wellbore spacing unit, established for the Application Lands, for the development and operation of the Niobrara Formation. Township 3 North, Range 68 West, 6th P.M. Section 34: E½SW¼, W½SE¼ Township 2 North, Range 68 West, 6th P.M. Section 3: W½E½, E½W½ Section 10: W½E½, E½W½ Section 15: E½NW¼, W½NE¼ Wellbore Spacing Unit ( WSU ) Nos acres, more or less, Weld County, Colorado Township 3 North, Range 68 West, 6th P.M. Section 34: W½SE¼ Township 2 North, Range 68 West, 6th P.M. Section 3: W½E½ Section 10: W½E½ Section 15: W½NE¼ WSU No acres, more or less, Weld County, Colorado Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee s request for an order to among other things: Pool all interests in an approximate 280-acre horizontal wellbore spacing unit and one approximate 560-acre horizontal wellbore spacing unit, established for the Application Lands, for the development and operation of the Niobrara Formation. Township 2 North, Range 68 West, 6th P.M. Section 15: SW¼NE¼, W½SE¼ Section 22: W½E½ Wellbore Spacing Unit ( WSU ) No acres, more or less, Weld County, Colorado Township 2 North, Range 68 West, 6th P.M. Section 15: S½NE¼, SE¼ Section 22: E½ WSU No acres, more or less, Weld County, Colorado Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee s request for an order to among other things: Pool all interests in an approximate 480-acre horizontal wellbore spacing unit, for the development and operation of the Niobrara Formation. Township 2 North, Range 68 West, 6th P.M. Section 3: W½W½ Section 10: W½W½ Section 15: W½NW¼ Township 3 North, Range 68 West, 6th P.M. Section 34: W½SW¼ Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee s request for an order to among other things: Pool all interests in two approximate 960-acre horizontal wellbore spacing units, established for the Application Lands, for the development and operation of the Niobrara Formation. Page 10 of 25

11 Township 2 North, Range 68 West, 6th P.M. Section 3: W½ Section 10: W½ Section 15: NW¼ Township 3 North, Range 68 West, 6th P.M. Section 34: SW¼ Wellbore Spacing Unit ( WSU ) Nos. 1 2 Keown State 19N-34HZ Well (API No ) Keown State 19N2-34HZ Well (API No ) Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee s request for an order to among other things: Pool all interests in an approximate 960-acre horizontal wellbore spacing unit, established for the Application Lands, for the development and operation of the Niobrara Formation. Township 2 North, Range 68 West, 6th P.M. Section 3: W½W½ Section 4: E½E½ Section 9: E½E½ Section 10: W½W½ Section 15: W½NW¼ Section 16: E½NE¼ Township 3 North, Range 68 West, 6th P.M. Section 33: E½SE¼ Section 34: W½SW¼ Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee s request for an order to among other things: Pool all interests in one approximate 800-acre horizontal wellbore spacing unit, one approximate 880-acre horizontal wellbore spacing unit, and one approximate 440-acre horizontal wellbore spacing unit, for the development and operation of the Niobrara and Codell Formations. Township 3 North, Range 67 West, 6th P.M. Section 22: E½E½ Section 23: W½W½ Section 26: W½W½ Section 27: E½E½ Section 34: NE¼NE¼ Section 35: NW¼NW¼ Wellbore Spacing Unit ( WSU ) No. 1 and 2 Chica 31C-23HZ Well (Codell Formation) Chica 4N-23HZ Well (Niobrara Formation) Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee s request for an order to among other things: Pool all interests in two approximate 720-acre horizontal wellbore spacing units, for the development and operation of the Niobrara and Codell Formations. Township 3 North, Range 67 West, 6th P.M. Section 22: E½E½ Section 23: W½W½ Section 26: W½W½ Section 27: E½E½ Section 34: NE¼NE¼ Section 35: NW¼NW¼ Wellbore Spacing Unit ( WSU ) No. 1 and 2 Chica 31C-23HZ Well (Codell Formation) Chica 4N-23HZ Well (Niobrara Formation) Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee s request for an order to among other things: Pool all interests in two approximate 800-acre horizontal wellbore spacing units, for the development and operation of the Niobrara Formation. Township 3 North, Range 67 West, 6th P.M. Section 14: S½SW¼ Section 23: W½ Section 26: W½ Section 35: N½NW¼ Wellbore Spacing Unit Page 11 of 25

12 ( WSU ) No. 1 and 2 Chica 35N-14HZ Well (Niobrara Formation) Chica 35N2-14HZ Well (Niobrara Formation) Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee s request for an order to among other things: Pool all interests in an approximate 400-acre horizontal wellbore spacing unit, for the development and operation of the Niobrara Formation. Township 3 North, Range 67 West, 6th P.M. Section 14: SW¼SW¼ Section 23: W½W½ Section 26: W½W½ Section 35: NW¼NW¼ Group B Order No , Docket No , Wattenberg Field, Weld County Approves ConocoPhillips Company s request for an order to among other things: Pool all interests in the Application Lands. Township 4 South, Range 65 West, 6th P.M. Section 28: All Order No , Docket No , Wildcat Field, Arapahoe County Approves ConocoPhillips Company s request for an order to among other things: Subject additional parties to Order No , for the development and operation of the Niobrara Formation. Township 8 North, Range 66 West, 6th P.M. Section 15: All Section 16: All Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Pool all interests in three approximate 560-acre designated horizontal Wellbore Spacing Units on the Application Lands, for the development and operation of the Codell and Niobrara Formations. Township 6 North, Range 67 West, 6th P.M. Section 26: S½NW¼; N½SW¼ Section 27: S½N½; N½S½ Section 28: SE¼NE¼; NE¼SE¼ Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Pool all interests in an approximate 560-acre designated horizontal wellbore spacing unit established, for the development and operation of the Niobrara Formation. Township 6 North, Range 67 West, 6th P.M. Section 23: SE¼SW¼; S½SE¼ Section 24: S½S½ Section 25: N½N½ Section 26: N½NE¼; NE¼NW¼ Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Pool all interests in an approximate 1,120-acre drilling and spacing unit established for the Application Lands by Order Page 12 of 25

13 No , for the development and operation of the Niobrara Formation. Township 6 North, Range 67 West, 6th P.M. Section 25: All Section 26: E½; E½W½ Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Pool all interests in an approximate 1, acre drilling and spacing unit established for the Application Lands, by Order No , for the development and operation of the Niobrara Formation. Township 1 South, Range 67 West, 6th P.M. Section 8: All Section 17: All Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Pool all interests in seven approximate 640-acre designated horizontal wellbore spacing units established for the Application Lands, for the development and operation of the Niobrara and Codell Formations. Township 4 North, Range 67 West, 6th P.M. Section 11: S½ Section 12: S½ Group C Order No , Docket No , Wattenberg Field, Weld County Approves Verdad Oil & Gas Corporation s request for an order to among other things: Establish an approximate 960-acre drilling and spacing unit, and approve up to 16 horizontal wells within the unit for production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations. Township 3 North, Range 62 West, 6th P.M. Section 8: All Section 17: N½ Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee Oil & Gas Onshore LP s request for an order to among other things: Pool all interests in three approximate 880-acre horizontal wellbore spacing units, for the development and operation of the Niobrara and Codell Formations. Township 3 North, Range 67 West, 6th P.M. Section 14: E½SW¼, W½SE¼ Section 23: E½W½, W½E½ Section 26: E½W½, W½E½ Section 35: NE¼NW¼, NW¼NE¼ Wellbore Spacing Unit ( WSU ) No. 1-3 S.S. Minnow 23N-14HZ Well (Niobrara Formation) S.S. Minnow 23C- 14HZ Well (Codell Formation) S.S. Minnow 10N-14HZ Well (Niobrara Formation) Order No , Docket No , Parachute Field, Rio Blanco County Page 13 of 25

14 Approves Ursa Operating Company LLC s request for an order to among other things: Authorize the equivalent of one well per 10 acres well density for the Application Lands, for the production of gas and associated hydrocarbons from the William Fork and Iles Formations (including the Sego Formation). Township 2 South, Range 98 West, 6th P.M. Section 24: All Order No , Docket No , Wattenberg Field, Weld County Approves Synergy Resources Corporation s request for an order to among other things: Pool all interests in two approximate acre horizontal wellbore spacing units, established for the Application Lands, for the development and operation of the Niobrara and Codell Formations. Township 6 North, Range 66 West, 6th P.M. Section 29: S½SW¼, SW¼SE¼ Section 30: S½S½ Section 31: N½N½ Section 32: N½NW¼, NW¼NE¼ Wellbore Spacing Unit ( WSU ) Nos. 1 and 2 Goetzel 34N- 30C-M Well (Niobrara Formation) Goetzel 34C-30-M Well (Codell Formation) Group D Order No , Docket No , Hereford Field, Weld County Approves Fifth Creek Energy Operating Company, LLC s request for an order to among other things: Pool all interests in the Application Lands underlying an approximate 1,280-acre Drilling and Spacing Unit comprising the Application Lands. Township 12 North, Range 63 West, 6th P.M. Section 22: All Section 27: All Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Vacate Order Nos , , , , , , , , , , , , , , , and , which pooled all interests in various wellbore spacing units located within the Application Lands, for the development and operation of the Codell and Niobrara Formations. Township 6 North, Range 67 West, 6th P.M. Section 22: S½S½ Section 23: S½S½ Section 24: S½S½ Section 25: All Section 26: All Section 27: All Section 34: N½N½ Section 35: N½N½ Section 36: N½N½ Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Modify Order No to pool all interests within an approximate 320-acre designated horizontal wellbore spacing unit established for the development and operation of the Codell Formation. Page 14 of 25

15 Township 3 North, Range 68 West, 6th P.M. Section 2: S½S½ Section 11: N½N½ Group E Order No , Docket Nos , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things establish an approximate 640-acre drilling and spacing unit for the Application Lands for the production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations and approve up to ten (10) horizontal wells within the unit. Application Lands: Township 4 North, Range 67 West, 6th P.M. Section 11: N½ Section 12: N½ Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Approving up to twelve (12) wells in order to efficiently and economically recover the oil, gas and associated hydrocarbons from the Codell and Niobrara Formations in an approximate 640-acre drilling and spacing unit established by Order No Township 4 North, Range 67 West, 6th P.M. Section 2: S½ Section 3: S½ Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Allowing up to nineteen (19) wells in order to efficiently and economically recover the oil, gas and associated hydrocarbons from the Codell and Niobrara Formations in an approximate 640-acre drilling and spacing unit established by Order No Township 3 North, Range 68 West, 6th P.M. Section 11: All Order No , Docket No , Wildcat Field, Arapahoe County Approves ConocoPhillips Company s request for an order to among other things: Allow up to six wells in order to efficiently and economically recover the oil, gas and associated hydrocarbons from the Niobrara Formation in an approximate 1,278.1-acre drilling and spacing unit established by a pending Order No for Sections 34 and 35, Township 4 South, Range 65 West, 6th P.M. Township 4 South, Range 65 West, 6th P.M. Section 34: All, less a 1.9- acre tract (containing acres) Section 35: All Group F Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee Oil & Gas Onshore LP s request for an order to among other things: Pool all interests in two approximate 240-acre horizontal wellbore spacing units and five approximate 480-acre horizontal wellbore spacing units established for the Application Lands, Page 15 of 25

16 for the development and operation of the Niobrara and Codell Formations. Township 1 North, Range 67 West, 6th P.M. Section 2: W½ Section 11: N½NW¼ Township 2 North, Range 67 West, 6th P.M. Section 35: S½SW¼ Wellbore Spacing Unit ( WSU ) Nos. 1 thru acres Camenisch 29C-35HZ well (Codell Formation) Camenisch 29N-35HZwell (Niobrara Formation) Camenisch 4N-35HZwell (Niobrara Formation) Township 1 North, Range 67 West, 6th P.M. Section 2: W½W½ Section 3: E½E½ Section 10: NE¼NE¼ Section 11: NW¼NW¼ Township 2 North, Range 67 West, 6th P.M. Section 34: SE¼SE¼ Section 35: SW¼SW¼ WSU No acres Camenisch 30N-35HZ well (Niobrara Formation) Township 1 North, Range 67 West, 6th P.M. Section 2: E½W½, W½E½ Section 11: NE¼NW¼, NW¼NE¼ Township 2 North, Range 67 West, 6th P.M. Section 35: SE¼SW¼, SW¼SE¼ WSU No acres Camenisch 3C-35HZwell (Codell Formation) Township 1 North, Range 67 West, 6th P.M. Section 2: E½W½ Section 11: NE¼NW¼ Township 2 North, Range 67 West, 6th P.M. Section 35: SE¼SW¼ WSU No acres Camenisch 3N-35HZ well (Niobrara Formation) Township 1 North, Range 67 West, 6th P.M. Section 2: W½W½ Section 11: NW¼NW¼ Township 2 North, Range 67 West, 6th P.M. Section 35: SW¼SW¼ WSU No acres Camenisch 4C- 35HZwell (Codell Formation) Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee Oil & Gas Onshore LP s request for an order to among other things: Pool all interests in two approximate 200-acre, two approximate 280-acre, five approximate 400-acre and three approximate 560-acre horizontal wellbore spacing units established for the Application Lands, for the development and operation of the Niobrara Formation. Township 3 North, Range 68 West, 6th P.M. Section 22: N½S½ Section 23: NW¼SW¼ Wellbore Spacing Unit ( WSU ) No acres Hilgers 12N-22HZ well (Niobrara Formation) Township 3 North, Range 68 West, 6th P.M. Section 22: S½ Section 23: W½SW¼ WSU Nos. 2 thru acres Hilgers 33N1-22HZwell (Niobrara Formation) Hilgers 33N2-22HZwell (Niobrara Formation) Township 3 North, Range 68 West, 6th P.M. Section 22: S½N½, N½S½ Section 23: SW¼NW¼, NW¼SW¼ WSU No acres Hilgers 32N-22HZ well (Niobrara Formation) Township 3 North, Range 68 West, 6th P.M. Section 22: S½S½ Section 23: SW¼SW¼ WSU No acres Hilgers 13N-22HZwell (Niobrara Formation) Township 3 North, Range 68 West, 6th P.M. Section 22: S½S½ Section 23: SW¼SW¼ Section 26: NW¼NW¼ Section 27: N½N½ WSU No acres Hilgers 34N-22HZ well (Niobrara Formation) Township 3 North, Range 68 West, 6th P.M. Section 22: S½SE¼ Section 27: E½ Section 34: NE¼ WSU Nos. 7 thru acres Hilgers 17N- 34HZ well (Niobrara Formation) Hilgers 8N2-34HZ well (Niobrara Formation) Hilgers 8N-34HZ well (Niobrara Formation) Township 3 North, Range 68 West, 6th P.M. Section 22: SE¼SE¼ Section 23: S½SW¼, SW¼SE¼ Section 25: NW¼NW¼ Section 26: N½N½ Section 27: Page 16 of 25

17 NE¼NE¼ WSU No acres Hilgers 41N-26HZ well (Niobrara Formation) Township 3 North, Range 68 West, 6th P.M. Section 22: SE¼SE¼ Section 27: E½E½ Section 34: E½NE¼ WSU No acres Hilgers 8N3-34HZ well (Niobrara Formation) Township 3 North, Range 68 West, 6th P.M. Section 22: SW¼SE¼ Section 27: W½E½ Section 34: W½NE¼ WSU No acres Hilgers 7N-34HZ well (Niobrara Formation) Order No , Docket No , Wattenberg Field, Weld County Approves Kerr-McGee Oil & Gas Onshore LP s request for an order to pool all interests within three approximate 240-acre horizontal wellbore spacing units and five approximate 480-acre horizontal wellbore spacing units, established for certain portions of Sections 2, 3, 10, 11, 14 and 15, Township 1 North, Range 67 West, 6 th P.M., for the development and operation of the Niobrara and Codell Formations. Township 1 North, Range 67 West, 6th P.M. Section 2: SW¼SW¼ Section 11: W½W½ Section 14: NW¼NW¼ Wellbore Spacing Unit ( WSU ) Nos. 1 thru acres Burge 13C-11HZ well (Codell Formation) Burge 13NW-11HZwell (Niobrara Formation) Township 1 North, Range 67 West, 6th P.M. Section 2: S½SW¼ Section 11: W½ Section 14: N½NW¼ WSU Nos. 3 thru acres Burge 13N- 11HZwell (Niobrara Formation) Burge 14N-11HZ well (Niobrara Formation) Burge 35C-11HZwell (Codell Formation) Township 1 North, Range 67 West, 6th P.M. Section 2: SW¼SW¼ Section 3: SE¼SE¼ Section 10: E½E½ Section 11: W½W½ Section 14: NW¼NW¼ Section 15: NE¼NE¼ WSU No acres Burge 34N-11HZ well (Niobrara Formation) Township 1 North, Range 67 West, 6th P.M. Section 2: SW¼SE¼, SE¼SW¼ Section 11: W½E½, E½W½ Section 14: NW¼NE¼, NE¼NW¼ WSU No acres Burge 36C-11HZwell (Codell Formation) Township 1 North, Range 67 West, 6th P.M. Section 2: SE¼SW¼ Section 11: E½W½ Section 14: NE¼NW¼ WSU No acres Burge 36N-11HZwell (Niobrara Formation) Group G Order No , Docket No , Wattenberg Field, Weld County Approves Synergy Resources Corporation s request for an order to among other things: Establish an approximate 1, acre drilling and spacing unit for the Application Lands, and approve up to 20 horizontal wells within the proposed unit, for production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations. Township 6 North, Range 66 West, 6th P.M. Section 29: W½ Section 30: All Order No , Docket No , Wattenberg Field, Weld County Approves Synergy Resources Corporation s request for an order to among other things: Pool all interests in an approximate 1, acre drilling and spacing unit, established for the Application Lands, for the development and operation of the Niobrara and Codell Formations. Page 17 of 25

18 Township 6 North, Range 66 West, 6th P.M. Section 29: W½ Section 30: All Order No , Docket No , Wattenberg Field, Weld County Approves Verdad Oil & Gas Corporation s request for an order to among other things: Establish an approximate acre drilling and spacing unit and authorize the drilling of up to sixteen (16) horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara and Codell Formations. Township 1 North, Range 64 West, 6th P.M. Section 18: Lots 1 and 2, E½, E½W½ (a/d/a All) Section 19: Lot 1, NE¼, E½NW¼ (a/d/a N½) Group H Order No , Docket No , Wattenberg Field, Weld & Larimer Counties Approves Great Western Operating Company, LLC s request for an order to among other things: Establishing an approximate 1, acre drilling and spacing unit and approving up to twenty-five (25) horizontal wells in the unit in order to efficiently and economically develop and recover the oil, gas and associated hydrocarbons from of the Codell, Niobrara, Carlile and Greenhorn Formations. Township 6 North, Range 67 West, 6th P.M. Section 19: S½ Section 20: W½SW¼ Section 29: W½NW¼ Section 30: N½ Township 6 North, Range 68 West, 6th P.M. Section 23: SE¼ Section 24: S½ Section 25: N½ Section 26: NE¼ Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Pool all interests in the Application Lands underlying an approximate 1, acre Drilling and Spacing Unit comprising the Application Lands. Township 6 North, Range 67 West, 6th P.M. Section 19: S½ Section 20: W½SW¼ Section 29: W½NW¼ Section 30: N½ Township 6 North, Range 68 West, 6th P.M. Section 23: SE¼ Section 24: S½ Section 25: N½ Section 26: NE¼ Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Establishing an approximate acre drilling and spacing unit, and approving up to ten (10) horizontal wells in the unit in order to efficiently and economically develop and recover the oil, gas and associated hydrocarbons from of the Codell, Niobrara, Carlile and Greenhorn Formations. Township 6 North, Range 67 West, 6th P.M. Section 30: S½ Township 6 North, Range 68 West, 6th P.M. Section 25: S½ Section 26: SE¼ Page 18 of 25

19 Order No , Docket No , Wattenberg Field, Weld & Larimer Counties Approves Great Western Operating Company, LLC s request for an order to among other things: Pool all interests in the Application Lands underlying an approximate acre Drilling and Spacing Unit. Township 6 North, Range 67 West, 6th P.M. Section 30: S½ Weld County, Colorado Township 6 North, Range 68 West, 6th P.M. Section 25: S½ Section 26: SE¼ Larimer County, Colorado Group I Order No , Docket No , Tiffany Unit Field, Archuleta & La Plata Counties Approves BP America Production Company s request for an order to among other things: Approve up to 3 additional horizontal wells in the Tiffany Unit, for the production of oil, gas and associated hydrocarbons from the Fruitland Coal Formation. Township 33 North, Range 6 West, N.M.P.M Section 17: All Section 18: All Section 19: All Section 20: All Section 21: All Section 27: W½ Section 28: All Section 29: All Section 30: All Section 31: All Section 32: All Section 33: All Section 34: All Township 33 North, Range 7 West, N.M.P.M. Section 12: S½ Section 13: All Section 14: E½ Section 24: All Order No , Docket No , Ignacio-Blanco Field, La Plata County Approves BP America Production Company s request for an order to among other things: Reduce the setback on the eastern boundary of Section 28, Township 35 North, Range 6 West, N.M.P.M. to 660 feet. Township 35 North, Range 6 West, N.M.P.M. Section 28 Group J Order No , Docket No , Unnamed Field, Adams & Weld Counties Approves Petro Operating Company LLC s request for an order to among other things: Establish one approximate 960-acre drilling and spacing unit, and approve up to 24 horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Codell and Niobrara Formations. Township 1 South, Range 66 West, 6th P.M. Section 3: All Township 1 North, Range 66 West, 6th P.M. Section 34: S½ Order No , Docket No , Wattenberg Field, Adams & Weld Counties Approves Petro Operating Company LLC s request for an order to among other things: Pool all interests in an approximate 960-acre spacing unit, for the development and operation of the Codell and Niobrara Formations. Township 1 South, Range 66 West, 6th P.M. Section 3: All Township 1 North, Range 66 West, 6th P.M. Section 34: S½ Order No , Docket No , Unnamed Field, Bison County Page 19 of 25

20 Approves Bison Oil & Gas, LLC s request for an order to among other things: Establish one approximate 1280-acre drilling and spacing unit for the Application Lands, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation, and approve up to sixteen horizontal wells within the unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Township 3 South, Range 66 West, 6th P.M. Section 13: All Township 3 South, Range 65 West, 6th P.M. Section 18: All Group K Order No , Docket No , Unnamed Field, Weld County Approves Noble Energy, Inc. s request for an order to among other things: Establishing an approximate 640-acre laydown exploratory drilling and spacing unit, and approve up to one new horizontal well in the unit in order to efficiently and economically develop and operate the Codell and Niobrara Formations. Township 8 North, Range 61 West, 6th P.M. Section 23: S½ Section 24: S½ Order No , Docket No , Wattenberg Field, Weld County Approves Bill Barrett Corporation s request for an order to among other things: Pooling all interests in an approximate 480-acre designated horizontal Wellbore Spacing Unit, for the development of the Will Trust B2B Well (API No ) in the Niobrara Formation. Township 6 North, Range 62 West, 6th P.M. Section 10: S½S½ Section 11: S½SW¼ Section 14: N½NW¼ Section 15: N½N½ Order No , Docket No , Wildcat Field, Arapahoe County Approves ConocoPhillips Company s request for an order to among other things: Pool all interests in the Application Lands underlying an approximate 1,280-acre drilling and spacing unit. Township 4 South, Range 65 West, 6th P.M. Section 19: All Section 20: All Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Pool all interests in the Application Lands underlying an approximate 640-acre Drilling and Spacing Unit. Township 4 North, Range 67 West, 6th P.M. Section 11: N½ Section 12: N½ Group L Order No , Docket No , Unnamed Field, La Plata County Approves WPX Energy Production, LLC s request for an order to among other things: Establish an approximate 1160-acre drilling and spacing Page 20 of 25

21 unit, and approve up to thirteen horizontal wells within the unit, for the production of oil, gas, and associated hydrocarbons from the Mancos Formation. Township 33 North, Range 7 West, N.M. P.M. Section 27: W½ Section 28: E½, NE¼NW¼, S½NW¼, SW¼ Section 29: S½NE¼, SE¼ Group M Order No , Docket No , Ignacio-Blanco Field, Archuleta County Approves Petrox Resources, Inc s request for an order to among other things: Authorize the drilling of an additional two horizontal wells, for a total of three horizontal wells, within the approximate 320-acre drilling and spacing unit established for the Application Lands, for the production of gas and associated hydrocarbons from the Fruitland Coal Seams Formation. Township 33 North, Range 5 West, N.M.P.M. Section 21: S½ Order No , Docket No , Wattenberg Field, Weld County Approves Noble Energy, Inc. s request for an order to among other things: Establish an approximate 2,240-acre drilling and spacing unit for the Application Lands, for production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations. Township 6 North, Range 64 West, 6th P.M. Section 22: E½E½ Section 23: All Section 24: All Township 6 North, Range 63 West, 6th P.M. Section 19: W½NW¼, S½ Section 20: S½ Section 21: W½SW¼ Order No , Docket No , Unnamed Field, Weld County Approves Enerplus Resources (USA) Corporation s request for an order to among other things: Establish an approximate 640-acre drilling and spacing unit, for production of oil, gas and associated hydrocarbons from the Fort Hayes, Carlile, Codell and Niobrara Formations. Township 8 North, Range 67 West, 6th P.M. Section 25: E½ Section 36: E½ Order Nos and , Docket No , Wattenberg Field, Weld County Approves Enerplus Resources (USA) Corporation s request for an order to among other things: Establish an approximate 1,280-acre drilling and spacing unit, for production of oil, gas and associated hydrocarbons from the Fort Hayes, Carlile, Codell and Niobrara Formations. Township 8 North, Range 67 West, 6th P.M. Section 33: All Township 7 North, Range 67 West, 6th P.M. Section 4: All Order Nos and , Docket No , Wattenberg Field, Weld County Approves Enerplus Resources (USA) Corporation s request for an order to among other things: Establish an approximate 1,280-acre drilling and spacing unit for the Application Lands, for production of oil, gas and Page 21 of 25

22 associated hydrocarbons from the Fort Hayes, Carlile, Codell and Niobrara Formations. Township 8 North, Range 67 West, 6th P.M. Section 35: All Township 7 North, Range 67 West, 6th P.M. Section 2: All Order No , Docket No , Unnamed Field, Weld County Approves Enerplus Resources (USA) Corporation s request for an order to among other things: Establish an approximate 1,280-acre drilling and spacing unit, for production of oil, gas and associated hydrocarbons from the Fort Hayes, Carlile, Codell and Niobrara Formations. Township 8 North, Range 67 West, 6th P.M. Section 23: All Section 26: All Group N Order No , Docket No , Wattenberg Field, Weld County Approves Ward Petroleum Corporation s request for an order to among other things: Establish an approximate 640-acre drilling and spacing unit for the E½ of Section 2 and Section 11, Township 1 South, Range 68 West, 6th P.M., and approve up to 12 horizontal wells within the unit, for production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations. Township 1 South, Range 68 West, 6th P.M. Section 2: E½ Section 11: E½ Order No , Docket No , Wattenberg Field, Adams County Approves Ward Petroleum Corporation s request for an order to among other things: Establish an approximate 640-acre drilling and spacing unit for Section 30 and Section 31, Township 1 South, Range 66 West, 6th P.M., and approve up to 12 horizontal wells within the unit, for production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations. Township 1 South, Range 66 West, 6th P.M. Section 30: E½ Section 31: E½ Order No , Docket No , Wattenberg Field, Adams County Approves Ward Petroleum Corporation s request for an order to among other things: Establish an approximate 960-acre drilling and spacing unit, and approve up to 12 horizontal wells within the unit, for production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations. Township 1 South, Range 67 West, 6th P.M. Section 22: S½ Section 27: All Section 34: N½ Order No , Docket No , Wattenberg Field, Adams County Page 22 of 25

23 Approves Ward Petroleum Corporation s request for an order to among other things: Establish an approximate 1280-acre drilling and spacing unit, and approve up to 23 horizontal wells within the unit, for production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations. Township 1 South, Range 67 West, 6th P.M. Section 13: All Section 24: All Group O Order Nos , , Docket Nos , , Unnamed Field, Weld County Approves Noble Energy, Inc. s request for an order to among other things establish two approximate 1,280 acre drilling and spacing unit, and allow up to (2) horizontal wells within each unit to efficiently and economically develop and recover the oil, gas and associated hydrocarbons from the Codell and Niobrara Formations in the unit. Application Lands: Township 8 North, Range 61 West, 6th P.M. Section 9: All Section 10: All Township 9 North, Range 61 West, 6th P.M. Section 24: All Section 25: All Order No , Docket No , Unnamed Field, Adams County Application Lands: Approves ConocoPhillips Company s request for an order to among other things to establish an approximate 1280-acre drilling and spacing unit and allow up to one horizontal well in the unit in order to efficiently and economically develop and recover the oil, gas and associated hydrocarbons from of the Niobrara Formation in the unit. Township 3 South, Range 65 West, 6th P.M. Section 36: All Township 3 South, Range 64 West, 6th P.M. Section 31: All Group P Order No (amended), Docket No , Hereford Field, Weld County Approves Fifth Creek Energy Operating Company, LLC s request for orders to among other things establish an approximate 1280-acre drilling and spacing units, and approve up to eight new horizontal wells within the units, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation. Application Lands: Township 12 North, Range 62 West, 6th P.M. Section 19: All (All portions of this section within the State of Colorado) Section 30: All Order No , Docket No , Wattenberg Field, Weld County Approves Great Western Operating Company, LLC s request for an order to among other things: Pool all interests in an approximate 560-acre designated horizontal wellbore spacing unit established for the Application Lands, for the development and operation of the Niobrara Formation. Page 23 of 25

24 Township 6 North, Range 67 West, 6th P.M. Section 21: SE¼SE¼ Section 22: S½S½ Section 23: S½SW¼ Section 26: N½NW¼ Section 27: N½N½ Section 28: NE¼NE¼ Page 24 of 25

25 Appendix B Approved Enforcement Consent Orders Enforcement Group A Docket No , Merrion Oil & Gas Corporation (Operator No ) Staff: Jeremy Ferrin, Enforcement Officer David Beckstrom, Enforcement Officer Approves an AOC with Merrion Oil & Gas Corporation ( Merrion ) imposing a penalty of $42,840 for a one-day violation of Rule 912.a. (Venting or Flaring Natural Gas Prohibited) and one 61-day violation of Rule 912.b. (Venting or Flaring Natural Gas Prior Approval Required). Of the total penalty, $21,420 will be a mandatory penalty and the remaining $21,420 will be suspended pending Merrion s statewide compliance with Rules 309 (Operator s Monthly Reports of Operations), 912.a., 912.b., and 805.b.(3) (Odors and Dust Well Completions) for a period of two years. Docket No , Alfred Ward & Son (Operator No ) Staff: Britta Beckstead, Assistant Attorney General Peter Gowen, Enforcement Supervisor Approves an AOC with Ward & Son imposing a $98,054 penalty, of which $49,027 is suspended pending the completion of corrective actions, for violations of Rule 309 (Form 7, Operator s Monthly Report of Operations), Rule 326.b. (Mechanical Integrity Test, Shut-in Wells), and Rule 326.c.(1) (Mechanical Integrity Test, Temporarily Abandoned Wells) at the Michaels 2 Well (API No ) in Logan County and the Blomenkamp 1 Well (API No ) in Washington County, Colorado. Docket No , Julander Energy (Operator No ) Staff: Britta Beckstead, Assistant Attorney General Peter Gowen, Enforcement Supervisor Approves an AOC with Julander Energy imposing a $118,700 penalty for violations of Rule 522.f. (Failure to Comply with Commission Order) and Section (1), C.R.S. (Violation of an Order) of the Oil & Gas Conservation Act at Coffeepot Springs Well (API No ) and the Yellow Cat 32-4 Well (API No ) in Moffat County, Colorado. Page 25 of 25