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Presented by: Michael J. Wozniak 216 St., Suite 1100 Denver, CO 80202 (303) 407-4499

DENVER ASSOCIATION OF PETROLEUM LANDMEN LAND PRESENTATIONS BEFORE OIL & GAS CONSERVATION COMMISSIONS February 15, 2006. Presented by: Michael J. Wozniak 216 St., Suite 1100 Denver, CO 80202 (303) 407-4499. BEATTY & WOZNIAK, P.C. I. Introduction. Oil & Gas Commissions are busier and busier

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Presented by: Michael J. Wozniak 216 St., Suite 1100 Denver, CO 80202 (303) 407-4499

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  1. DENVER ASSOCIATION OF PETROLEUM LANDMENLAND PRESENTATIONS BEFORE OIL & GAS CONSERVATION COMMISSIONSFebruary 15, 2006 Presented by: Michael J. Wozniak 216 St., Suite 1100 Denver, CO 80202 (303) 407-4499 BEATTY & WOZNIAK, P.C.

  2. I. Introduction • Oil & Gas Commissions are busier and busier • 2005 - Wyoming Permits – 9,617 APDs approved - Colorado Permits – 4,363 APDs approved 208 recompletion permits approved - Colorado Dockets – 60 actual hearings 258 violations (NAOVs, AOCs, OFVs) - Wyoming Dockets – 748 dockets filed • Land testimony required in virtually every case • Focus on Colorado and Wyoming

  3. II. Types of Typical Hearings A - Exception Locations 1) Rule 318c. (COGCC Rules & Regulations) 2) Chapter 3, Section 3 (WOGCC Rules & Regulations) B - Establish Drilling and Spacing Units Not smaller than area that can be efficiently (and economically in Colorado) drained by one well - § 34-60-116 C.R.S.; § 30-5-109(b) W.S.A. C - Add lands to Existing Spacing Units D - Increase Well Density in Existing Spacing E - Modify Existing Spacing Units F - Exploratory Drilling Units § 34-60-116(2), C.R.S.

  4. G - Secondary Recovery/Waterflood Units/State Unitization 1) § 35-10-110 et seq. W.S.A. and Chapter 4, Section 7 (WOGCC Rules & Regulations) 2) § 34-60-118 C.R.S. H - Commingling Application 1) Chapter 3, Section 35 (WOGCC Rules & Regulations) 2) Rule 322 (COGCC Rules & Regulations) I - Horizontal Wells 1) Chapter 3, Section 2(v), Chapter 3, Section 25 (WOGCC Rules & Regulations) 2) Rule 321 (COGCC Rules & Regulations) J - Compulsory Pooling/Force Pooling 1) § 34-60-116(7)(a) C.R.S.; Rule 530 (COGCC Rules & Regulations) 2) § 30-5-109(f)(g) W.S.A.

  5. K - Others 1) Well setbacks/variances - Rule 603 setbacks; high density applications; Rule 502b variances (COGCC Rules & Regulations) - Chapter 3, Section 2 (WOGCC Rules & Regulations) 2) Bond determinations 3) Correlative rights violations 4) Disposal well permits - Rule 325 (COGCC Rules & Regulations) - Chapter 4, Section 5 (WOGCC Rules & Regulations) 5) Payment of proceeds disputes - § 34-60-118.5 C.R.S. 6) Gas storage - § 34-60-106(17)(a) – (i) 7) Local Public forums – Rule 508 (COGCC Rules & Regulations) 8) Violation hearings - § 34-60-121 C.R.S. - § 30-5-119 W.S.A.

  6. L - Rulemaking Rule 529 (COGCC Rules & Regulations) M - Each type of Application is based on statutory authority and Rule and Regulation provisions 1) See generally, § 34-60-101 et seq. C.R.S.; § 30-5- 101 et seq. W.S.A. 2) Check Commission websites 3) Must prevent waste; protect correlative rights

  7. III. Land Testimony A - Overview 1) Qualifications/resume - Required in Colorado 2) Describe Application – Summarize request of Company 3) Describe existing spacing 4) Describe existing Orders affecting application area 5) Confirm meet definition of “Owner” 6) Confirm proper notice given 7) Confirm protest/inquiry situation 8) Power Point; new tools B - Present Land Exhibits 1) Vary with nature of Application 2) Title Block – Applicant name, scale, exhibit number, case & docket, type, county, field; not “stamped” as opposed to geology/engineering exhibits

  8. Examples A - Regional Map – state lines, cities, highways, rivers, etc. B - Location Map 1. Affected lands/proposed location 2. Drilling Window(s) 3. Dimensions of well location outside the window (if exception location) 4. Distance between proposed well and other wells 5. Producing formations identified 6. Cross-sections delineated 7. Seismic shot lines/seismic data delineated 8. Outline of spaced area(s) and field name and proposed spacing units

  9. C - Application Land Map(s) 1. Mineral ownership 2. Leasehold ownership 3. Surface ownership 4. Outline affected lands 5. Proposed location(s) with distances to lease lines 6. Drilling window(s) 7. Distance of proposed location from offsetting spacing units 8. Outline of spaced area(s) and field name D - Topographic Map 1. Affected lands/proposed location 2. Drilling window 3. Access road(s) 4. Man-made features E - Health, Safety, Welfare & Environment Exhibits -- Colorado only -- § 34-60-102 C.R.S.

  10. IV. Testifying A - Consider written testimony as exhibit B - Examiner/administrative hearings vs. full Commission hearings C - Oral testimony - under oath 1) Don’t read 2) Stay within yourself 3) Confidence 4) Know your audience 5) Address weak points 6) Importance of preparation - Cross examination tips 7) Commissioner questions 8) Defer to geologist/engineer 9) Know applicable regulations/statutes 10) Make record for appeal

  11. V. Conclusion A - Land testimony required to establish elements of proof B - Land testimony rarely “wins” the hearing – but can easily lose it

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